Been playing the buy and hold SF play for some time now. Flipped a few properties, have a small SF rental portfolio and fairly happy with my investments so far. Recently sold a property and a business which returned some decent $$. I'm trying to invest this multi-family income generating properties. Looked at passive investor opportunities and concluded that it does not suit my style. I'm more of a build something and let someone manage it and move on to the next one.
Been searching the internet/loopnet/zillow etc,. and I don't think I'm ready to take on multi-million $$ properties yet because this involves partnerships high investments. One of the ideas that I'm evaluating is to acquire a small piece of property within the city limits near a train station of local towns such as Farmers Branch, Carrollton, Lewisville, Plano, Euless etc,. Need to be able to build either duplex/fourplex or small apartment building. I'm looking for a GC that can help evaluate costs before I acquire a property. I'm also looking for a commercial realtor who can help locating such property.
@Pundari Pothini , I know that you said passive opportunities do not suit your style (I'm assuming you mean syndications), but have you explored the option of joining a syndicator with a more active role?
Depending on how much capital you are willing to bring to the table, but if you're willing to bring a large chunk of the required equity, some Sponsors would be willing to negotiate terms for a GP spot and a bigger opportunity to learn from and lean on their expertise. You won't be able to land this type of partnership with all Sponsors, but some are open to it.
Just a thought as a way to get involved. Best of luck!
Do u have experience in rehabbing or in construction?
I assisted several investors in buying multi family units & Commercial lots, office, retail space in DFW area .
PM me & we can discuss further
Thanks @Michael Bishop . It is interesting you mention Syndication, my only discomfort in getting involved a syndication is just the amount of risk when you have multiple investors involved. But I get that there is huge value in leaning on some of the expertise that they bring to the table. I'm certainly open to look into such opportunity. Please PM me if you are aware of such syndicates in the dallas area, I'll definitely speak with them.
Thanks @Vic Reddy . Yes I've rehabbed a few homes in the past. I've done this as a hobby with some GCs involved getting the work done, I'm certainly have no desire in playing the GC role at all. I'll PM you shortly.
Hey @Pundari Pothini , good questions: The risk is not with the amount of investors but within the assumptions and quality of the syndicator's deal underwriting. I will second @Michael Bishop comment that there's always room for participating in the general partnership equity stack when finding or bringing capital to the deal. There is so much more leverage in pooling other people's resources and expertise.
More over, a good syndication will provide each and every private investor, key-principle and co-sponsors all the necessary information on all vital team members who are part of making the deal work. So you will have ample time to double check on the quality and expertise of everyone involved. That's part of the advantage of passive investing: the syndicator does all the work before anything comes to your table as a viable investment. Last but not least: it's relationship building journey in which investor and syndicator get to know eachother and educate on all aspects of the deal. All there is left to do is homework and pick and choose. The syndicator should guide youin that process.
Good luck and happy CRE hunting ;-)
Remember that syndication is simply obtaining investment capital from many sources (investors) instead of just you/the owner. This is how nearly all big deals are executed. When you are an investor in these deals, you are either a limited partner that has no direct influence on the execution of the deal (i.e. just providing capital to make the deal work) or a general partner that is responsible for executing the deal.
The risk in executing these deals and making a profit are laid upon the general partners. While investors have the risk of losing their investment, it is similar to choosing any other type of alternative investment where your own due diligence in the deal and GPs will guide you through your risk of investment, as suggested by @Ken Breeze .
As a GP, you are responsible to make the deal work and generate a profit. This requires a deep knowledge of execution, but is very rewarding and exciting. Since lenders have the risk that you default on the loan and property managers have their business at risk, they won't typically work with someone that doesn't have some level of experience or is working with another experienced partner. These are some of the reasons why many first time large multifamily investors start with a passive investment to learn how the deals are executed, then move into a more active role.