New investor seeks info on syndication, fixer uppers, more

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

Lane, I am not looking to invest in Thailand. I am only here for work. I am actually looking back in the US, where I am more familiar with law/tax situation and have family. But I am looking around here- mostly Philippines.

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

@Todd, thanks for your thoughts. I have sent you a request to connect with some details.

Michael Le

Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

Hi @Phuong Tran, I agree with Todd that you should focus on just one or two niches until you feel extremely comfortable with them before you explore others. There are way too many shiny objects out there so be careful of losing focus.

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

Thanks, Michael and Todd, this the plan. I am asking for information, doing informational interviews, reading, researching in order to learn more and then narrow down. Hence this post!

James E.

Investor · Boston, MA · Member since 2014 · 232 posts · 165 votes

@Phuong Tran I just got back from 3 weeks exploring Bangkok, Chiang Mai, Pai, and of course the islands. I love Thailand and can't wait to go back!

The theme of responses so far is to apply a little more focus to your investing - and I would add a little focus to the question as well. I've found that if you ask too many questions in one topic, it doesn't encourage people to go too deep or be super thoughtful in their response. With that being said, here's my two ~~cents~~ baht on your questions.

1. Am interested in chatting with syndicators. I have noted recommended members already and will follow-up directly. But I don't know what I don't know, so am putting this note to the BP universe. Is there any shortcut to finding reputable syndicators other than working networks (which I don’t have quiet yet)? I am not yet an accredited investor, but will look into if needed.

The "shortcut" is to do a lot of reading and due diligence. If you aren't accredited it will be a little more difficult to get into a deal, but not impossible. I would suggest starting with the awesome + free blogs, podcasts, and resources put out there by:

Joe Fairless

@Jered Sturm

@Michael Blank

And take it from there.

2. As I am an uber-remote investor, I am researching turnkey operators. Eager to learn from members' experiences, get references (or stay-away warnings), get an idea of average ballpark.

I don't do any turnkey but I am still on the list-serve for Pinnacle Properties , and I think Mike was on the BP podcast at some point.

3. Though remote, I love fixer uppers. This is from someone who has never actually DONE one. Is there a service/class of professionals (ie. CDPEs???) specialized for this end of the market? I am not looking to flip (need cash flow), but rather to be able to carry out renovations myself. If I can't literally drive around a town to check out properties, do you have superstar agents willing to do this, even though their cut is quite small percentage wise?

Assuming that you're looking for distressed single family rentals here... you should probably just do a ton of research online to narrow down what city / neighborhood you want to look for deals in before you send agents all over town on wild goose chases. Not sure how often you come back to the US, but you could combo a trip out to your chosen market to start building relationships with agents, contractors, project / property managers etc. I recently wrote a blog highlighting an investor who does something similar (investing in Indianapolis from SF).

4. I am closing on 2 properties in Grand Rapids, MI this week. What are some of your favorite programs/software to track your RE investments? What wealth management programs have a nice dashboard to see what percentage of investments sits where, and then from there, allows once to go into more detail on performance? For example, a mix of Personal Capital and Quicken??

I haven't seen anything that really mixes personal finance with real estate very well. I use a combo of mint, quickbooks online, and offline spreadsheets. Buildium / Rent Manager / Appfolio are the three big hitters that come up frequently if you're looking for more of a property management system, but assuming you will have a PM you will probably get an online dashboard into whatever system they are using.

5. Because I am taking time off from work- do not have a track record of self employment- I am learning that despite perfect credit and healthy assets, I would have problems qualifying for a loan on my own. Any advice other than getting a a guarantor/co-signer? I don't have any income streams now, and don't plan to for a few more months.

My honest suggestion is to keep your job while you get started. You can do what you're looking to do while working full time. Probably not what you wanted to hear, but you're going to make some mistakes when you first start off, and having a steady source of income can help keep you motivated to keep going. Alternatively, maybe find something on a part time or reduced capacity basis if you really need some breathing room. You're doing all of this remotely / passively, so I'm not sure why you need to fully quit your job to get the ball rolling and see if you even like the realities investing in real estate.

If you absolutely must quit, my suggestion would be to draw up a business plan showing what you are looking to do and then float it around to relatives / friends who do have W2 income and see if someone will co-sign with you (you may need to throw them some money, but would be worth it). If you invest passively through someone else's deal, this obviously would be less of an issue.

Tim Moore

Investor · Grand Rapids, MI · Member since 2015 · 9 posts · 5 votes

Hello Phuong,

Syndication has really intrigued me, I like the concept of spreading the investment among more investors to mitigate risk. Although I don't have the experience managing a syndication; I have looked into some resources that may help you. Value Hound Academy has been a wealth of information. I've learned much from their webinars & videos; Craig Haskell offers a mentorship also, I believe he is the founder....hope this helps.

https://www.valuehoundacademy.com

Paul Warner

Developer · Red River Gorge · Member since 2016 · 11 posts · 13 votes

Hello All!

I would like to jump in on this thread as I have actually put together a syndication deal recently that we are now about to close on the first week of April. I purchased a property in Fountain Square in Indianapolis that was built in 1999 on a huge double lot, which is a very rare find in this neighborhood, and raised the capital for the rehab through syndication. I put up the money to purchase the property but needed $200,000 in capital for the rehab part of the project. I was able to pool together 7 different investors who put in $20,000-$30,000 each that will generate a profit based upon the percentage of the rehab dollars contributed to the project.

My role in the process is to work with the architect to finalize the design of the property, coordinate with the contractors for quotes and completion of the project, picking out materials, colors, fixtures, cabinets, etc., and then selling the property. I give weekly updates with photos and the status of the project as to keep the investors up to date and ensure them that I am not spending their money on Amazon. Trusting in what you are investing in or who you are investing with is important with a syndication. Each investor was given a promissory note from the company that was set up solely for this project. The promissory note promises to pay off the investors contribution at a minimum and given a projected return based upon an estimated net return from the sale of the property. It has worked out well and the investors on this particular property are going to see around a 20% return on their investment. Now that is a really good return in this market for sure and would expect to see more like a 10-12% return on your money now.

More about the actual deal. The return on this project was so good as I was able to find a hidden gem off market from another agent in my former office that was going to be listing the property before I had ran into him. The numbers here are becoming tighter and good deals like that are becoming harder to find. I purchased this particular property for $74,000. The rehab cost was $200,000 which included completely stripping the existing structure down inside out, changing the roof line, and adding 700SF to back of the existing property. Essentially this project was almost like a new build. The sale price $390,000. So a really good return. See photos and links below for more info on this project.

Before Photos - https://www.dropbox.com/sh/f3w8hna8tfzw31a/AACAFnK...

After Photos - https://www.dropbox.com/sh/rcrr7ejc22kkmh3/AAB1WAS...

I am looking to put together more projects like this now and am in need of investors who are interested in jumping on board for something like this. I am looking to build from ground up or purchase a property that needs complete rehab or demo and rebuild in areas of downtown Indianapolis where we are seeing an enormous amount of redevelopment or new development. There is a huge demand for downtown or near downtown living in Indianapolis in areas like Fountain Square. Please feel free to reach out to me if you have any questions about syndication or if you are interested in learning more about becoming part of a project.

Thanks,

Paul

Larry Fried

Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes

Hi @Phuong Tran . Remote investing of the type you are talking about about I think is best done as passively as possible with trusted providers. I have written a BP article about Three Key Routes for Passive Real Estate Investing that you might find helpful.

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

@Larry Fried, thank you! I did come across your post. Great to hear from author. I had questions about the option #2 you laid out on private lending. Interesting. I am looking to park/spend down sums that might make this feasible. Who are some of the big players in this arena? WIll send you a PM re dogoodinvesting with reflections totally off RE. Thanks again for post, and most importantly, for trying to do good.

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

@Tim Moore- thank you! And I see your are from Grand Rapids. As of this week, I own a property on Lexington Ave a block from GVSU and another in Muskegin. I may reach out to get your thoughts on some local matters. Appreciate the reading recs. Where has your research taken you, or are you still in research phase? Did you make leap and invest with any syndicators? Any early lessons?

OP

Chapel Hill, NC · Member since 2018 · 19 posts · 7 votes

@Paul Warner- Interesting- IN. I will most certainly take you up on your offer to be a resource. With every day I am more humbled by how little I know, how much there is to learn, as well as relieved to know how many other travelers there are on this road. The sign posts you folks are leaving make this traveller's sojourn less lonely, more lit and more enjoyable. Thank you! And as for investment interest, sure, I am open. I am moving significant chunks out of my brokerage account in order to be more diversified. I am not in a rush, but do have liquidity.

Paul Warner

Developer · Red River Gorge · Member since 2016 · 11 posts · 13 votes

@Phuong Tran - I am glad to help with any questions you may have. Indianapolis is a great market for buy and holds, but becoming very difficult to find good deals for flips. Although they are still out there you just have to do a lot more work to find them. Even if you are buying to hold you can add value or end up with a better all-in cost if you purchase something that needs work as opposed to purchasing something that is already move-in ready. That way you are generating some equity. Of course if you are getting financing the property has to be livable in order to pass financing. So, if you are planning on using financing that is something to keep in mind. As far as getting approved for a loan it may be difficult if you do not have an income stream. Lenders look at debt to income ratios along with the credit score. They also want to see a history of employment, and if you are self employed they want to see income from being self employed for a year or two.

As far as finding properties, getting them rehabbed, and then sold or rented that is something that I help all my clients with. Once we find a property and purchase it I always make sure that the contractors and property managers are doing what they promise to do by checking on the progress of the rehab weekly or more if needed. I then report back to the client with photos and notes on the progress. Of course I do charge a fee for doing so but is not too much at all. The fee depends on the scope of work or how involved I am but well worth it. I have seen too many times where people that live out of state being taken advantage of since they are not here to oversee or check on a property. A third party representative really helps with this.

I hope this all helps. As far as syndication goes I am hoping to find the right properties to put together another project soon. I will keep you up to date and see if it is something that you might be interested in.

Thanks,

Paul