Ambitions to Invest / Syndicate

Ambitions to Invest / Syndicate

Member since 2020 · 22 posts · 10 votes

Hello BP Patrons,

This is my first post on BiggerPockets; which might lead one to think I lack the motivation to be a better businessman.  I swear to you that's not the case.  Although I might be the last person to arrive at the party, I'm bringing the goods.  By "the goods," I mean THE PASSION.

I'm 34 and I love real estate.  I love looking at financials and performing due diligence.  I changed majors twice in college in pursuit of something I enjoyed.  Finally, I landed a professor in real estate finance that got me all fired up.  We were studying cash flow analysis and the time value of money and it just clicked.  I said, "This is me.  So me."

I got my real estate license immediately that semester and took an internship with a local Century 21 commercial division.  This was 2009 and I don't think I need to explain to this crowd what the state of affairs was. Deals for "the new guy" were few and far between.  I stubbornly ignored the naysayers and just tried to learn.

After about a year I had a stroke of luck and snagged a nice 10 property (500 unit) Project-Based Section 8 (HAP) portfolio listing from one of the brokers with the firm.  He was the GP of the properties and I think he was throwing me a bone.  I had worked really hard to build relationships during that first year.

This was my opportunity.  I cold-called every day for months just asking people if they were interested in Section 8.  Meanwhile, I had to learn all about Section 8, so I studied - a lot.  Those of you that know Section 8 know that it is a unique niche due to the complexities of compliance with the government.  Not hard, just different.  Low and behold, I was able to find a buyer for most of the portfolio about a year and a half into learning the lingo.

Fast forward 10 years. The part of the portfolio that didn't sell, I now property-manage along with some other Class-C affordable housing I've picked up along the way.  I built my entire real estate career on cold-calling on multifamily properties to sell, as a broker, to buyers that I have grown close with all over the country.  I've done quite a few transactions in North Carolina, South Carolina, and Georgia.

I've reached a point now where I don't want to get left behind in this world and want to become an investor/syndicator who's not afraid to put skin in the game; at least initially.  I am confident in my ability and want to use my experiences as a broker and property manager to raise capital within my network to buy and sell multifamily properties.

All that said, I'm here for recommendations on books, podcasts, papers, and case studies that will help me to become a multifamily property syndicator.  I'm currently studying Reg D and other SEC regs.  I know multifamily pretty well as a manager and a broker but I desire to take the leap of faith to investor/syndicator.  

Any motivation or resources is greatly appreciated.

Sincerely,

Trevor W.

Broker/Manager

Columbia, South Carolina

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Rental Property Investor · Ann Arbor, MI · Member since 2019 · 71 posts · 67 votes
6y

Be careful when you say 'skin in the game' regarding a syndication. Maybe I am just very cautious but when I hear those words in a syndication presentation my 'careful' radar immediately goes up. If a sponsor is putting his own money in the deal, great. But if he puts it in the deal only to window dress or legitimize his otherwise mediocre deal, that makes me very suspicious. If they have skin in the game ensure there is language in the PPM that keeps that 'skin in the game' there until a refi occurs, or that the PPM does not contain language to allow the sponsor to pull his money out as soon as the deal closes before LPs can. If and when I see a maneuver like that, I move on. 

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  • Member since 2020 · 22 posts · 10 votes
    6y

    @Justin Craver

    I joined the Facebook group you recommended as well.  Thanks again. 

  • Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    6y

    Learning the process of syndicating is one thing.  Learning to interact with investors is another.  Still another is learning to build systems and processes to target the correct personas for the investors you're hoping to find.

    As your career as a syndicator and deal-maker progresses you should:

    1.  Find more capital than deals.  Great syndicators have far more access to capital than they have to quality deal flow

    2.  Your cost of equity capital should decrease over time

    3.  Your control of your projects should go up over time

    Partnering with someone who knows how this progression occurs will be the best investment you can make.  The normal progression is:

    -Your money

    -Friends/family money

    -Clunky and ill-formed JVs that arguably violate securities laws

    -One-off syndications investor-biased

    -One-off syndications fairly balanced

    -One off syndications sponsor-biased

    -Fund constructs

    As you traverse this process it gets harder to raise capital, but your costs go down, your control goes up, and the value of your limited time increases.  Wealth is the control of systems and assets and is built a brick at a time unless you're one of the ones fortunate enough to inherit enough to start out sliding into home.  

  • Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Trevor Woodlief:

    Update:  I just purchased The Fairless/Hicks book called "Best Ever Apartment Syndication Book."  It says it will be here on Wednesday.  I can't wait to dive in.  Thanks to everyone who made recommendations.  I've got Joe Fairless' podcasts playing non-stop.  I multitask well so I intend to pool every resource I can over the next few months whilst learning.

    I finished reading "Apartment Syndication Made Easy" by Vinney Chopra yesterday.  I enjoyed it and took notes on his '5-plate spinning' model.  There was a lot of redundancy for me because I've been in the multifamily management business for a while but reading expert ideas always gives me new angles and momentum.

    I've been using various cash flow analysis templates for years but will venture to create my own excel spreadsheets and due diligence checklists based on the collaboration of everything I am learning from my studies. 

    Thanks again, to everyone.  Any other additional recommendations are greatly appreciated.  

    Does anyone know a good syndication attorney in the Southeast I could connect with?

    Joe has written a fantastic book and has lot's of great resources. Sounds like you have some operational competency so don't get caught up in analysis paralysis and get out there and pull the trigger when you finish fine tuning your education. The key to the business is relationships and raising the capital. You need to have a plan and a system to acquire new investors and to re-deploy the capital form existing investors continue to grow and scale.

  • Member since 2020 · 22 posts · 10 votes
    6y

    @Greg Dickerson 

    Thank you for your input, Greg.  I appreciate your encouragement and suggestions. 

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