All Forum Posts by: Tony Castronovo

📢 Have you been considering a business partner? Did you know that business partnerships are like marriage...easy to get into but very difficult to get out of!!

Before you commit 💍 to your next business partner, let us help you "date" smarter.

📅 Join us on Thursday, August 29th at 5:30 pm CT and learn how to find your perfect match in business!

Here is what we will cover:
- Types of business partnerships
- Where to find business partners
- What to look for in a business partner
- Deal breakers and what to watch out for
- How to approach partnership discussions
- Tying the knot and making if official

Ready to find your perfect business partner match?
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Not sure I can commit to weekly but I’d be interested in perhaps a monthly meeting. 

@Joseph Waitkevich are you looking at single family or apartments? I’ve got 80 units 2 miles from Texas A&M. We focus mostly on workforce housing but have had students as well. Full on student housing is definitely a unique model/approach.

I cannot make this one @Zach Strickland.  Hope it will become a regular thing as I would like to attend the next one.

I'm a maybe....currently have tentative plans that weekend but could be changing.  I would love to come to this if I am in town.  Beers and BRRRS are both favorites of mine!!

@Steven Moore if you are buying a distressed property it may be difficult to go the conventional lending route. Most banks and credit unions have a hard time lending on fixer uppers. Alternatively, if you can find a HML or private lender with decent rates/terms you can acquire that way and then refi into a conventional loan once you've done the rehab.

Before I got into MF, this was my model. I’d purchase a distressed property for $100-110k, put $20-25k into the rehab, place a tenant, then refi in 90 days. We were usually appraising for $160k ish post-rehab.

Yes, you have two transactions and the extra closing costs, etc. But lenders were more willing to lend on rehabbed properties with leases in place. There are HML's that also have "landlord loans"... in other words, they handle both transactions (usually through a lending partner). If your deal can pencil out it's just the cost of doing business.

My 2 cents.

I think the options are to get a KP or GP to join you.  My understanding is the KP is really just there as a guarantor for the loan (I believe 1% of the loan amount is a customary fee), whereas a GP has operational responsibilities (part of the operating agreement) and usually has an equity split at the GP level.  For newer deal sponsors it could make sense to bring on a GP for the extra credibility they have and/or other benefits such as help raising capital, etc. (assuming they have done their own deals).  Here is some good info:  https://www.biggerpockets.com/...

Hi @Brian Alfaro...I think I know just the coffee shop (which I have not been to yet but now moved closer and just down the street from me....my running buddies meet there alot).  I'd enjoy getting together...just in smaller groups for now.  Keep me posted.

Thanks for sharing @Susan Tan...and congratulations on a great year!  I like the recap and given the challenging year for many, it's nice to celebrate the successes.

@Gabriel G. congrats on taking these early steps at such a young age! I think most of us REI's would have wanted to start earlier. I only started at the age of 45 (now 51). Time is a beautiful thing! Even if you bought just one house per year for 10 years you would have some really nice cash flow, a great chunk of equity, and some awesome tax benefits.

I started that way (albeit much later in life). I was buying a home every 3-4 months...mostly following the BRRRR method. Once I learned the business and had repeatable & predictable processes and systems in place I wanted to accelerate. So I leveraged into my first multifamily. I went solo on that deal then built up enough equity to go after my second, which I syndicated (brought in partners).

I bring up all this to say that if you are working on setting your goals you might think about what draws you to real estate. Is it purely for financial reasons (passive investment) or do you see making it a career? Personally, I love being an ‘active’ real estate entrepreneur!! I’ve thought about why I work do hard on my properties when I can make a solid return by investing my capital passively. Maybe that’s a possible exit strategy but not for me anytime soon.

I encourage you to develop a roadmap and plot out how you want to be involved in real estate over time. 
— Tony