Joint Venture (More Units) vs Solo (Less Units) advice

[Account Closed]

Hi all!

I was initially thinking of buying upto 20 Multifamily units with financing for long term retirement buy and hold goal. Now I am wondering if the better idea would be to buy 100 Multifamily units with 3-4 joint venture partners for buy and hold. Can someone give me advice on the pros and cons of each and which one you would recommend I pursue? Plan is not to sell. Buy and hold. 

Also anyone have recommendations for experienced Joint Venture partners? 

[Taylor L.]

Originally posted by @Account Closed:

Thanks for your response Erik!

To answer your first question - Currently my portfolio includes:

1 SFH turnkey in Memphis TN

1 SFH turnkey in Dallas TX

2 Opportunity Zone New Construction Duplexes in Fort Worth, TX

Regarding your second question - I am a Neurosurgeon in NJ with very little time to manage properties myself and have always gone down the property management route. I always look to hire it out but I keep myself educated to exactly what is going on at all times.

Third - I am surrounded my many people with capital but my goal if I was going down the JV route is to partner with someone far more knowledgeable and experienced than me/my friends. I would need my partners to be more hands on and I would be learning from them.

Hope that gives some clarity! Looking forward to advice.

If I were in your shoes, I would seek out and build relationships with syndicators and find ones with experience, who you like, and who invest in areas you are interested in. 

Then you provide risk capital for their syndications. Typically that can include upfront costs like Earnest Money Deposits, legal costs, due diligence costs, and other expenses they can incur. In return, you get a piece of the deal because you're taking on a risk. You do not manage the properties or the property manager, and you can earn a bigger return than a typical Limited Partner because you're taking on a more involved role and additional risk.

Options to mitigate some of the risk in this strategy are only partnering with experienced operators and learning to underwrite and review deals yourself (or hiring an underwriter).