CLOSED on a 98-unit TODAY!

247 Replies

Originally posted by @Alex J. :

@Ben Leybovich

First off congratulations on the deal very impressive 

But I have to say This peaks my interest ..... I always thought of you as the guy who has said all the smart money has already made the big moves back in 2013 or whenever it was in your original few podcasts 

Why are you going so big this late in the cycle esp with mf which many have said is very overheated... also if there is a previous post on this I apologize for redundancy I have not read it

Maybe it’s an add value force equity play or something?  I personally don’t do large mf but I am very interested and will possibly be working with a lot more capital this time next year so I’d love to hear your thoughts 

Alex - good question.

I tend to learn in real time, and since 2013 I've seen people making money hand over fist. I mean, there I was saying - you are buying at 8 cap - what? Are you stupid?! And then, they weren't so stupid...

So I started asking myself questions, and doing research. Doing my best to get into the heads of smart folks.

I've come to several realizations:

What we experienced in 2010 - 2013 was brilliant, but also a once in a lifetime opportunity. That's likely to never, ever, ever happen again. Just based on this, if you are waiting for those conditions to occur again, you'll not be a buyer ever in your lifetime.

Additionally, the economics today are more favorable in so many ways for multifamily than ever before, from cost of new construction, to home-ownership levels, to mortgage financing, to attitudes, to pure and simple demographics.

I don't look at real estate in the same way I did in 2012. I've evolved. Am I wrong? Could be, but I don't think so, and I believe my desire to buy large-scale assets is rational.




Originally posted by @Ben Leybovich :
Originally posted by @Alex J.:

@Ben Leybovich

First off congratulations on the deal very impressive 

But I have to say This peaks my interest ..... I always thought of you as the guy who has said all the smart money has already made the big moves back in 2013 or whenever it was in your original few podcasts 

Why are you going so big this late in the cycle esp with mf which many have said is very overheated... also if there is a previous post on this I apologize for redundancy I have not read it

Maybe it’s an add value force equity play or something?  I personally don’t do large mf but I am very interested and will possibly be working with a lot more capital this time next year so I’d love to hear your thoughts 

Alex - good question.

I tend to learn in real time, and since 2013 I've seen people making money hand over fist. I mean, there I was saying - you are buying at 8 cap - what? Are you stupid?! And then, they weren't so stupid...

So I started asking myself questions, and doing research. Doing my best to get into the heads of smart folks.

I've come to several realizations:

What we experienced in 2010 - 2013 was brilliant, but also a once in a lifetime opportunity. That's likely to never, ever, ever happen again. Just based on this, if you are waiting for those conditions to occur again, you'll not be a buyer ever in your lifetime.

Additionally, the economics today are more favorable in so many ways for multifamily than ever before, from cost of new construction, to home-ownership levels, to mortgage financing, to attitudes, to pure and simple demographics.

I don't look at real estate in the same way I did in 2012. I've evolved. Am I wrong? Could be, but I don't think so, and I believe my desire to buy large-scale assets is rational.

That’s awesome!  Wishing you nothing but success 

I look forward to hopefully connecting in the future 

Sounds like you did a great job and even better is that you are happy with the outcome. Congrats! Keep up the good work. Real Estate - It's not just a job. It's an adventure :-))

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@Ben Leybovich and @Sam Grooms that is so awesome that you guys closed on this multi-unit here in Arizona. I am looking forward to you sharing the details of your story about it at our meet up in Mesa on September 19th. https://www.biggerpockets.com/forums/521/topics/604730-investor-meet-up-in-mesa-arizona

Great job guys!

@Account Closed who said the investors are getting crumbs? Did you see the PPM for this? 

As someone who might in the future be either a sponsor or investor in someone else' deal; I saw nothing to deter me from investing with them. Actually the opposite is true. 

the deal is highly skewed in the syndicators favor.?

Were we reading the same thread. What I saw was a lot of risk for a potential large gain. While the investors get a much safer preferred return.

Moderator Note: this was in response to a troll whose account has been closed. That is why you do not see the post I was replying to.

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Account closed,

I have two options here. One - to take the high road. And two - to tell you that you are an idiot. It's very hard not to walk through door number two under the circumstances...

"What i read was a owner gave away a lot. Sam n Ben jumped on it. Little risk, they know what they are doing. They sound so giddy." 

I am not sure what you mean by this. We paid lower than a 5 Cap on actuals. How does this qualify as owner giving away a lot. The owner gave away nothing, and @Sam Grooms and I will need to work like hell to get the rents up. Should we get paid for it?

"Investing is all about capital gains. This preferred return is misdirection to make investors think they come first. Cash flow is all well and good but the delicious juicy meat is the cap gains." 

In addition to the pref, the investors get 70% of the capital gains on the back end. And, by the way, if we end up light on the pref, then it gets caught up on the back end, by which diluting the general partner. 

"So are you eager to join in on the next Sam and Ben deal?" You should be :)

"I'm just saying this kind of convo should be kept among operators. No need to tell the sheep whats up." 

These people are very sophisticated investors, who've achieved financial success in their lives, hence their ability and desire to invest in a syndication such as this. Your innuendo is highly disrespectful to them. 

Now - get your trolling ars off of this forum.

Originally posted by @Daniel Guerra :

@Ben Leybovich

Congratulations!  Arizona is an awesome place to have an investment property.  The population and jobs in Arizona are booming!

I wish i lived there or knew somebody I can trust to invest down there.

Daniel, both Sam and I are in Arizona. He has been here for 12 years, and I moved my family 2 years ago.  Absolutely loving it!

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Originally posted by @Kyle Schlosser :
@Ben Leybovich @Sam Grooms Congrats. Will look forward to the occasional progress pic. Thank you for sharing all of the information that you do.

 Thank you, Kyle!

Originally posted by @Account Closed :

I hope im not offending anyone.   Syndication is a legitimate tool. I just notice a lot of people(investors) go for the shiny object not actually doing their due diligence.   Oh Ben Leybovitch the guy on a podcast-  where do i send the check?

Why do you think SEC or whatever makes it so tough for operators to operate.

If i had star power id do the same thing .  Only thing  i would do different is not to congratulate oneself on an open forum.

Accredited doesnt necessarily mean intelligent.  It does mean if they lose money they  likely wont be complaining to the SEC or whomever.

 I haven't read any "congratulating oneself" anywhere. Taking a deal down like this (and executing on the reposition) takes a lot of work, it isn't easy. Where is your profile pic? So far, you have no credibility with your blank picture and your post.

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Originally posted by @Account Closed :

You need to understand investing concepts. Arent you the guy hooked on syndication investing................good luck to ya.

If you are happy with your preferred return----no problemo. 

Maybe this will help.  Syndications is just another form of OPM.   If you want to be on the wrong side of OPM then im with you.

Another example is Wall Street Hedge funds.  

You do understand that the 8% pref is the baseline, not the ceiling, right? This is equity, not debt, and investors get 70% of that equity. 

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