Assistance to get the deal done

7 Replies

I am an international investor and find that Commercial real estate is very attractive. However, after doing some research, I found the purchasing procedure is very complicated. For example, when performing due diligence, it needs to have title check, physical/ financial/ legal inspections, appraisal, paperwork, constant communications with the seller and the list goes forever. So, I am wondering if there is any help available to get all these done, like if hiring a broker or agent, can he helps? Or is there any companies out there that can address all these problems?

Yes, it is complicated if it's not your day job.  There is a lot to pay attention to and one can easily be misled or go in the wrong direction.  It sounds like you would benefit from working with a syndicator to get through this process and still find value in investments that have good return on your money.  

If you do go through it yourself, if you have a good broker, they will help you and will have a team of people that will also help out.  Ultimately it is up to you to understand what it is you're investing in and you'll want to make sure you get all the different due diligence items understood and evaluated.  If you're the buyer, you don't pay a broker, the listing agent does - but in the commercial space it is sometimes the listing broker that is double ending the deal and you don't have that direct relationship and representation.

If you are interested in syndication, feel free to message me. 

I agree with @Justin Hoggatt , if you partner with a syndicator as LP you don't need to worry about these things as the GP partner will do all the work for you. This is one of the benefits of a LP partnership with a Syndicator, you get to rely on all of their experience and knowledge. You just need to find a good syndication operator to work with.

@Fok Ming

We are JV / rehabbers / Syndicates. We can explore if our synergies meet for mutual benefit. I can send you my portfolio by email. We are NJ but can work in other areas as well.

@Fok Ming Yes, there are a lot of roles to be played in commercial real estate. To be effective, you must analyze which role you want to play and which others you are not so good at. Build the team around to support your efforts in those weaker areas. 

Here are some example roles on many commercial real estate deals :

  1. Lawyer/Title Company
  2. Real Estate Broker/Agent
  3. Accountant
  4. Mortgage Broker
  5. Insurance Broker
  6. Handymen
  7. Property Inspector
  8. Construction Contractors
  9. Property Management
  10. Coach/Mentor

The list above is not exhaustive and the bigger the property type, the more additional team players would or could be involved such as a Securities Attorney, RUBS company, Cost Segregation Consultant, Renters Insurance company, Website Specialist / Photographer, etc.

Focusing specifically on real estate syndication, here are some common General Partner roles :

Deal Acquisitions

Financing

Underwriting Analyst

Capital Raising

Investor Relations

Asset Management

Marketing

Understanding first if you want to play a role or even have the time to actively manage the deal in some of the above are important. Investing passively as a limited partner in such opportunities is a significant role as well and can align with your interests or goals. 

Investing passively or actively is always a choice of personal preference dependent on your time, capital, acceptable risk/responsibility, experience, location and desired passions/purpose.

Most real estate agents who deal with multi-unit properties are with handling all the details and you should not worry. I purchased many multi-unit properties, homes and don't see any difference when doing all the necessary tasks. When I sell my homes the home inspectors do inspections so thorough I am amazed that they do what they do. I had one inspector in Idaho who went around the entire outside of the house, counted and documented the location of about 150 nails that had a portion of the head of the nail that had a portion that was exposed to the weather. Now, almost every home inspector is flying drones over the roof and they inspect every tile for cracks. 

I learned my lesson the hard way when I purchased an 11-unit property and let the sellers agent represent both the buyer and seller.. I had already purchased several apartment buildings and this 11-unit turned out to be a disaster after the escrow was closed. The seller's agent talked me into representing both the seller and myself and that was the biggest mistake I ever made in regards to having my own representation to watch my back.