Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
My name is Tj and currently based in Tampa Fl. Been investing full time in this market for the past 6 years with our focus being rehabbing and wholesaling. It's a great business but by far no means a picnic. But now as of 2017 looking for ways to passively invest and know for sure multifamily apartment investing is the way to go and the quickest way to financial freedom. It only makes sense to own 100 units than 100 SFR. Our group is looking to take advantage of emerging markets with C class properties in B or A areas. Or B properties in A areas. These areas must be experiencing lots of population growth as well as job growth with the goal of being right in the middle of the "path of progress". As we are taking on this new venture of building wealth for our family. What other key indicators you need to identify when looking to invest in an emerging market. Any advice or thoughts would be helpful. Thanks
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
Hi TJ,
I think we traded emails today but will be chatting w/you next week. Here is something that may be of value that I posted in a blog on vetting sponsors of MF. We like to look at 3 things:
1) The market - strong pop and job growth > natl averages (historically and forecasted). Top growth submarkets w/n the city
2) The deal - value add; conservative underwriting
Rental Property Investor · Austin, TX · Member since 2017 · 254 posts · 265 votes
9y
You're right, it's absolutely better than SF. SF will provide with a good life but MF has the ability to create life changing wealth.
MF is hard in it's own right as a syndicator but if you are looking to invest passively then the extent of your work is really about finding a syndicator you like and trust and then invest with them as soon as you like one of the deals they present you with.
Not all deals will align with you families goals so make sure you know their exit strategy and time line; is it a value-add deal or being bought solely for cash flow?
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
Hi TJ,
I think we traded emails today but will be chatting w/you next week. Here is something that may be of value that I posted in a blog on vetting sponsors of MF. We like to look at 3 things:
1) The market - strong pop and job growth > natl averages (historically and forecasted). Top growth submarkets w/n the city
2) The deal - value add; conservative underwriting
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
9y
@Bruce Petersen Hey thanks for the insight. But my goal is to be in control as much as I can. Im the kind of guy that loves being in the trenches to make things happen. I have joy and happiness when I'm actually progressing and moving towards my goals. Although the goal is to have passive income coming in I take the pleasure of doing all the work upfront to identify opportunities that will yield appreciation, cash flow and profit.
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
9y
@Nathan Click I have a really good idea want my goals are and the returns I'm looking to achieve for my investors. I'm looking for a 10% or greater cash on cash return with at least an 8 cap over the life of the entire investment. But just so we are clear. My goals and aspirations is to become the syndicator myself. Not looking to passively invest with other syndicators. I have investors that are already interested and intrigued with the idea of investing with me as the syndicator. Wanted to network with other syndicators to see more how are they structuring terms with investors so forth and so on. And maybe if I can get a little knowledge to insure I'm investing in the right emerging market
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
9y
@David Thompson Yes I appreciate you getting back with me. Definitely looking forward to our talk next week. Its on the schedule. I will take a look at the blog post in the meantime
Investor · Glen Burnie, MD · Member since 2015 · 15 posts · 3 votes
9y
You will need the help of an attorney and account the question to ask to be able to do the creative structuring of your partnership with a plan of action a organized plan of action and aware of the pitfalls and opportunities just doing this with family will not be enough you will need professionals who know the laws of syndication
Rental Property Investor · Ashland, OR · Member since 2016 · 32 posts · 13 votes
9y
Tj Hines look for a firm who specializes in Securities law specifically real estate syndication. They'll get you everything you need to put together a legal PPM agreement. Approximately $15k to structure one. This identifies you as the asset manager and creates a passive investor relationship specific to the deal you are presenting.
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
9y
@Dahl Brandon As I've been educating myself and more have a PPM in place is definitely the most safest way to go protect myself moving forward making sure that everything is disclosed. Not looking to get on the bad side with the SEC. Thanks for the reassurance.
Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes
9y
@Tj Hines, Hello from Tampa. This setting up to be a Syndicator sounds similar to starting up a Family Mutual Fund which is limited to a small group of Investors. Also, with similar needs to a Value Investing in Stocks method. And you want the best of both worlds with Monthly Cash Flow and Long Term Appreciation in a growing Economy and the Path of Progress. That's where some of the BP members have said that if you want Passive Income with Real Estate, they just Invest in REIT's. This is where I would be if I wanted to trade Real Estate ETF's. I have to do a study in that for later. For now, I sell off my Rentals and just trade the Futures on my laptop. You are considering that for the Long Term, the Millenials are not going to be able to have the JOB's that produce enough Income in order to Buy SFH's. So, the Future says that "units" or Apartments and Rentals are where the Demand will be. In Tampa, this is where I heard about the doctors and lawyers who made successful practices, ended up. They had a lot of Money and wanted Passive Income, but, they didn't want to learn how to Invest in Mutual Funds and they would buy 100 and 200 Units. Then, they would get ripped off by the professional Rental Managers who were usually family groups of Grifters. These "Managers" move into the complex and have control of collecting Rents and doing Repairs and after a few years they leave the place in a mess. The other caveat is if you are considering the stage of the Real Estate Cycle? Do you think we may be at an eight year High from the 2008 Crash?
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
9y
@Michael Haynes who in their right mind would invest in mutual funds that have high performing fees and fail to be the market over any sustained period of time. If I was to invest in a volatile market such as the stock market I would invest my money in low cost index funds this way I own a piece of the whole market. At the point I can care less whether the market is up or down. The average cost of owning a mutual fund is 3.17%. Did you know that? I invest 100k today the mutual fund manager takes his $3170 right off the top. Crazy thing is he doesn't have much control either. Immediately I'm in the hole. Did you know those guys WIN all the time whether you win or lose. HELLO. There's no control there bud. Sounds like you may belong in another forum. Thanks but no thanks for your advice. I see your from Tampa. Never heard of me? Mrflipperhouse. Google my friend. Everyone here in this forum knows the way to control your destiny is to control your finances. And what better way than multifamily. And yes I do believe I can have cake and eat it too if its an emerging market and I time just right to get in and get out within a 3-5 year period. I would NEVER and repeat NEVER give my money to some hot shot mutual fund manager selling me every other day and the latest and greatest thing to hit the market. Miss me with that. I'm only in this forum to fellowship with like minded people who are doing what Im on track looking to do. Education is key my friend.
Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes
9y
@Tj Hines, Hello from Tampa. I think you got it wrong. I was saying that my impression of the way the big guys on BP Search and qualify for a Deal and yours is the biggest type of Investment in 100 or more Units, sounds just like Value Investing with the Stock Market. The other thing that I have noticed is that a few of the guys said that they eliminated all the headaches with owning and managing the properties and just Invest in REIT's. ETF's are much better vehicles than Mutual Funds because you can Option them and go Long and Short. Mutual Funds can only Buy Long and you are limited to Selling at the End of the Day. So, you have to manage them yourself for your Stop Out when things go negative. I worked on Oil Tankers 30 years ago and made $100K with Mutual Funds while I was shipping around the world, in order to Buy my Rentals in S. Tampa. Most of the Newbies I read about on BP are thinking that RE Investing is the way they can make the money to buy more Rentals or give up their JOB to just do Flips etc. Been there and done that. Now, I am Selling in order to free myself up to just trade daytrade Futures on my laptop. Much easier way to make Money. The only Control you have with your Money is being able to Sell out when things go against you. Real Estate Investing has this problem...it is not Liquid enough to get out quickly enough when the next 2008 Economic Collapse occurs. That is a big problem with the Cycle at the top. Retail Investors in anything, Buy at the Top and Sell at the Bottom and lose Money because they can't see the position of the Cycle they are in. We are in a Mature Market in Tampa with over building again, at a max. I can see how someone as experienced as you can continue to want to expand. That is what Business is all about. Did you see today the news that Carraba's, Outback and Bonefish Grill are closing 40 restaurants?
There is a famous chef in Seattle who owns 32 restaurants. When Seattle mandated the $15 minimum wage, he had to close half his restaurants. He says the remaining ones will have to see if the customers will want to pay for $35 steaks or he will close more. I was talking with my old tenant today, who owes me a fortune. He works for the roofer in Palma Ceia who is also a City Board member. My tenant came back and begged me to help him one more time. He needed a place to crash and go back to work for this big roofer. He worked for a month at $11 an hour where he was getting $18 two years ago. Then, he got a raise to $13 and the owner told him that when Florida raises the Minimum Wage, don't expect to get another raise. That is the problem here in a Right to Work State. My brother is a Union Electrician, working manager in California, at $55 an hour plus all benefits and he is ready to retire. Here in Tampa, Union scale wage is $13 an hour. Can you see how raising the Minimum Wage is going to disrupt a whole series of things involved with running a Business? Your looking to buy 100 Units and your numbers work today with wages at this level. What happens next year if that changes drasticaly? My neighbor's wife works for a company here in Tampa that buys and sells Hospitals. This last year they had to close two Hospitals at a time when 10,000 Baby Boomers are retiring each day. Builders have to build until they can't sell anymore and then they go belly up, just like Donald Trump. Syndicators probably have to do the same. It's in their blood.
Rental Property Investor · Dallas, TX · Member since 2015 · 501 posts · 504 votes
9y
You also want to be in a landlord-friendly state. All other things being equal, would you rather own property in an area where you can evict someone in a month if they fail to pay the rent, or an area where it takes 6-9 months?