All Forum Posts by: Ronan Donnelly

Hi @Allan Ringler, congratulations on starting down the path of investing in multi-family. You will find people on BP who have been very successful in every niche of real estate investing and within every strategy within the different niches. What I would suggest is to spend a disproportionate time on what your ultimate goals are and that way you can work backwards to see which strategy gets you there fastest.

One unique aspect of multi family is that the assets are substantially valued off the Net Operating Income so in order to see appreciation you should have an achievable plan for increasing income and decreasing expenses. With more expensive/lower cap rate properties you can get greater capital appreciation for each incremental dollar of NOI.

For lower cost/higher cap rate properties you will need to focus more on acquiring and retaining high quality tenants and you will likely need to spend more in ongoing repairs.

I think that if you really dig into the details (I.e. underwrite) a decent number of different classes of properties you will get a bit of clarity on what strategy is best for you.

All the best,

Ronan

@Robert Stack I agree with others on this thread, find yourself a professional property manager if doing it yourself just isn't what you excel at. Good luck!

@Karl Kauper, I love an expression that 'The Real Estate Guys' use, "Live where you want to live, but invest where the numbers make sense". There is a ton of valuable content on BP that can help you identify a market, analyze that market for key economic indicators e.g. employment growth, wage growth, population growth etc., build a team of partners and start finding deals remotely. Dave Green is one person that springs to mind. Good luck

Hi Bobby, it really depends on how much you bring to the partnership and how much of a need there is for that contribution whether capital or other. Feel free to DM me and I can share my own personal experience.

@Ryan Webster - initially people will be investing with you because they know, and trust, you. So don't sweat the name of your company and focus on how to maximize the value of your own credibility and reach. Good luck!

@Jonathan Trimboli - invest small amounts across a range of sponsors, asset classes and geographies. Keep some powder dry to take advantage of deals when the market turns and to double down on the sponsors that perform on your initial investments.

@Andrey Y.you have already been given some good names and you can get others through BP as well as sites like www.crowddd.com.

If you hav enough capital to deploy you may want to consider partnering with some smaller sponsors on more favorable terms (co-gp) than you can get with the larger, more established syndicators.

@Kristen Ray, there are a couple of red flags here:

1) Due diligence is such a key part of the success of any deal that it just doesn’t make sense to outsource any part of it to someone who is paying for the privilege. The only way you would pay for the privilege is if you were looking to gain experience and who would want someone inexperienced doing due diligence for them

2) In order to stay within SEC regulations when raising capital you typically need to be part of the general partnership so I would recommend checking with a SEC lawyer to ensure that your friend isn’t in breach of any SEC reg’s When raising capital for someone else.

@Lee Ancona - Check out https://www.enodoinc.com/marke... I have used this to generate benchmark expenses in target markets. It’s hard to tell how good the quality of the data is without being active in a market for some time but it should at least flag any major discrepancies in your underwriting. Ronan

Hi @Carter Thomas, some good options there. So long as properties are cash flowing my preference is always to get cash out via a refinance to avoid the significant transaction fees of selling real estate. That way you can also continue to enjoy any appreciation on the asset and the cash that you get is tax free. 

As for what to do with the cash it really depends on your preferences. Buying more assets locally means that you will likely be more involved in managing them. Investing out of state allows you to select markets with the best fundamentals for real estate investing but you have to get good at vetting and managing a remote team. 

Good luck, all of your options are good ones!

Ronan