All Forum Posts by: Ryan Lauretta

Here's my highly simplified newbie math on SFRs on a hypothetical $100K investment for 4 SFRs. this includes some optimistic assumptions, probably a year to ramp up and I gather dozens if not hundreds of hours of work. RoE is about 75% for 5 years. A good syndicate would do much better and I don't have to take out loans for over $250K. Unless I do some sort of catalyzing strategy e.g. BRRRR, I don't see how these numbers get any better. Any other catalyzing strategy I'm missing here, or something with the cash flow and ROE is off?

If not, I am probably going to with @Ian Ippolito's strategy and that's to learn to vet great syndicators and grow from there.  

@Ian Ippolito - extremely helpful, just fantastic, thx!

Your thoughts on this one.  A U.S. based fund that buys off shares from syndicate holders from individuals or institutions who are looking to liquidate prior to the maturity of the investment.  There has to be a certain % of people who are looking to cash out early for many reasons.  Since these sellers need the cash immediately, the fund gets the assets at significant discounts.  In addition, they are considerably lowering the risk since they are buying the shares after the asset has been stabilized. The fund mostly focuses on large commercial projects.   They've shown +-15% returns, from this between 4-5% are coupons.  Hold time is at least 3 years, min investment $100K.  They make their killer returns by buying mature, cash generating assets at a discount, thus solving the liquidity issues that many of us fear when investing in these.   Thoughts?

@Andy Mirza, thanks for your message, I am unfamiliar with that asset.  Can you provide more details?  

@Taylor L., I am looking to place $25K in each investment, whether a syndicate or SFR. In the case of an SFR, it would be 75% lever, and I would like to be between 8-10% CoC.

@Ian Ippolito, @Whitney Hutten, Thx for offering link to connect, I'll PM you

As far as DD on syndicates, obvious things that come to mind are track record, debt/equity relationship, interest rates, location, asset class and type, management experience, current holdings, comparables, coupon vs appreciation, asset trend (for example over development in student housing), value-add vs. construction.  Anyone has a formula that's useful to efficiently evaluate these?

Since opening this thread, I actually already invested in one value add multifamily in B/C class that invests in multiple properties.   The decision has very much to do with the advice provided here.  My next investment will likely be another $25K in commercial, I have a couple of targets.  The idea here is to diversify the risk with management, asset type and number of assets.  The less I know, and I know that I don't know, the more I need to diversify.   That said there are some fantastic teams out there offering $100K min in one asset and they have just phenomenal track record.   The objective financial mind say diversify, but the subjective says go with the great track record.  For now, going with objective.  

On BRRRR, the math shows that these are the fastest way to build wealth. I have not figured out how to walk down the learning curve on those living abroad and working in tech.
  

You all are awesome - your advice is invaluable.  Thx

This is all fantastic advice and I thank you all for it. My job is demanding and while I am drawn very much to SFRs, I am experienced enough to wonder if I can really manage the time to make educated decisions, or am I just depending on luck. Turnkey properties will rarely deliver better returns than a good syndicate and there are plenty to choose from. BRRRR is just not practical given long distance and no experience. The forums here are full of experience investors who say the market is inflated and good deals are hard to find.

My heart is telling me to do one SFR to learn this thing - but the logic is just blocking me. If I don't start now the learning process, when will be the right time?

There's a difference between investment (syndications) and building a business (SFR). At the end my goal is monthly cash flow to reduce the load of work I have now. Just want to start to step away from the rat race.

I an American living abroad looking to invest into real estate. My original plan is to invest 50% in a mix of syndicates - value add B/C class midwest, some commercial and 50% on SFR. When I looked at the track records of certain syndicates that offer a mix of assets and thus diversify your risk, I find CoC that range between 7-9%, and overall 5 year IRR of 15-18% after appreciation. Liquidity is an issue, but that's real estate. There is also no time commitment on my side with all on those. On the other side, I see SFRs which I would love to invest in - but the math just isn't working out for me from a risk/benefit perspective when comparing with sydndicates. To stabilize an SFR to generate those kinds of returns, there is a ton of work, learning curve, luck in everything from choosing a neighborhood, house, team - you all know better than me. The long distance part is doable, but its just another variable. While my heart is still pulling to do at least one SFR just to learn the business (only way is to get your hands dirty at some point), my mind keeps stopping me because of the numbers. But people are building wealth with SFRs, not investing in syndicates - what am I missing here?

I am in tech - and have a family with young kids.  Time is limited.  Right now, I get up at 5 -do two hours of research, and then try to find some time during the night.  Discipline and motivation are not issues for me, I just want to make I am not wasting my time, working hard with a small chance of achieving returns had I just gave someone else the cash to invest.  

I am at an intersection, would love people's advice here.  

My own two cents from the world of tech entrepreneurship, the fact hat you have demand may stem out of your ability to sell, not necessarily from a great product.  I've seen ultra demand for tech assets that are crap because the entrepreneurs just knew how to sell and vice versa.  This means that there can be some gems on the open market places, and hopefully I just found one.  Much appreciate the advice though.  

On that note, anyone experienced with remote BRRRR projects (I have David's book on order)?

@Alora Glaze, thank you for the detailed response.  I will check out the area and will contact your firm.  Trick is to find a local team that I can trust - if I do, the sky is the limit.