Kingston, NY · Member since 2017 · 252 posts · 138 votes
I’m a physician who came across a possible 45 unit deal. Other than that I’m in the middle of my first flip and I completely lack experience. I have no plans to self manage. I’m not going to attempt anything other than being the owner. Is it prudent to just jump in? I would have to get an experienced partner on board as well as find the majority of my funding some other way.
What do you think?
Investor / Syndicator · Austin, TX · Member since 2015 · 366 posts · 220 votes
7y
If you've done the diligence and feel comfortable with the market, have a capable apartment management company that you trust and has a track record, and have stress tested it, then yes. Just remember its a commercial deal at this level. It's a different beast. Here are some questions you can ask yourself, although it's meant for syndications. I think it applies to you. I hope it's helpful. The Best Questions to Ask Syndicators When Evaluating Apartment Deals
I'd lean toward investing in a syndicated deal to gain some experience. There are lots of moving parts, and investing in one deal will show you a lot about how the syndicator evaluates deals, due diligence, offering memorandums, legal documentation, deal structure, etc. You're a busy guy, so unless you have an experienced partner who can walk you through those things, I'd pass. If you decide to invest in a syndication as an LP, my recommendation would be to reach out to @Joe Fairless at Ashcroft Capital.
Rental Property Investor · Chapel Hill, NC · Member since 2017 · 144 posts · 89 votes
7y
Sounds like an interesting opportunity. Finding a 45 unit multifamily at least around here is a rarity. Assuming financing is not an issue, you are happy with the area's projected growth in population and economy, you have run the numbers and are satisfied with projected returns, and you have a good handle on the scope of deferred maintenance (and since you are hands off, would advise against buying a property that needs a lot of work), I would be encouraged and invest the time in a thorough tour of the property. A good local property management firm will be essential for the success of your investment since you plan to be hands off. Interview property managers before making an offer or during due diligence; if you connect with a property manager that may give you confidence to move forward - and you will learn a lot about market conditions like rents, cost of renovations, etc. Look at vacancy levels and market rents of this property's competition. If you are happy with all this, I say go for it! Lots of tax advantages for you on top of everything else. But just know this won't be a truly passive investment; you'll want to stay on top of issues at the property to maximize your returns, minimize tenant drama and ensure maintenance issues are promptly addressed. If you are on BP you must like real estate on some level so you may find the variety of issues fun.
Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
7y
I agree it doesn't sound like you are ready. Real estate is strewn with the bodies of capital rich but education/time constrained doctors & dentists. I would say to take your time and get educated. And then also decide what you're looking for in this investment and how much time and energy you want to spend in it. Considering you already have a good job, it probably makes more sense to have someone else manage this. And think about taking that a step further and have someone else manage the entire process via something like syndication.
Rental Property Investor · Fort Wayne, IN · Member since 2016 · 258 posts · 177 votes
7y
@James Canoy You already have got a lot of insight by experienced people above but I am going to give my two cents.There are several ways to deal with this situation and make money.
1. You can sell this deal to someone and either get paid upfront or get a piece of the deal.
2.You can partner with someone and do a joint venture.
3 You can just do a syndication yourself and have a management company run the show .