Help with joining syndicated deal as investor

Buying & Selling Real Estate
10yFollow

Help with joining syndicated deal as investor

Matt Ward
Peachtree City, GA · Member since 2016 · 44 posts · 5 votes

Hi guys (this is a repost just to make sure I put in right forum),

My business has done well and I am looking to exit in the neighborhood of 7 figures.

I have been very actively seeking out real estate, running deals, trying to build teams etc and have learned a good deal about how the game works. At the same time, I am no expert and would prefer to spend time on other ventures I am more passionate and skilled with.

A friend referred me to a syndicate fund he invested with in MHP. I wanted some info and advice on the fund, my position and due diligence.

The opportunity is for investment in a large MHP fund with 100 million max offering. The managers have run several successful funds to date, data and numbers all supplied and are leaders in MHP space.

The investment is aimed at 5-10 years with sale of properties as final goal. The preferred returns are 10% a year for life of investment. There are additional cashflow and subsequent sale expected as well.

What are thoughts on this as an investor? Curious from other passive investors on opportunity and what returns you see elsewhere.

Cheers and thanks,

Matt

0Reply
17 views

Most Popular Reply

Account Closed
Investor · Oldsmar, FL · Member since 2014 · 140 posts · 152 votes
10y

Matt,

Frank and Dave's funds do well and I've never run into an unhappy investor who's done business with them. Our company also does pretty much the same exact thing but on a property specific level right now. One thing you will find dealing with an experienced syndicator is that the good ones have access to a lot more money than they currently have deals they would ethically put their money partners in. We have that problem and a few others I know have that same problem. If Frank & Dave are taking in passive investors right now, you should probably jump in. They are very competent educators and owners. The returns we are giving in the world of mobile home parks to our passive investors are unheard of in any other niche of real estate. It's just a fact of life. If you can get past the unfavorable stigma of the asset class, you'll realize 8-10%pref and 20% IRR with any number of syndicators in our space.

1Reply
See this reply in the discussion

6 Replies

Jump to latestLatest
  • Account Closed
    Investor · Oldsmar, FL · Member since 2014 · 140 posts · 152 votes
    10y

    Matt,

    Frank and Dave's funds do well and I've never run into an unhappy investor who's done business with them. Our company also does pretty much the same exact thing but on a property specific level right now. One thing you will find dealing with an experienced syndicator is that the good ones have access to a lot more money than they currently have deals they would ethically put their money partners in. We have that problem and a few others I know have that same problem. If Frank & Dave are taking in passive investors right now, you should probably jump in. They are very competent educators and owners. The returns we are giving in the world of mobile home parks to our passive investors are unheard of in any other niche of real estate. It's just a fact of life. If you can get past the unfavorable stigma of the asset class, you'll realize 8-10%pref and 20% IRR with any number of syndicators in our space.

    1Reply
  • Matt Ward
    OP
    Peachtree City, GA · Member since 2016 · 44 posts · 5 votes
    10y

    Thanks Charlie. Really appreciate your help.

    What do you mean on a property specific level?

    0Reply
  • Account Closed
    Investor · Oldsmar, FL · Member since 2014 · 140 posts · 152 votes
    10y

    Frank and Dave raise a lot of equity to go out and buy multiple parks from one fund.  We raise money one deal at a time.  From an investor and syndicator standpoint, there are pros and cons with each.

    0Reply
  • Matt Ward
    OP
    Peachtree City, GA · Member since 2016 · 44 posts · 5 votes
    10y

    What are the pros and cons of each? Obviously you are biased but you are also quite knowledgeable and we might like to work together in the future. Also this is a perfect platform for you share your deals and attract investment I would guess :)

    0Reply
  • Account Closed
    Investor · Oldsmar, FL · Member since 2014 · 140 posts · 152 votes
    10y

    I personally think the pros for a fund outweigh the pros for property specific.  We just haven't positioned our company to do a fund yet.  Yet being the key word.  A fund invests in multiple properties where the property specific only handles one at a time.  

    For us, a fund would allow us to be more nimble and take advantage of more/different types of opportunity.  It would also allow us more flexibility to shape the risk & returns of the overall portfolio.  

    For you, a fund would provide less risk.  You aren't exposed to just one property or one market.  Your returns are also a little more predictable too.

    A pro for the property specific for you is that you can underwrite the individual deal yourself.  You have a little more control so long as you know how to underwrite it and have complete faith in the syndicator to execute the business plan.

    Personally, I like doing a fund more than property specific.  It offers a better service for the client but it requires that the client have a lot more faith in what we are doing.  For us, we just haven't done the complete leg-work and education process to start operating a fund.  We've got a very full plate this summer with acquisitions so hopefully we'll find the breathing room to change that scenario in the future.  We are also small enough that doing property specific syndications hasn't become too cumbersome yet.  The money for any good syndicator is floating around in the market place.  I work 60+ hours per week to find a home for it and most of it is still homeless.

    1Reply
  • Matt Ward
    OP
    Peachtree City, GA · Member since 2016 · 44 posts · 5 votes
    10y

    Thanks Charlie. Well said.

    Good luck on building and growing that. I am guessing you will do very well for yourself.

    Would you recommend investing as an individual or as an entity in a fund?

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free