40 Unit Development in Tampa... Is it a good idea to pursue?

Tampa, Florida
General Real Estate Investing
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40 Unit Development in Tampa... Is it a good idea to pursue?

Nick Kurtz
Investor · Los Angeles, CA · Member since 2019 · 32 posts · 9 votes

I have a new associate who has been in REI for 20+ years, and recently sold 300 units. He has syndicated a few deals and is creating a new one to build 40 units in Tampa FL. I see benefits but I'm trying to understand the full context of building this from ground up. I'm looking at putting money into it and recommending friends to put money into it so any advice is appreciated. The property has been drawn up and is permits are ready so it's just a matter of finalizing the cash for it.

I know Tampa area has been booming so it generally seems like a good idea. Here are two photos of what he gave me as a snapshot. I took out the LLC and contact info since I didn't ask if I could share it.

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
2y

The main thing I have learned about syndications is that anything can look good in a pitch deck. You should be doing your most due diligence on the operator, the team, and the track record. 40 units in an opportunity zone could be a big win, but how many times have they done opportunity zone builds and have they worked with the city of Tampa before? This is where I would start.

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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
    2y
    Quote from @Nick Kurtz:

    I have a new associate who has been in REI for 20+ years, and recently sold 300 units. He has syndicated a few deals and is creating a new one to build 40 units in Tampa FL. I see benefits but I'm trying to understand the full context of building this from ground up. I'm looking at putting money into it and recommending friends to put money into it so any advice is appreciated. The property has been drawn up and is permits are ready so it's just a matter of finalizing the cash for it.

    I know Tampa area has been booming so it generally seems like a good idea. Here are two photos of what he gave me as a snapshot. I took out the LLC and contact info since I didn't ask if I could share it.

    Hi Nick, I would love to hear more about this new build and the partners you are working on it with. I’m interested in GUC eventually in  a few years. This is in my backyard and would like to follow along!
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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y

    The main thing I have learned about syndications is that anything can look good in a pitch deck. You should be doing your most due diligence on the operator, the team, and the track record. 40 units in an opportunity zone could be a big win, but how many times have they done opportunity zone builds and have they worked with the city of Tampa before? This is where I would start.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    1Reply
  • Kenneth Bell
    Developer · Charlotte, NC · Member since 2014 · 208 posts · 101 votes
    2y

    @Nick Kurtz

    Can you send me details for this project as well. I may be interested

    1Reply
  • Nick Kurtz
    OP
    Investor · Los Angeles, CA · Member since 2019 · 32 posts · 9 votes
    2y
    Quote from @Kenneth Bell:

    @Nick Kurtz

    Can you send me details for this project as well. I may be interested


    That's all the details I have right now. What else would you want to know?

    He is looking for $1mm investments at least so I that's why I'm trying to flesh it out to see if I should bring friends into it.

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  • Nick Kurtz
    OP
    Investor · Los Angeles, CA · Member since 2019 · 32 posts · 9 votes
    2y
    Quote from @Jonathan Greene:

    The main thing I have learned about syndications is that anything can look good in a pitch deck. You should be doing your most due diligence on the operator, the team, and the track record. 40 units in an opportunity zone could be a big win, but how many times have they done opportunity zone builds and have they worked with the city of Tampa before? This is where I would start.


     Thanks

    1Reply
  • Nick Kurtz
    OP
    Investor · Los Angeles, CA · Member since 2019 · 32 posts · 9 votes
    2y
    Quote from @Devin Peterson:
    Quote from @Nick Kurtz:

    I have a new associate who has been in REI for 20+ years, and recently sold 300 units. He has syndicated a few deals and is creating a new one to build 40 units in Tampa FL. I see benefits but I'm trying to understand the full context of building this from ground up. I'm looking at putting money into it and recommending friends to put money into it so any advice is appreciated. The property has been drawn up and is permits are ready so it's just a matter of finalizing the cash for it.

    I know Tampa area has been booming so it generally seems like a good idea. Here are two photos of what he gave me as a snapshot. I took out the LLC and contact info since I didn't ask if I could share it.

    Hi Nick, I would love to hear more about this new build and the partners you are working on it with. I’m interested in GUC eventually in  a few years. This is in my backyard and would like to follow along!

     Sure, let's connect!

    0Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Nick Kurtz:

    I have a new associate who has been in REI for 20+ years, and recently sold 300 units. He has syndicated a few deals and is creating a new one to build 40 units in Tampa FL. I see benefits but I'm trying to understand the full context of building this from ground up. I'm looking at putting money into it and recommending friends to put money into it so any advice is appreciated. The property has been drawn up and is permits are ready so it's just a matter of finalizing the cash for it.

    I know Tampa area has been booming so it generally seems like a good idea. Here are two photos of what he gave me as a snapshot. I took out the LLC and contact info since I didn't ask if I could share it.


     too small. we stay in the single family, triplex, and then 150+ units and above 10 million in construction values to get to instittuuioal level capital and income. you need to underwrite 3 million dollar checks. he's probably raising from friends and families on his first deal but I wouldn't touch a deal with my own money without non recourse debt or a clear development plan and exit. I think 50-150 units is no mans land and we stick to institutional level sized deals. his underwriting is too simple. the unit mixes are off we only build studios and 1 beds for fast absorption, the deal is also under parked without a parking study. anyone who uses "roughly" in their analysis isn't sophisticated enough. we underwrite rent growth, asset growth, and a million other assumptions this wouldn't pass any people I know who invest in deals. get with a More experienced operator and read more sophisticated underwriting. 400k per door new construction is crazy. how much is the land? 

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  • Nick Kurtz
    OP
    Investor · Los Angeles, CA · Member since 2019 · 32 posts · 9 votes
    2y
    Quote from @Robert Ellis:
    Quote from @Nick Kurtz:

    I have a new associate who has been in REI for 20+ years, and recently sold 300 units. He has syndicated a few deals and is creating a new one to build 40 units in Tampa FL. I see benefits but I'm trying to understand the full context of building this from ground up. I'm looking at putting money into it and recommending friends to put money into it so any advice is appreciated. The property has been drawn up and is permits are ready so it's just a matter of finalizing the cash for it.

    I know Tampa area has been booming so it generally seems like a good idea. Here are two photos of what he gave me as a snapshot. I took out the LLC and contact info since I didn't ask if I could share it.


     too small. we stay in the single family, triplex, and then 150+ units and above 10 million in construction values to get to instittuuioal level capital and income. you need to underwrite 3 million dollar checks. he's probably raising from friends and families on his first deal but I wouldn't touch a deal with my own money without non recourse debt or a clear development plan and exit. I think 50-150 units is no mans land and we stick to institutional level sized deals. his underwriting is too simple. the unit mixes are off we only build studios and 1 beds for fast absorption, the deal is also under parked without a parking study. anyone who uses "roughly" in their analysis isn't sophisticated enough. we underwrite rent growth, asset growth, and a million other assumptions this wouldn't pass any people I know who invest in deals. get with a More experienced operator and read more sophisticated underwriting. 400k per door new construction is crazy. how much is the land? 


     Appreciate your input! Makes me think more about it. 400k does seem high when you put it like that. I’ll have to check on land cost. 

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