All Forum Posts by: Shelon Hutchinson

Hello Anthony,

Thank you for taking the time to comment on this post.  I am always looking to connect with a fellow service member.  Are you looking to take an active or passive role in syndication?  It looks like you are still on active duty as am I.  There are a lot of service members who are scaling their portfolio rapidly by shifting to multifamily properties.  

They are syndicating properties using   Regd (506B or 506C).   

As a Naval officer, this process will be simple for you to master as an LP or GP.  

To your question Anthony, my partner I believe everything we do should help improve someone's journey...We do this by bringing Veterans, Service Members, and high net worth investors to build wealth and “Get Their Time Back”...We just so happen to syndicate the purchase of multifamily properties with our friends.

There are a lot of experienced syndicators here in bigger pockets and some of them are veterans.  I host and attend a few virtual meetups weekly to network face to face.  Additionally, there are tons of free information on Clubhouse.  

@David A. This is an interesting take on the topic and you are spot on.  There is some real estate the can be purchased with little money out of pocket from the operator.  As you know our network can improve our net worth.  We all work hard for our money and, amazingly, in real estate our money works for us.  Leverage provides investors with the ability to earn high yield returns on their capital.  

  To your point, David, some syndicators are connected with the right network of investors where the money is sitting on the sidelines waiting to go to work.  In these instances, the syndicators can raise enough equity to cover the capital stack.  On the capital stack, the bank provides most of the leverage and requires the GP team to have the net worth equal to the borrowed amount; has required liquidity, and in some cases contributes up to 5% of the equity.  In our last deal, a 167 units that we syndicated, the GP team collectively contributed close to $1m to the capital stack. 

Thank you for this opportunity to communicate with you.  Let's keep this conversation going, my friend.  

-Hutch

Syndication is a big word for a simple process that is not easy. Feel better? Okay, let me break this down “parade rest” (to its simplest form). To put this simply, the process as it applies to apartment syndication is the pooling of money from investors to purchase a large piece of real estate that they might not have been able to purchase themselves.

The prefix “Syn” means together. One of the things you will find interesting about multifamily investing is that it requires a team that has synergy. Resources provide better results when they are employed properly. It helps you minimize risk (Limited Partners); “Get Your Time Back” while “Owning More of America”.

There are a few relationships that are created during the multifamily syndication. We will focus on the two, Passive Investors and Sponsors, that you are more likely to be a part of. Passive Investors are busy professionals who love what you do but is aspiring to create more option at a predetermined time in the future. They might have already retired and had an appreciation of keeping their capital working. Sponsor is also busy professionals who get a great deal of fulfillment of being a good steward of the Passive Investors’ capital.

The Passive Investors are oftentimes referred to as Limited Partners (LP). Limited meaning your liabilities are limited to the capital that you invest. All other liabilities are taken on by the Sponsors.

The Sponsors are oftentimes referred to as Syndicators, Managers, or General Partners (GP). When speaking about profession the word syndicator is used; when speaking in terms of the Limited Liability Company that is created for each acquisition the word Manager is used; and lastly, when speaking in terms of the deal structure GP is wildly used. Sponsor will be used to generalize the meaning.

The choice is yours.

Be an LP and continue doing what you love or take on the associated responsibilities and liabilities of a Sponsor.

-Hutch The Marine Investor

@Jeremy Torres-Jimenez

I aspire to add value to all my posts on bigger pockets and other social media platforms. I would really like to answer your question Jeremy. But what I want to know first is, what have you done so far?

“Nothing” is the wrong answer.

And then my next question would be what do you believe are some of the actions that you need to take?

Additionally, what resources have you used in an attempt to educate yourself on your responsibility to investors whenever you take their money?

Travis Watts

It was great having you on our show.  It is amazing the information that you are sharing with other investors.  

My dad would agree with Joe.  He always tells me to make sure that I take care of number one which is myself.  That could sound selfish but it is widely understood that the great things that we want to achieve and the number of people that we are aspiring to help will be a challenge if number one is not taken care of.  

As an active investor (GP) that means developing all the attributes that are consistent with being a good sponsor, to be able to identify, acquire, manage, and exit and asset that provide passive investor like yourself the desired returns.  

As you know Travis, Passive Investor gets to leverage Active-Investors': Time and knowledge; Team and marketing research. 

Thousands of service members retires every year.  Like myself, for the past 22 years, service has been the mission that leaves little time for things outside of the Marine Corps.  Has I approach retirement and have gotten more involved in multifamily syndication, the mission is shifting towards educating retired service members on how they can get there time back by creating a path to generation wealth.  

Yannik Cudjoe-Virgil

I like the idea of outsourcing. If I understand you correctly, you are using VAs to do the leasing on your smaller properties? Neal Bawa is a big advocate for all things VA. I am all about freeing up time. I want my children to learn a lot from my real estate journey so I have my daughter remove all the dead space from my podcast videos which takes a lot of back and forth and she learns a lot in the process.

You are correct about spreading knowledge.  My partner and I find that to be very important.  Our investors want to know about the things that affect their money.  We sat down with one recently who has been investing in real estate for years but was not familiar with the syndication model.  He really appreciated it and decided to invest with us.  

There are a few other things that the investor is needing to learn more about to be able to take full advantage of his capital that he has available.  We are providing him information in bite-size pieces so he is not overwhelmed. 

Hutch 

@David M.

and

@Jake Vayda

It sounds like you two gentlemen have complementary situation. This could potentially be turned into a joint venture wear one of you provide the cash needed for closing and the other one provide the Capital needed for the holding cost.

We believe everything we do should help improve someone's journey...

We do this by bringing Veterans, Retired Service Members and Accredited Investors to build wealth and “Get Their Time Back”....

We just so happen to syndicate the purchase of multifamily property with our friends.

We are rolling out our March to 1,000 doors and are seeking some assistance.

We believe that investing with a purpose is important, we are committed to donating a percentage of our acquisition fee to a non-profit organization that serves Veterans.

We see this as a way for 190 Veterans, Retired Service Members and ~260 accredited investors to create financial freedom and “Own More of America” by investing in apartment buildings.

This will require extraordinary efforts to attain this big audacious goal.

🎇For those are scaling their multifamily portfolio and investing with a purpose:🌃🌃🌃

💥✅What are some tactical process that you are implementing and what are some of the ways that you are giving back?🔥

@Gabriel J.

Your next option could be to get 9 more families and friends to invest $50k ($500k total) with you to syndicate an apartment building for $1.75M with a cash flow that is beneficial to all. You could also make approximately $35k in acquisition fee at closing; 1 to 2% of the cash flow for managing the asset and get 20% of the upside when the property is sold in 5 to 7 years.

-Hutch

@Jacob Lapp

I was stationed in Hawaii for 10 years and 3 months. I love everyday there. I never had any issues with the locals. In fact, I love the culture and the people so much that I marry one and have been married now for 19 years.

Multifamily is not a big thing there. Condos come with a big HOA.

The native are however very protective of the island as we all should be.

I am looking to move back there after I retire from the Marine Corps and have $10,000 per month in passive income through multifamily properties.

-Hutch