Hello, I am studying how to invest in apartment complexes. It is my understanding that some REI groups/meet-ups offer group buying (a syndicate?), in which one investor becomes the lead and others simply contribute funds. Return can reach double digits. Where can I learn more about this type of investing?
Some other questions are:
- Where can one find such offers? Especially if one cannot visit those meetups.
- How do you check the validity of such deals? Is there a way to insure the funds?
- What are some main principles of such investing?
Kind Regards,
These quasi seminar companies are doing things the "old way" and investing like what you mention is much simpler today by visiting crowdfunding sites. We and other platforms like ours have funds and syndicated offerings on our site for investing in syndicates.
Care must be taken to invest in projects from people that know what they're doing. This is harder to do online because you can't interact with the promoter as much. So a lot depends on how you intend to do diligence and how advanced you are in your investing career. It seems like you're just getting started so reading some books and material from people on either BiggerPockets or other places online should give you a good sense for who knows what they're talking about.
I could literally write a whole book in this post about what to look for, but some of the bullet points given my limited time are:
-Track Record - Does the syndicator/operator/issuer understand the deal type and the market that they're raising funds for? How have their investments performed historically? What experience do they have in this market for this specific type of project?
-Risk - Does what you're being offered make sense given the risk of the project and where you are in the waterfall? This is a much harder question for a newbie to answer. What other risks are there? What things have to go right for the promoter to achieve the projected returns and how likely are they to transpire?
-Compliance - Are the documents organized correctly and is the promoter using the right exemptions?
-Interaction / Follow-up Post Investment - What systems and processes does the promoter have set up to communicate investment performance post investment with the investor?
Hope this helps some. Feel free to reach out to me if you have any questions.
I agree with Nick. Definitely check out those two groups. You'll meet people who are making those offers, and how to evaluate them. You have to get to know the person yourself and be educated enough that you can evaluate the deal independently (instead of just trusting them).
I am not aware of a way to insure your investment. In fact, the documents that you must sign have pages and pages of disclaimers warning you that you could lose all your money, in order to cover their *** if things go sour.
You say you can't attend the meetups. You really do need to meet the people in person. If the person putting the deal together is above-board, they only want investors with whom they have an existing relationship, who is sophisticated enough to understand the risks, and to put it bluntly, can afford to lose the money they put up in the unlikely event that the investment fails.
Agree w/ the other responses. Apt. investing isn't a great route to do w/o socializing w/ fellow investors first, though Diversified Metroplex Investors may be an Plan C option if you can't/won't.
Risk and reward are correlated, and you're not going to find double digit returns on an insurable investment. Main principals of MF, put succinctly, are to educate yourself thoroughly first, perform your own due diligence on every deal, and to hire competent professionals to guide you if you don't understand the legal agreements. It becomes a passive investment only after you've made it, but you should do a fair amount of work making connections and analyzing deals on the front end.
I agree with Nick. Definitely check out those two groups. You'll meet people who are making those offers, and how to evaluate them. You have to get to know the person yourself and be educated enough that you can evaluate the deal independently (instead of just trusting them).
I am not aware of a way to insure your investment. In fact, the documents that you must sign have pages and pages of disclaimers warning you that you could lose all your money, in order to cover their *** if things go sour.
You say you can't attend the meetups. You really do need to meet the people in person. If the person putting the deal together is above-board, they only want investors with whom they have an existing relationship, who is sophisticated enough to understand the risks, and to put it bluntly, can afford to lose the money they put up in the unlikely event that the investment fails.
Thanks, Paul. I suspected that the next step is to learn how to evaluate deals independently. Do you have any advice on how to do that?
There are two groups in Texas you've probably heard of: Lifestyles Unlimited and Brad Sumrok. Check out both. See if they make sense to you.
Appreciate your recommendation, Nick. Do you know of similar groups in FL?
Agree w/ the other responses. Apt. investing isn't a great route to do w/o socializing w/ fellow investors first, though Diversified Metroplex Investors may be an Plan C option if you can't/won't.
Risk and reward are correlated, and you're not going to find double digit returns on an insurable investment. Main principals of MF, put succinctly, are to educate yourself thoroughly first, perform your own due diligence on every deal, and to hire competent professionals to guide you if you don't understand the legal agreements. It becomes a passive investment only after you've made it, but you should do a fair amount of work making connections and analyzing deals on the front end.
Grateful for you outlining the main principles of MF. I am reading all I can here on BP. Anything else worthy of looking at?
Thanks, Paul. I suspected that the next step is to learn how to evaluate deals independently. Do you have any advice on how to do that?
If you can't attend seminars (Brad Sumrok has one in Dallas this weekend, and Lifestyles has one every month), then the next best thing is to read. There are many books out there, such as by Dave Lindahl and Steve Berges. I haven't read them myself. For free information, look up Peter Harris of Commercial Property Advisors. His site has free videos and a free book download, which is a start, but probably not enough information to begin investing. There are other sites where I've been able to find free information, such as Lance Edwards. Also, you could post questions on Bigger Pockets. This site is full of people who don't think you should pay for any training, which indicates people are willing to help you for free.
Thanks, Paul. I suspected that the next step is to learn how to evaluate deals independently. Do you have any advice on how to do that?
If you can't attend seminars (Brad Sumrok has one in Dallas this weekend, and Lifestyles has one every month), then the next best thing is to read. There are many books out there, such as by Dave Lindahl and Steve Berges. I haven't read them myself. For free information, look up Peter Harris of Commercial Property Advisors. His site has free videos and a free book download, which is a start, but probably not enough information to begin investing. There are other sites where I've been able to find free information, such as Lance Edwards. Also, you could post questions on Bigger Pockets. This site is full of people who don't think you should pay for any training, which indicates people are willing to help you for free.
This is great, Paul! I am following your recommendations word-by-word. Looks like I am in the right company by being on this forum. ;-)
About Dave Lindahl, I ran a google search. The first result was an article on how he scams people. http://scamsgalore.com/dave-lindahl.html Did you know that?
Steve Berges makes more sense. How did you know of him? Do you know how long he has been around?
Peter Harris was helpful. I am going to dive in his blog. Read the latest post and learned something new. Thanks!
Lance Edwards seems to have some useful information on his website but has many negative reports online.
Nonetheless, thanks for taking time to point me to specific moguls in the field.
I think that investing in syndicated deals can give amazing returns on investment, but only if you do it with people who know what they're doing! I have a goal of putting together my first syndicated deal by the end of 2016. My advice would be to read read read. Regarding Dave Lindahl- I am aware of that scam article and don't agree with it. He owns over 8000 units, I believe in learning from those who are actually practicing what they preach. He does educate people on how to do these deals, but it's what you do with the education that determines if you're sucessful or not. I doesn't hurt to read his book and then make your own judgment. Read other books suggested by other members too! We are all here to help and that's my 2 cents. Good luck!!!!
The syndications industry has some very big players who do several offerings each year. I wrote a book about it, if you would like to learn more. Cashing In Tax Free.
Best of luck- Leslie
Check out Dave Lindahl's training. He has courses on raising private money and apartment investing. Invest in your education, because syndicating deals can be overwhelming to the beginner, but very lucrative. The motto of exploding your wealth is to control as much property with as little of your own money as possible.
I think your strategy is great
Good Luck
Gino
This book is a good resource for Syndicators as well, you can find it on Amazon.
It's a Whole New Businessby Gene Trowbridge (Author)
I work for DaveLindahl. We like to see a cash on cash of 12%+, debt coverage ratio of 1.6%+ and a CAP of 8%+
I have a case study where Dave took a 100 unit property from Loopnet and showed how he would evaluate it and what he would pay for it. If you are interested shoot me an EMAIL I can send it to you.
Good luck
Paul
There are two groups in Texas you've probably heard of: Lifestyles Unlimited and Brad Sumrok. Check out both. See if they make sense to you.
Appreciate your recommendation, Nick. Do you know of similar groups in FL?
Same groups. They have people in FL as far as I know
These quasi seminar companies are doing things the "old way" and investing like what you mention is much simpler today by visiting crowdfunding sites. We and other platforms like ours have funds and syndicated offerings on our site for investing in syndicates.
Care must be taken to invest in projects from people that know what they're doing. This is harder to do online because you can't interact with the promoter as much. So a lot depends on how you intend to do diligence and how advanced you are in your investing career. It seems like you're just getting started so reading some books and material from people on either BiggerPockets or other places online should give you a good sense for who knows what they're talking about.
I could literally write a whole book in this post about what to look for, but some of the bullet points given my limited time are:
-Track Record - Does the syndicator/operator/issuer understand the deal type and the market that they're raising funds for? How have their investments performed historically? What experience do they have in this market for this specific type of project?
-Risk - Does what you're being offered make sense given the risk of the project and where you are in the waterfall? This is a much harder question for a newbie to answer. What other risks are there? What things have to go right for the promoter to achieve the projected returns and how likely are they to transpire?
-Compliance - Are the documents organized correctly and is the promoter using the right exemptions?
-Interaction / Follow-up Post Investment - What systems and processes does the promoter have set up to communicate investment performance post investment with the investor?
Hope this helps some. Feel free to reach out to me if you have any questions.
I work for DaveLindahl. We like to see a cash on cash of 12%+, debt coverage ratio of 1.6%+ and a CAP of 8%+
I have a case study where Dave took a 100 unit property from Loopnet and showed how he would evaluate it and what he would pay for it. If you are interested shoot me an EMAIL I can send it to you.
Good luck
Paul
Contacted Paul and got files by e-mail. Thanks Paul!
These quasi seminar companies are doing things the "old way" and investing like what you mention is much simpler today by visiting crowdfunding sites. We and other platforms like ours have funds and syndicated offerings on our site for investing in syndicates.
Care must be taken to invest in projects from people that know what they're doing. This is harder to do online because you can't interact with the promoter as much. So a lot depends on how you intend to do diligence and how advanced you are in your investing career. It seems like you're just getting started so reading some books and material from people on either BiggerPockets or other places online should give you a good sense for who knows what they're talking about.
I could literally write a whole book in this post about what to look for, but some of the bullet points given my limited time are:
-Track Record - Does the syndicator/operator/issuer understand the deal type and the market that they're raising funds for? How have their investments performed historically? What experience do they have in this market for this specific type of project?
-Risk - Does what you're being offered make sense given the risk of the project and where you are in the waterfall? This is a much harder question for a newbie to answer. What other risks are there? What things have to go right for the promoter to achieve the projected returns and how likely are they to transpire?
-Compliance - Are the documents organized correctly and is the promoter using the right exemptions?
-Interaction / Follow-up Post Investment - What systems and processes does the promoter have set up to communicate investment performance post investment with the investor?
Hope this helps some. Feel free to reach out to me if you have any questions.
Thanks for the info, Bryan! Well thought-through questions. Looks like you know what you are talking about. I'll be catching up with reading.
I'm really curious, of everyone who has replied....are any of you making double digits on this type of investment? If so, is it possible to see your case study? I've always doubted whether you could achieve double digits and wondered if it was based more on # of units vs. # of investors.
@Paul B. I'm completely with you when you say that networking and knowing who is putting together the deals. I want to know they have a solid history before I put eggs in that basket.
@Dennis P. Lifestyles Unlimted seems like a great company to get involved with. I listen to their rado show weekly and always learn something new.
@Dawn Oishi, I got ~30% return last year. Invested $50K in a syndication in Nov 2014. Received $25K in Dec of 2015 upon refinance. Still have ~$40K equity in the project of which $25K is my original capital.
@Dennis P. as far as analyzing I would You Tube Commercial Property Advisor. They have a video that breaks down analyzing Commercial Property.
Hi Dennis
I would look up an investor/ teacher called Craig Haskell. He has a very good syndication program. It is a specialized investing, so don't expect to become proficient without spending money for your education. Listening to podcasts is great, but to be a successful syndicator, you need to learn from someone doing it
Good Luck
Gino
@Dawn Oishi, I got ~30% return last year. Invested $50K in a syndication in Nov 2014. Received $25K in Dec of 2015 upon refinance. Still have ~$40K equity in the project of which $25K is my original capital.
Nice! How did you leverage the risks?
@Dennis P. as far as analyzing I would You Tube Commercial Property Advisor. They have a video that breaks down analyzing Commercial Property.
Is it by Peter Harris?
Yes it is.