Closed on 155 Units in Houston Yesterday! 3 Lessons Learned...

30 Replies

Yesterday my biz partners and I closed on 155 units in Houston. It's my 3rd syndicated deal. My first was a 168 unit, second 250 units and this one is 155 units. In case you missed it, here are the 2 lessons I learned from my 250 unit deal I closed on last August: https://www.biggerpockets.com/forums/223/topics/217842-closed-on-250-apartments-in-houston-texas-yesterday-2-lessons-learned

Now, let's get to the lessons learned on this 155 unit. 

1. Go farther, faster by playing to your strengths. 

My first deal syndicated deal I did it all. Found the deal, did the underwriting, raised the money, did the due diligence, hired all team members and coordinated with them, closed, asset mgmt, etc.

Great experience but I didn't set the deal up for optimal success because, quite frankly, I'm not an expert at some of those things. For example, underwriting. I'm competent and know how to evaluate if a deal is good or not but I don't have thousands of hours under my belt strictly focused on underwriting deals. And, like most things, the more you do it the better you get. 

So, I learned on this deal that I needed to partner with someone who is phenomenal at underwriting large multifamily deals. I actually partnered up with him on my 250 units and this deal re-enforced the need to do it again because it allows me to do what I'm good at and him to do what he's good at. We're both able to do each other's job but wouldn't do as good of a job. 

This allows the biz to go farther, faster because I'm focused on my craft and he's focused on his craft. Yes, there's overlap as I triple check all underwriting and review in detail but it's better for someone with lots of experience to be the primary underwriter. 

THOUGHT FOR YOU: What's something you are really good at? And what's something you're not good at? Do more of the former and less of the latter because it's likely that you enjoy what you're good at and that's why you're good at it. And, vice versa. 

2. Do Something Consistently on a Large Distribution Channel 

We're in the sales and marketing business. Fix and flippers, wholesalers, multifamily syndicators, etc are all in the sales and marketing business. Perhaps passive buy-and-hold investors aren't...but I'm sure there's a creative way we could connect them to it. 

Since we're in this biz, we must have a consistent, daily presence in order to gain exposure and build credibility with our customers/clients/leads. 

Some large distribution channels (with some brainstorm ideas for them) are: 

  • BiggerPockets (official BP blogger, being an admin, posting, commenting, adding value, offering assistance, being insightful) 
  • Amazon.com (writing books and publishing them) 
  • iTunes (podcasting) 
  • YouTube (video blog, tips, interviews, , make real estate music videos...?! :)  
  • Facebook (create a community around an in-person event you host then open it up to larger audience)
  • Instagram (pics of renovations before/after) 
  • Twitter (proactively answering real estate related questions) 

Whatever you do, do it DAILY. 

Consistently. 

And do it on a large distribution channel. 

So many people want the shiny object. The Super Secret Plan that will let them retire on the beach in Tahiti. I think that's ridiculous. We live in an instant-gratification culture and the truth is that to make a good living in real estate you just need to be consistent with strategic, proven actions. That's it. 

3. There is Major Power in Doing a Recorded Conference Call When Raising Money 

I already posted about this so I'll just link to that here: https://www.biggerpockets.com/forums/432/topics/26...

Thanks for the info. I understand an undereriter in a typical mortgage loan looks at a loan and weighs the risk of a loan but when you say that you partner with someone who does the undereriting what would they be doing or looking at that you might not see?

Congrats!  and I love the part about the Distribution channel, currently thats is what I am trying to focus more on...  I also noticed that all of the channels you mentioned are internet based!

Bottom line, if your not marketing your product or service online (no matter what you sell) your leaving big money on the table!

Eyes = dollars 

Great post!

@Kevin Eddy thanks a lot. Looking forward to getting to know you.

@Tony Velez thanks a lot!

@Scott Harper my pleasure. When I reference underwriting in this scenario I'm referring to running the numbers on the deal. Specifically looking at income, expense and financing assumptions and projections. As far as what he might see that I might not, it could be any number of things since he has done underwriting on hundreds (probably thousands) of large multifamily properties. Specifically, one example has been looking at the best type of financing we should get on the property (i.e. bridge loan vs. long term, interest only, etc.). 

@Matt McCourry so true and the best is if you can mix both worlds on-line and offline. Either take an in-person, local meetup online then grow from there so you're starting with a rabid base of people, or taking a larger online audience and bring them offline to meetups to learn more. 

@John Casmon thanks a lot and I know with your advertising experience you're primed to nail this in a big way. 

Originally posted by @Joe Fairless :

Yesterday my biz partners and I closed on 155 units in Houston. It's my 3rd syndicated deal. My first was a 168 unit, second 250 units and this one is 155 units. In case you missed it, here are the 2 lessons I learned from my 250 unit deal I closed on last August: https://www.biggerpockets.com/forums/223/topics/217842-closed-on-250-apartments-in-houston-texas-yesterday-2-lessons-learned

Now, let's get to the lessons learned on this 155 unit. 

1. Go farther, faster by playing to your strengths. 

My first deal syndicated deal I did it all. Found the deal, did the underwriting, raised the money, did the due diligence, hired all team members and coordinated with them, closed, asset mgmt, etc.

Great experience but I didn't set the deal up for optimal success because, quite frankly, I'm not an expert at some of those things. For example, underwriting. I'm competent and know how to evaluate if a deal is good or not but I don't have thousands of hours under my belt strictly focused on underwriting deals. And, like most things, the more you do it the better you get. 

So, I learned on this deal that I needed to partner with someone who is phenomenal at underwriting large multifamily deals. I actually partnered up with him on my 250 units and this deal re-enforced the need to do it again because it allows me to do what I'm good at and him to do what he's good at. We're both able to do each other's job but wouldn't do as good of a job. 

This allows the biz to go farther, faster because I'm focused on my craft and he's focused on his craft. Yes, there's overlap as I triple check all underwriting and review in detail but it's better for someone with lots of experience to be the primary underwriter. 

THOUGHT FOR YOU: What's something you are really good at? And what's something you're not good at? Do more of the former and less of the latter because it's likely that you enjoy what you're good at and that's why you're good at it. And, vice versa. 

2. Do Something Consistently on a Large Distribution Channel 

We're in the sales and marketing business. Fix and flippers, wholesalers, multifamily syndicators, etc are all in the sales and marketing business. Perhaps passive buy-and-hold investors aren't...but I'm sure there's a creative way we could connect them to it. 

Since we're in this biz, we must have a consistent, daily presence in order to gain exposure and build credibility with our customers/clients/leads. 

Some large distribution channels (with some brainstorm ideas for them) are: 

  • BiggerPockets (official BP blogger, being an admin, posting, commenting, adding value, offering assistance, being insightful) 
  • Amazon.com (writing books and publishing them) 
  • iTunes (podcasting) 
  • YouTube (video blog, tips, interviews, , make real estate music videos...?! :)  
  • Facebook (create a community around an in-person event you host then open it up to larger audience)
  • Instagram (pics of renovations before/after) 
  • Twitter (proactively answering real estate related questions) 

In October of 2014, I choose to start a daily real estate podcast that connects into iTunes where there are over 50 million people listening to podcasts. 577 episodes later I haven't missed a day. Results? I've met a bunch of people and have raised over $800,000 from those connections alone. 

Whatever you do, do it DAILY. 

Consistently. 

And do it on a large distribution channel. 

So many people want the shiny object. The Super Secret Plan that will let them retire on the beach in Tahiti. I think that's ridiculous. We live in an instant-gratification culture and the truth is that to make a good living in real estate you just need to be consistent with strategic, proven actions. That's it. 

3. There is Major Power in Doing a Recorded Conference Call When Raising Money 

I already posted about this so I'll just link to that here: https://www.biggerpockets.com/forums/432/topics/26...

Awesome just awesome nothing else to say

Alex

@alex j. the address is 17601 Wayforest Drive. And we're putting in about $5,000 a unit to increase rents $75 per unit. Going in with bridge loan during renovations then will do a refi after year 2. At that point we'll get a new valuation and put long-term debt on it. Anticipated exit is Year 5. 

im familiar w the area near the airport, actually i always noticed those on greens and was curious who is living in those areas but i assume its just people who work at the airport or around there, it sounds like a lot of doors and a lot of work, excellent find!  what was the purchase price?  I am actively looking for more real estate opportunities in houston, i closed on my first duplex in this city though i have 12 units throughout los angeles.  i think theres going to be more opportunity in houston in the months to come if oil stays at these levels, some investors will just want out and that might bring some appealing opportunities as long as cash flow is there and its a buy hold strategy (ive never been a flipper)

Originally posted by @Joe Fairless :

@alex j. the address is 17601 Wayforest Drive. And we're putting in about $5,000 a unit to increase rents $75 per unit. Going in with bridge loan during renovations then will do a refi after year 2. At that point we'll get a new valuation and put long-term debt on it. Anticipated exit is Year 5. 

 Joe, mind telling me who the selling broker was?  This deal never hit my radar.  Granted most brokers know I'm looking inside the loop only but it's rare a deal that's 100+ units sneaks by  :)

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