All Forum Posts by: Robert Frazier

THere is a reason the IRS lets you depreciate the value of a home over the 27.5 year time frame. Over that time you would need to spend at least the same amount as the purchase price to keep it in a new-condition. So over the course of 100 years it would need to be updated including all systems 4 times. If it has less than 50 year old electrical, 70 yr old plumbing, 20 yr old HVAC and the finishes are being replaced every 25 years, you could be stepping into a gem….but that is rare. Know the age of the systems and expect to spend the purchase price in updates over 27.5 years of ownership.

There was an article in the WaPo about this earlier this year. They are legit programs but it is rare that the renter will ever purchase. It’s a great way to get a rental of a home that you want if you’re willing to pay market rate. The fund land-banks the purchase and either rents or sells again. During a market of increasing value it is a good play.

If you go that route and ask him to replace it, he will never work with you again. 

Make sure he warranties his work. That is the biggest factor. If it fails in a year, it was poorly installed.

We are finishing up a $4M multi-family redevelopment that we financed with a syndicated group of friends and debt….but the next step is developing a larger pool of investors for our next project. How are you connecting with qualified investors and marketing projects to them?

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $525,000
Cash invested: $700,000

Redeveloped Aging office building and drive through into 17 units of apartments and townhomes. Expect to complete August 2022

How did you find this deal and how did you negotiate it?

Found a soft moment and a broke down property, bought for $10% below asking.

How did you finance this deal?

Syndicate and Hard Money

How did you add value to the deal?

Redevelopment, $3.2M construction

Friends and mentors who help connect with the right people. I have used 25+ connections in my first deal, redeveloping an old office building into a 17 unit multi-family. I leaned on contacts in CRE, our team leader in residential, construction, architecture, tax planning and more. The network has grown me more than anything.

I guess the benefits is in the management piece. There is a central ledger, they prepare tax filings, there is a secondary market for tokens. It is the same rules but you can offer smaller chunks (under $1000). It's a value for us to engage retail investors in development and create asset to this class of investment. We're looking at raising 5-10m for the next fund, this gives us some flexibility on how to structure it (multi-state filings etc).

So much absurdity. Friend told me that he lost the ferret when he opened the door to a rental. Spent all day looking for it in the neighborhood.

Create a relationship with a local lender or Realtor and ask them what they are seeing in their transactions. This might help you get some deals to see as you look.

This is exciting. lots of options out there. If you're looking for truly passive income you're going to want some combination of buy and hold with professionally managed properties, investment funds or partnership/syndication deals.  My first investment was a redevelopment of an old office building with a syndication into a 17 unit apartment building. We are working on deals 2 & 3 and love to partner with our friends, family and qualified investors.  If you want to hear more, would love to grab a conversation and share what we've been learning.