Different Multi-Family strategies?

Question

Hi,

New to the multifamily scene. I want to know more about the individual benefits and drawbacks of the different multifamily strategies (syndication, going solo on a deal, etc..) Drop all your knowledge here! Thanks.

Ken P. · Answer

@Lukas

@Lukas James I suggest you spend some time reading on this forum.  There is a ton of information on every conceivable multifamily topic, and many recommended books on various MF investing strategies  If, after reading in depth on a particular topic, you have some specific questions, then ask away.

Sarah Waterman · Answer

@Lukas James

Whatever you do make sure that you get a quote for an engineer in based Casagrande should study on your property.

In order to get maximum tax savings and needs to be an engineered base study not a passive study.

You will significantly reduce your liability and accelerate your tax savings from 27.5 years down to 15 and 15.

Any "you get should be completely free if the numbers don't work you don't go through with the study.

here to help!!

Bjorn Ahlblad · Answer

@Lukas James my wife and I have always had onesies and twosies but a few years ago we bought a 12 unit building and we are so glad we did. We self manage and having all your tenants under one roof is so much better. We still have the duplexes but if we could find another 12-15 unit the duplexes would go.

Paul Shannon · Answer

Very broad question, but you mentioned syndication or going at it alone, so addressing that....simply put, if you can hang on to your equity in a good deal, do it.  When you JV, you start to split equity.  When you syndicate as a general partner, you start charging some fees, but you give up the majority of the equity.  There are pros and cons, but the more investors, the more diluted your position.  That can be good for diversification and risk mitigation, but bad for returns.

Syndicating allows you to scale and take down deals you would never be able to due to capital constraints in your personal funds.

JV is a happy medium.  Maybe you have 25% equity between 4 partners, can gain some scale, tax benefits, forced appreciation, etc, of multifamily, but could take down a 20-unit or so that you couldn't alone.

If you can buy an apartment buy yourself and its a good deal, you have total control, 100% upside, etc.  With that of course comes concentrated risk, to be fair in assessing the downside.

It depends on the deal, your risk tolerance, and your goals.

Justin Goodin · Answer

As others have said, there is an abundance of information out there that explains the many benefits of a syndication. You are on the best website to go read information about it :)

As far as going alone, not everyone has the capacity to do so. Congrats if you can go buy an apartment complex by yourself haha

You will be severely limited in your ability to take down deals if you plan to work alone. Multifamily syndication is a team sport!

Jeffrey Donis · Answer

Syndication is great. It is different depending on whether or not you are looking to be a general partner or a passive investor. General partners are able to acquire wealth by building portfolios of larger commercial properties and receive a percentage of the cash flow for helping find, purchase, and operate the property. Passive investors have the benefit of receiving cash flow without involvement in the day today management of the asset because the value they bring is the capital needed to acquire the property.

Different Multi-Family strategies?

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