All Forum Posts by: Steven Gesis

Hi guys, I have read a some of your books and watched some of your videos, but right now, I am feel so bad. let me present myself, I just got in the US 9 years ago, I bought my first house in 2016, single home 3 bed and 1 bad, 1 1/2 stories, 1 1/2 acres. I have been renting out one bedroom and sharing the bathroom for 4 years,, now I have improved my second floor with a new bathroom and renting out my second floor as Airbnb, and for now it is really great. For now everything is great, I just find another house in one of the best neighborhood in Richmond VA, Mechanicsville, a house 3 bed and 2 bath, easily you can rent it out for 1800, plus there are a guest house very separated from main house, fully equipped, 3 bed, 1 bath, 2 living room and kitchen , separated entrance for another street, and parking space for more than 2 cars. The price it seems me very good, but I can get any lender to make a deal on this, I can put a down payment of 15.000 plus leave my house as guaranteed, but nothing. Really all of this it took me down. I am trying to get in to investing in real estate, but with out a lot of money is very difficult, and I understand why most of the person quick.

Hello BiggerPockets,

My name is Chloe Darst. I am 22 years old and have recently decided to pursue real estate investing.

I am in the market for a single family rental property in East Tennessee, where I currently live. Although, I have much to learn before this goal becomes a reality.

For now my goal is to connect with New Investors, who are still learning the basics like myself, along with experienced remodels, to help teach me the ropes of real estate, as I continue to learn and grow.

I am very excited to join the BiggerPockets community and would absolutely love to connect with others, so please feel free to reach out!

Hello. I been interested in REI since 2018 but have a current career in nursing so have not dedicated myself to investing much. I am looking to transition into real estate full time! I am a current wholesaler but cold calling is the worst for me. I am interested in working in RE to get to know the business more. Just looking to network and possibly meet up with like minded individuals.

I´m starting with investments in real Estate in US as a foreign person, so a lot of support is required due to living abroad.

After the researching process, I´ve decided to start with a single family flip in Detroit MI. Now I´m looking for a rehab company with a lot of support and patience to deal with a beginner and additionally outside of US. Any recommendations for this partner company?

I´ve found a lot of single homes at "good" prices but I´m not sure if the rehab company is the first thing i need to do or if I´m missing something important. All advice is welcome.

Best regards,

Once you choose a real estate syndication deal, sign the PPM (private placement memorandum), and send in your funds, you have very little control over the performance of the asset. You’re truly a passive investor at that point and must fully trust the sponsor team to manage the daily operations effectively, execute the business plan, and guard (and grow!) your investment.

This is exactly why you should be absolutely confident in the deal and the sponsor team up front. Do your research, squash any doubts you may have, and ask questions BEFORE investing with a new real estate syndication sponsor.

This list of questions provides some great ideas and may guide you toward subjects and concerns that should be on your mind as a new investor. It will also give you some ideas of things that other investors are asking that you might not have thought about. Some of these can be found on your own in the investment summary or through independent research, but others you may need to ask the sponsor directly.

101 Questions To Ask The Sponsor Before You Invest In A New Real Estate Syndication

1. Why did you choose this market?
2. How long have you been in this market?
3. What’s the biggest employer in the area?
4. What can you tell me about this submarket?
5. What other projects or developments are going on in this area?
6. Have you done other projects in this submarket?
7. When was this asset built?
8. What do you like about this asset class?
9. What don’t you like about this asset class?
10. How many units are there?
11. What’s the unit mix?
12. What is the cost per unit, and how does that compare to the average for this area?
13. What’s the current occupancy?
14. What do you project the stabilized occupancy to be?
15. What’s the median income for current tenants?
16. What’s the business plan?
17. What are the projected premiums for renovated units?
18. How did you come up with the projected premiums?
19. How much money are you raising for this project?
20. How much of that is for the down payment?
21. How much of that is for cap-ex (capital expenditures)?
22. What are the projected returns?
23. What is the overall equity multiple?
24. How is the deal structured?
25. What are the equity splits?
26. Is there a preferred return? Why or why not?
27. How often do you pay out investor distributions – monthly, quarterly?
28. What’s the projected hold time for this project?
29. How did you come up with that timeline?
30. What if the market is soft when the projected hold time ends?
31. How are investors kept up with the progress?
32. Are you taking an acquisition fee?
33. Are you taking an asset management fee?
34. Is there a refinance fee?
35. Is there a disposition fee?
36. What would happen if I had an emergency and needed access to my funds?
37. Who is the property manager?
38. How many deals have they managed like this?
39. Have you worked with this property manager before?
40. How did you find this property manager?
41. Why is the owner selling?
42. How did you find this deal?
43. How much experience do you have with this asset class?
44. What is the total loan amount?
45. What kind of loan are you getting?
46. Is the debt recourse or non-recourse?
47. What are the terms on the loan?
48. What is the LTV (loan-to-value) ratio?
49. What is the debt coverage ratio in year 1?
50. Did you walk the property?
51. Who is on the team?
52. What are their roles and responsibilities?
53. Have you done deals together as a team before?
54. What happens if you get hit by a bus?
55. Who is your securities attorney?
56. Is this offering open to non-accredited investors?
57. Is this a 506(b) offering? 506(c)? Other?
58. What will I find when I run your background check?
59. Have you ever been a passive investor?
60. What’s your ultimate goal with syndications?
61. How would you feel about giving me a few references?
62. Are you raising enough for cap-ex?
63. What are the chances of a capital call (i.e., the sponsors requesting more money from the investors)?
64. What’s the purchase cap rate?
65. What’s the projected reversion cap rate (i.e., exit cap rate)?
66. What did you do to stress test this deal?
67. Have you visited, toured, and secret-shopped the comps in the area?
68. May I visit the property?
69. Do you need a loan guarantor?
70. What’s the worst-case scenario?
71. How do you do your due diligence?
72. How much deferred maintenance is there on this property?
73. Are you doing this full time?
74. What did you do before this?
75. Why did you get into syndications?
76. Are you part of a syndication coaching or mentorship program?
77. Tell me about a time during a project when things didn’t go according to plan.
78. Do you need anyone for the earnest money deposit (EMD)?
79. What do we get for helping with EMD?
80. When does EMD go hard?
81. What happens if you have my EMD, it goes hard, and you can't perform?
82. May I invest with retirement funds?
83. What’s the minimum investment?
84. What’s the maximum investment?
85. Who’s your asset manager?
86. Who does your accounting?
87. When do you send out Schedule K-1s?
88. Will you be doing a cost segregation study?
89. What’s the plan if the economy changes and you can’t sell?
90. Does your lender offer loan extensions? How much do the extensions cost?
91. .Are you bringing your own money into the deal?
92. .How do I send in my funds – wire, check, other?
93. What is the deadline for getting my funds in?
94. Will you be offering an investor webinar?
95. What percentage of the units will be renovated, and why?
96. Once the deal closes, what are the first three things you plan to do?
97. Are you rebranding the property?
98. If you could wave a magic wand and change one thing about this property, what would it be?
99. What are the biggest risks of investing in this deal?
100. What do you like about the deal?
101. What DON’T you like about the deal?

Hopefully, some questions in this list sparked new ideas and helped you realize that no question is off-limits. Asking tough questions is a great way to vet potential real estate syndication deals and sponsors.

If you feel as if you aren’t getting clear answers or are getting brushed off, take that as an indication of how you’ll be treated throughout the project. Remember, there will always be another deal, so there’s no reason to rush into anything.

I am looking to purchase an apartment complex in Los Angeles. Target price being around 1 million. Most properties I’ve seen are in bad neighborhoods. Mostly east Los Angeles or Crenshaw area. Wondering if this is a safe place to park an all cash investment. Can’t help but think of detroit and all of the real estate investors that lost big there. Any advice is welcomed. 

From what I can see, the younger generations are generally far less capable than those that grew up prior to technology taking over our lives. They have no interest in maintaining a lawn. They don't know how to swap out a garbage disposal or snake a toilet. Heck, half of them can't live on their own without a therapy animal. I honestly anticipate a growing demand for rentals within the next 10 - 20 years, probably higher than anything we've experienced before.

This looks like one of the many old Cardinal properties that are all over the Midwest.  I hope you have sufficient capital for the maintenance issues they tend to have.

For such an apparently large firm, it seem strange that you seek advice on how to operate a property from an online forum.  Don't you have this expertise in-house?

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