All Forum Posts by: Salem VanderStel

Hi Gavin,

I'd recommend narrowing to a specific market and syndication type.  Deals above 100 units and below 1000 units will typically have the highest returns and most stability, but they also require a dedicated and experienced operating team.  

In the current market, the cost-basis for Value-Add properties are low and these offer a great low risk opportunity.  As the market evolves, however, I suspect that more operations-heavy syndications such as Assisted Living Facilities and Urban In-fill projects will be the next market to produce demonstrated, stable, high returns.

Best,

Salem

@Heather Lanser

Hi Heather, not a bad position to be in!

With the current market conditions, I would advise against taking on an additional SFH or a small multifamily property. The cash income will be too small relative to your investment and you will be ask risk of a downturn devaluing your total investment. As an example, if you bought another SFH at the numbers you described as market - $300k, $1300 rent. That would require a 25% down payment plus closing costs totaling an~$80k initial investment. If you yielded 45% of the rent after all expenses, that would equate to a 8.5% return not including the extra work and the risk of losing equity with the downturn.

Alternatively, middle market syndicates are in a much more stable section of the market. Properties valued between $2M-$50M are usually sold on a cap rate basis, meaning that the income drives the price of the property, not local comps or speculation. Deals in this market yield 16-18% total IRR and 8%+ tax mitigated yearly cash flow.

If interested, reach out, my team syndicates deals for people in precisely in your situation looking to find long term stability.  I hope this was helpful.

Best,

Salem

@Jason Wutzke No problem. Once you get the agreement and some more info, give us an update.  I'd be happy to help you back the agreement's math to your distributions so that you can know if it's getting distributed properly.  

I will also add that you should review the GP/LP split in the operating agreement.  

If the was written heavily in favor of the GP, the returns could be structured in such a way that anything above a specific threshold goes exclusively to the General Partners.   For example, if that threshold was set at 10%, and the property performed 11%, 15%, and 13% over the last three years, you would indeed only see the 10% distribution. 

Hi Richard, 

Welcome to ATL.  I just moved here as well.  Are you interested in doing more 50-100+ units?  If so, PM me, I'm looking to put together an Atlanta based project. 

Best,

Salem

Hello BPs,

I'm looking for a commercial banker contact who has worked with R.E. syndicators in W.Michigan.  

A few points:

-Seeking $250-$750k in total loan value

-30-35% Down Payment

-Ratio of 3x Rent Revenue / Mortgage 

- 2 Experienced Sponsers also have full-time jobs available to underwriting 

Please let me know if anyone can make any recommendations.

Thank you!!

Salem