All Forum Posts by: Scott Morongell

Personally started with multifamily as single-family is not a prerequisite to MF. That being said, your first deal should be whatever will get you to take action. If you have to start small there is no shame in doing so! 

Lenders will tell you if its recourse or non and how to properly set up your entities. Don't get wrapped up in the minutia. 

Total JUNK! they tell you to find a deal and the money will come, but why? Well, they've probably have done a few deals and have a decent investor base built up. They teach you just enough to be dangerous but leave out the vital fact of how important capital really is. So you lock up a great deal, have your non-refundable earnest money hard already and now you PANIC! Raising the money is 1 piece of many moving parts once a deal is under contract. If you have preconditioned and vetted investors you will not raise the money in time. So, what do you do? Well, 99% of investors will run right back to the guru who taught them enough to get this far and cry out for HELP! What they do not understand is the guru will end up taking 90% of the GP from you leaving your efforts, time, and risk disproportionate to your compensation in the deal. 

MORAL OF THE STORY IS FIND MONEY WAY WAY WAY BEFORE FINDING A DEAL!!!!

I'll send you a DM

@Zaid Bender the best market is the one you know or have boots on the ground in already. It's also important for the market to be semi-close or easily accessible for you by plane. Real estate is hyperlocal and every growing market has good and bad pockets. If you invest in a market where jobs are moving to, so will the people. I'd look for larger MSA's and landlord-friendly states. 

@Matthew Banks congrats on getting involved in the world of MF. I'd suggest reading and listening to more podcasts or books and posting certain questions as you will be able to get much better replies!

@Arnel Bueno you are def not the only one in this situation. First off you can find deals in any market if your persistent and search long and hard enough. Secondly, I now have many investors that would prefer to invest in our multifamily deals because they didn't realize the time, hassle, and headaches it takes to run a 4-25 unit size deal. The few extra % they make doing their own deal typically gets washed out from the tax benefits of a large multifamily asset. It really all depends how much time you want to spend in real estate and what your goals are. 

@Bellman Tumasang debt will most likely be recourse. Only way you can probably get non-recourse is if you have someone else come sign on the loan that has multifamily experience, and net worth to satisfy the requirements as well as post liquidity. Recourse shouldn't scare you if you know what you're doing. Don't worry about LLC structures as your legal team will tell you how to navigate those areas. The census bureau has good info for market research. I highly suggest picking a market that you have knowledge in already or with some boots on the ground.

@Rob Roham you've come to a great place to meet syndicators. There are many on here that are very successful. I'd first learn to UW properly which isn't as easy as some may want to believe. You've got GP/LP shares, splits, waterfalls, prefs, and then multiple stress tests to be done. Since your syndicating your most likely going to have an exit in 3-10 years time, therefore, you will have to pick an exit cap and proper debt structure. 

Once you're grounded in the fundamentals of UW then start raising capital and get a feel for how much you believe you can raise. How much you think or know you can raise will determine the size of deals you're going to look at. 

Not exactly sure how brokers like to operate in CO since I don't invest there but it generally speaking I have always been able tour before putting in an offer. How big are the deals that you're looking at? If they are 1-5 units I would understand their concerns as tenants may get wind of the owner trying to sell and either skip on rents or move altogether... My suggestion is throw in an offer "reasonable" and have a contingency in the contract.  

@Nelson Lin the beautiful part of investing is only you get to decide what is fair. Yes, there are industry standards and to one group of sponsors this would certainly fit that conversation. 10% equity is very good as most sponsors do not put that amount in. They literally try to put the least amount as possible and that $$$ amount comes from the lender to justify some sort of alignment in the deal. 

At the end of the day, 80/20 is fine if you're with the RIGHT sponsor. So many people trying to put together multifamily deals at the top of the market without fully understanding all of its intricacies.