All Forum Posts by: Ronan Donnelly

@Chandler Harker, research markets and pick the one that has the best fundamentals (population growth, employment growth and wage growth), search on BP for multifamily value-add syndicators that are active in that market and then move on to due diligence on the sponsor, deal, management team etc. Good luck!

Hi @Erica Pelfrey, congratulations, it sounds like you are off to a good start. As an entrepreneur it is your job to take on risk in order to generate returns. You have clearly highlighted that you are aware of the risks that you are taking and this is more than half the battle, the easier part is to define the actions required to mitigate or manage the risks. Here is a high level breakdown of two of the risks that you are carrying

1) Liquidity - you are only as liquid as the reserves that you are carrying (which includes whatever is left in your heloc) so make sure that you have enough to cover unforeseen scenarios, personal and business

2) Business Risk - as an owner of real estate some of the main risks that you carry are vacancies or non-paying tenants, lower than expected rents (negative cashflow), unforeseen expenses (repairs and maintenance)

I would argue that both of these are higher when you are operating at a smaller scale e.g. if you had a fire at your triplex then 60% of your portfolio would be non-performing. Continuing to scale will make you better at what you do, generate more cashflow, diversify your risk away from any one particular asset and repetition is the path to mastery.

Don't forget that it is possible to scale with other people's money so get out there and broadcast what you are doing since you may find that there are people in your network who would love to invest. Good luck!

@Nick Troutman, I started with SFH's provided via a turnkey provider. Turnkey providers add value by packaging up all of the things you need in order to start building an real estate portfolio (the asset, financing, insurance, the team, management, etc.) and for that you pay a fee. This all makes sense, provided you like the options on offer.

I ultimately transitioned out of turkey’s since they were increasingly less passive as I scaled, each house you buy carries an admin overhead (applying for financing, getting insurance, filing taxes etc.). I ultimately started investing in multifamily syndications as they offer all the benefits of physical real estate ownership (depreciation, LT cap gains, leverage) but are entirely passive and the team managing the deal have incentives more aligned with yours (they only get paid after they meet performance hurdles and they typically co-invest in the deals)

Multifamily syndications aren’t the only way to invest passively so educate yourself on all the options available and pick the one that works best for you. Good luck!

@Amanda Sweet, welcome to BP. Bringing old places back to life is one of the most satisfying elements of the job for me :)

Hi @Robert Palladino, congrats on recognizing the power of real estate. From my perspective it looks like you have got a very good opportunity with the new build on your existing lot. The fact that you can rezone a lot that you already live on to create $1,600 per month cashflow for an outlay of $100k-$125k seems like a great return, never mind the equity that you will have created.

To be honest I don't think that you should overthink this, you have a great, low risk opportunity in front of you and once you complete that project you will find that you will be able to move much faster on subsequent opportunities. If you are working with successful clients you could also ask them to let you know about future projects where you could invest or lend your services.

As for the new construction planned, it has pro's and con's. On the pro side there is obviously demand and bringing more people to an area will support other attractive businesses like restaurants etc. On the con side it's a lot of additional supply which you will need to compete with. Given your background I am sure that you can create a more interesting and desirable space to live in that a cookie-cutter 1,100 apartment complex and your dedicated parking space will be a huge plus. Good luck, it's all about taking action.

@Sheri Prather, investing long distance gives you the flexibility of picking the markets with the best economic conditions and income/appreciation potential. You can succeed by investing locally or long distance but you must tailor your approach.

Key to long distance investing is to build a team that will support you (agents, property managers, contractors, lawyers etc.) and in order to have a successful team you will need to be very clear about what you need from them. For long distance expectation setting, communication and accountability are all critical to success. Unless you build these skills, teams and systems you will be unable to scale regardless of whether you invest locally or long distance.

You can also check out the book on Long Distance Investing by @David Greene. Good luck!

Rentometer will give you a good indication. I would also suggest calling the sales comps to no only get details of what their rents are but also to build a list of amenities to help you adjust the comp rent to the asset you are looking at.

Hi @Pascal Guirand, the economics that make the areas that I mentioned better for investing (population growth, jobs growth, wage growth) are favorable for single or multi family. I prefer multi-family for economies of scale and demographic changes that favor living in apartments over single family homes. Good luck

Hi @Pascal Guirand, if you are going to go out of state then it may be worth looking further South. There are a ton of great options for investing in the Carolinas, Florida, Texas, Phoenix etc. Good luck!

@Andrew Frishman - here is some food for thought to get you started: https://www.biggerpockets.com/member-blogs/11782/84402-how-to-evaluate-a-sponsor Feel free to DM me with any specific questions, I have invested in multiple deals as a LP and as a GP. Good luck!