Westwood, MA · Member since 2018 · 15 posts · 2 votes
I'm an out-of-state "newbie" investor looking at a specific apartment investment opportunity (passive LP) in Houston. I'm interesting in speaking to someone who knows that market well. What can I offer? In addition to gratitude, I'd consider a consulting engagement to help me evaluate this deal and help me prepare for an April 5th day trip. I need to make sure I use the time as efficiently as possible.
Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
8y
Review their extended team. Who they are using for tax accounting, property management, general contractor if any, mortgage broker, due diligence company, cost seg, insurance company, and etc.
Review the additional fees\costs, if any, and determine if they are out of the norm depending on the experience of the sponsorship team, investment strategy, and asset. e.g. Asset Mgmt fee, Acquisition fee, and etc.
Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
8y
Houston is big and one sub-market may be vastly different from another. Look at the demographics and crime stats for a specific area where that property is located. Does the median income support the rents? Is the crime high or low?
Your biggest risk is with the sponsors thought. How long have they been in this business? How have they survived 2008-2009 crisis? What have they learned from it?
If they started after the crisis they probably have a great record but it is mostly a function of the rising market rather then than their unique skills.
Westwood, MA · Member since 2018 · 15 posts · 2 votes
8y
Thanks @Nick B. Helpful suggestions. I haven’t checked the crime data but will do so tonight.
As for the sponsors, it’s a mixed group in terms of experience. It gives me a bit more confidence that the largest investor (>50% of the equity) is very experienced in the space and has been active over many cycles. The operational team is also very seasoned by background but I’ll meet the key managers in person on my visit.
Thanks again for the advice.
Westwood, MA · Member since 2018 · 15 posts · 2 votes
8y
Thank you @Tom R.. Only some minor damage to the roof from the storm. No flood damage as I've been told. I'll verify via due diligence. Appreciate the suggestion.
Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
8y
Review their extended team. Who they are using for tax accounting, property management, general contractor if any, mortgage broker, due diligence company, cost seg, insurance company, and etc.
Review the additional fees\costs, if any, and determine if they are out of the norm depending on the experience of the sponsorship team, investment strategy, and asset. e.g. Asset Mgmt fee, Acquisition fee, and etc.
Investor · Houston, TX · Member since 2013 · 471 posts · 267 votes
8y
@David Gerber I own about $6M of real estate in Houston in addition to managing property and doing contracting. If you have specific questions I can give you a rundown of the market.
Brooklyn, NY · Member since 2016 · 8 posts · 2 votes
8y
Hi David,
Newbie to BP and Real Estate in general here. Just curious- what made you decide to go down the route of a limited partnership? Pros vs cons against doing it on your own? Best of luck with your investment journey!
Westwood, MA · Member since 2018 · 15 posts · 2 votes
8y
Hi @Account Closed - Great question. Thanks for asking. The main reason I decided not to do it myself, for now at least, is my reluctance to leave my full-time job. That's not to say I couldn't try to do something closer to me (in Massachusetts), but I don't have a lot of time to commit to the investment.
When I consider what I bring to the table, it's access to capital (not deals or experience). Therefore I've decided to focus my early investments (and education) on larger projects as an LP. Over time and with a lot of hard work, I'll build my experience base and hopefully even find a few deals.
At this stage, my focus is a reasonable financial return and a greater return in terms of education.
Hope that helps. I'm interested in your thoughts too, since we're at a similar stage.