REIT apartment

5 Replies

  1. I want to build a portfolio of apartment complexes. Possibly sell to a REIT someday, where/how do I start building that relationship?

REIT's are just one type of buyer. The typically buy brand new large A type properties at a low cap. Size is generally 200 units and up.

Do you own large class A apartments that are newer and 200 units or more at each complex??

If not REIT's will likely not even return your call. If you have nothing to offer them in their wheelhouse then generally they do not want to speak to you.

Hope it helps.   

@Joel Owens  this help Joel. Really appreciate the straight forward help. 

@Joel Owens  could I start my own REIT with my lower level properties?

A REIT is very expensive approaching mid 6 figures to set up or more.

You probably are interested in syndicating instead. Connect up with Ben Leybovich, Brian Burke, etc. and they can give you info on it. 

@Aaron Ross  Joel is right, setting up a REIT is expensive, and it's wasted effort without millions of backing (and I don't mean two million!). As a beginner, obtaining funding to back a REIT isn't going to happen, you'd never get past a broker-dealer's third party due diligence.

The way you want to do this is via private placements.  These are less regulated than a REIT structure (think: less expensive and more flexibility to set terms).  You fund each deal with investor $.  Each property is a separate partnership, so you do it one at a time. The problem: this is easier said than done. Finding investors is all about track record. If you don't have one, finding investors is very difficult. Experience is also important to lenders. So...just like anything else, there are no shortcuts. You have to work your way up, and it takes time, hard work, and a deliberate progression up the experience ladder.

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