Creative Ways to Grow My Buy and Hold Portfolio?

5 Replies

I currently personally own and manage 15 investment condos. I have purchased each unit 1 at a time using a portfolio lender and line of credit funds for the 20% down. These properties have been in central NJ for about 150K. Each property typically has a cash flow of 300 a month or more. Outside of continuing the process of using my own 30-40K down @ 5-6% are there any other alternatives to acquiring the properties without the outlay of cash on my own? What would a syndication company look for in terms of return?

If you want to go the syndication route I'd think you would look at multi family. Everything I read about and videos I watch talk about apartments. Finding a deal (not easy), bringing investors money, add value, and exit strategy. Sometimes the building is purchased with a balloon payment due at year 5 and investors get a return of 8-12% at that time. I'm not an expert in multi family but curious. 

@Paul Camuto & @Jaron Walling   As you both seem to be Sponsor 'want-to-be' (no offense intended) read The Best Ever Apartment Syndication Book by Fairless & Hicks.  This book does a great job of giving the nuts and bolts of the process.  There are a several other books that you may also want to digest. 

The problem is "Who would give you money with out a track record?"  So consider a Mentor, Partner, or a lot of trusting relatives.  A Mentor/Partner can help avoid costly mistakes and bring investors from their database.  

Syndications are securities and selling them is under the purview of the SEC.  To avoid licensing, you will be operating within Reg D 506(b) or (c) exemptions. In (b), the investor must have a preexisting relationship with a sponsor AND be sophisticated or accredited; even the foolish relatives.  In (c), the investor must be accredited, but you may advertise.  

The next problem is "Who would sell you a place?"  As syndication is expensive, I assume you are going after 60+ units, not 10 units.  Folks that are selling apartments want to deal with folks they know can close the deal. Their brokers make money at sale, not at almost closed, so they may not give a beginner the time of day.  And in this environment, the sellers expect Hard Money, quite a bit of it.

It's not impossible, not at all rocket science.  But you need to know what you are doing.  There are plenty of things that go off the rails and have to be corrected as the deals progress.

My personal path was to meet a Mentor (in 2010).  Personally, I like having a mentor that has presentations and that I can ask questions. I learned, networked, & invested.  To date 14 deals have gone full cycle.


Charles LeMaire