All Forum Posts by: Ronan Donnelly

@Michael Daharsh, I am somewhat in agreement with Paul in that there are significant benefits to investing with a range of syndicators. I think that this is the optimal route in terms of return on time invested and risk reduction via diversification.

I do think however that if you are willing to dedicate yourself 100% to being the sponsor then you will make more money, at the expense of time and with more concentrated risk.

In summary, being the sponsor is the best option for the few and being a LP investor is likely the best outcome for the many.

For full disclosure I run a company that helps LP investors find the best sponsors in a given asset class or geography.

@Dave Meyer, how about creating an incentive for the people who have the specific data to share it with you, the aggregator?

For example, if you can define the data points that you want to capture (location, age, property type, etc.) and ask BP members to share that then you could aggregate it and create value by offering the aggregate data, via a subscription to other interested parties. You could then share the proceeds with the contributors.

So many opportunities to make the real estate investment lifecycle more efficient! Good luck, interesting problem.

Hi @Santiago Coppoletta, I would recommend investing the time to go and visit the area that you plan to invest in. Here’s why:

1) Risk Reduction - for a typically small cost in terms of time and money you can gain a ton of context about an area and the surrounding areas that will help you to reduce the risk of getting into a poor investment

2) Relationships - you can leverage your time there to meet with local market participants like property managers, brokers, other investors, contractors, potential tenants etc.

3) Business expenses - you should be able to deduct the cost of the trip as a business expense

4) Context / Perspective - you simply get better context and perspective by being there is person

I don’t mean to say that you can’t do OK by investing remotely but I am 100% certain that you will get outsized benefits from visiting your assets periodically and definitely initially.

When I invest in multifamily deals I always visit the area, the comps and the asset itself, this takes time but because we buy 100’s of units at a time it is an efficient use of time.

I’d also be wary of anyone who isn’t personally invested in a deal alongside you telling you that you don’t need to visit, particularly if they get compensated by you making a transaction.

Investing out of state allows us to find the best returns but don’t be mistaken into thinking that you shouldn’t plan on spending time in your target market. Good luck!

Hi @Andrew Jones, the great thing about having capital is that it gives you a lot more choice in terms of what real estate investment strategy you wish to pursue. That said, I would recommend mapping out what the various strategies look like in terms of time, experience, skills and capital required. Overlay that with what your objectives are and once you find the best fit you are already off to a head start because you have enough capital. For example if you are inexperienced, don't have much time but have capital I would recommend avoiding ground up development for example. Good luck!

@Account Closed, real estate has got very low barriers to entry which is one of the things that I like most about it. In order to succeed however you will need to invest significant time to educate yourself and if you want to be the best you will need to hold yourself to a very high standard.

Hi @Nick Gray, congrats on creating so much equity as a result of your rehab, this is one of the things that I love about value-add strategies. It would be helpful to define what your plans are for the building e.g. if you plan to sell/refinance soon you may not want to take the NOI impact as a result of implementing electric (or mini-split systems which I have also heard good things about). If you plan to hold long term, for cashflow then it might more sense to do the more expensive, but longer term better option.

Let the numbers guide you. Good luck!

@Aaron Wells, house hacking can be a great strategy to build long term wealth. I would suggest educating yourself on how to be a professional landlord and property manager. Setting things up the right way, from the beginning, will save you a lot of headaches down the road. Good luck!

@Charles Hunnewell, with a bigger concentration of 1-bedroom and studios you may want to underwrite with more frequent turnover higher turnover costs. Good luck!

@Joseph Cornwell, getting deals is certainly a constraint these days. The simple answer is that in a tough market to find deals you need to look at more deals in order to get one. Another angle is to recognize that real estate does follow a cycle and perhaps you might direct your free cashflow to paying down debt or building up reserves rather than chasing prices. Good luck!

@Nathan Gesner, create a win-win for yourself by raising the rent, if he pays you win and if he doesn’t you get to renovate a severely neglected unit and get market rent.