All Forum Posts by: Tamiel Kenney

@Shiloh Guin  Hi Shiloh!!!  Welcome and Congrats on getting started!  We love Real Estate!  It is definitely a very exciting business to be in.  We started off doing 1-4 units at a time 23 years ago...but now we choose to focus only on the larger properties. We learned that we did not like doing the work on the units ourselves (in the few free hours we had after work) and we did not like Landlording. We syndicate large apartment deals now in Dallas, Atlanta and Memphis.  If you have any questions about apartments...don't hesitate to ask.  Good luck as you begin to grow your portfolio!!!  This is only the beginning!

@Matthew Stapleford  Hi Matt!  We teach Apartment Syndication & our events are held in Dallas 3x/year.  TheRealEstateGuys also teach Syndication (general syndication good for anything you are trying to syndicate).  They hold 2 Syndication events a year in Dallas. If you are willing to travel...there are definitely some great events to learn from and are great for networking.  As a syndicator, it is important to start building your "LIST" of potential investors as soon as possible.  This is a relationship business and it takes time to build these relationships. The more you learn about the Lingo this business uses (whether Single Family or Multifamily/Apartments), the better you will be able to network with others in the industry.  

Citygate is who we use and love!  http://www.citygatepropertygroup.com/about. Bradley is our rep that works with us and is awesome!

Remember when choosing a property management company or any other contracting service for that matter, CHEAPER is not always (and usually NOT) the best.  More often than not, You Get What You Pay For.  

Good luck and let me know if you have any other questions!

@Kevin Nguyen  I agree with Shane!  Two additional points…I would find out if the people in the investment group are signing on the loan and if not, why.  Also, just as an FYI…general rule of thumb is…the sponsor group needs to have a combined net worth equal to 100% or more of the loan amount and 10% or more post liquidity.  Just a note…if you are assuming a loan, then is it not uncommon where the lender will require ONE person in the group has to meet the net worth and post liquidity requirements.

@Brittany Sanchez  Hi Brittany!  If the deal is good, it is very likely you can find someone to partner with you on the deal or do a small syndication. If you do a syndication, there are many rules because it is considered a "security" and you need to make sure you understand what you can/cannot do. Rules determined by the S.E.C. (Security and Exchange Commission).

I would not necessarily promote paying a higher price, but…if the deal still meets your criteria at a slightly higher price, you could try to negotiate with the seller and offer a higher price in exchange for a lower down payment.

Also, I am not sure if you have purchased properties before, but if you are considering taking other people’s money, make sure you go through a very thorough due diligence. Ensure you engage a 3rd party to do the due diligence and ask them for sample reports they have done in the past. Also, make sure the due diligence company provides quotes for repairs. Some companies provide a report with no estimates for repairs and this is somewhat useless unless you know what it takes to fix the identified issues.

@Wade G. 

One of the biggest differences is the way MF is valued vs. SF. With SF, your value is pretty much capped based on comps. With MF, you can increase the value by increasing the NOI (increase revenue and/or decrease expenses). Even in a conservative market where you use a 10% cap rate…that means every dollar you increase the NOI is actually $10. You can't do the same thing with SF. Also, MF is typically non-recourse financing whereas SF is typically recourse. I have owned both and would pick MF over SF. I had a lot more headaches with my small properties than I do with our 1900 MF units.

Thanks,

Tamiel Kenney

@Michael Charles  Hi Michael!!  We always tell people that partnering up with an experienced syndicator is a great way to get your foot in the door.  They have the track record, the story to tell (Stories Sell), and the ability to prove they can close a deal!  If the syndicator purchases larger MF assets, then they can qualify for a Fannie Mae or Freddie Mac loan.  (You need experience with these agency loans in order to get a Fannie/Freddie loan. -- Here is another Catch 22 -- Another reason to parter up with someone who has Agency experience.)

Even though you may partner with someone to go after bigger deals (and Syndicate)...You still need to continue to build your investor list (or database).  

Hope this helps!

@Blake C.  Hi Blake!  We started investing when fresh out of college.  Now we are buying/syndicating Large Commercial Apartments.   @Antoine Martel is absolutely correct in that there are so many niches within Real Estate Investing.  You need to decide which niche you like and want to move forward with.  (Single Family - Wholesaling, fix & flip, buy & hold; Multifamily Residential - 2-4 units; Multifamily Commercial - 5 units+; Commercial - Strip Malls, Warehouses, etc; Land; Mobile Home Parks; Assisted Living, etc)

Once you decide on your niche, learn as much as you can by books, podcasts, articles, and conferences that focus on that niche.

If you have not heard about The Real Estate Guys...you should check them out.  They have 2-3 events a year and have speakers that specialize in several of the main niches. Their podcast and newsletters are filled with great info.

Bigger Pockets will also have lots of good resources on many of these niches!  I believe I saw that one of the Bigger Pockets books is perfect for helping you to learn about many of the different niches out there.

Hope this helps!

@Anita Ahuja  Hi Anita!  I would definitely be interested to know the location and the asset class of the property.  I invest passively and am a syndicator of large apartment investments.  7% return is on the low Side, unless it is an A Class Asset in a High Growth market. Although, I imagine if the property is in a location like California or New York...this is considered a normal to good return.

When we look for a deal to purchase, raising rents cannot be the only way we can make the numbers work.  The problem with this is it takes time to turn the units/leases in order to raise the rents.  Also, upgrading apartments is typically done prior to the increase in rents (although we have increased rents without any upgrades at all).  You should know if they plan to upgrade the apartments as they turn (as tenants move out), and how much they plan to spend on the upgrades.  The location and demographics will dictate what types/quality of upgrades should be done in order to maximize your returns.  You don't want to overdo the upgrades as you may not see the rent increase enough to cover your costs.

The investments we consider are B & C class assets (1970-1985 mostly).  Value Add properties, which means they all require some level of upgrades to maximize rents.

Sophisticated investors seem to like the Waterfall Equity Split like you described...but the average investor finds it complicated.  Therefore, we see mostly straight splits. For example: 10%+ Cash on Cash Return and 70%-80% Precipitation to the investors.

1-3% Acquisition Fee is what we have seen (1-2% is more typical)

1-2% Asset Management Fee is typical.

Hope this helps.

@Jeff Chen  Syndication investing is a great way to go for sure.  We have invested passively in apartment syndications , as well as syndicated our own apartment investments.  The returns we have seen are based on B & C class assets - and average more around 10%+ Cash on Cash return and from 70% - 80% Precipitation.