Posted over 1 year ago

$110,000,000 in Invested Capital in 3.5 years

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At key milestones I like to share my progress with aspiring real estate entrepreneurs. Motivating others on what’s possible is important as I know I have been motivated by others sharing their story. There are many different paths in commercial real estate investing and getting into syndication.

In the spring of 2016, not too long ago, I started my syndication business. I partnered with experts and joined a syndication team that was focused on investing in multifamily apartments. A few months prior, I had joined a training program to learn more about how to buy my first apartment. After being in the program for about 3 months, it dawned on me that this was a more complex, time demanding and risky route for a beginner with little background or credibility in the commercial real estate space. How would lenders or investors react to my first deal? How can I find that first deal in a highly competitive landscape with larger companies that have teams of analysts?

I decided after 3 months of training that trying to go out and do it all on my own was not smart initially. Better to join experts, learn from them, offer whatever value I could without expecting compensation. I had 20 years of management experiences in the high-tech world and when I decided to leave my job I had about 12-18 months to pursue something with all my energy or so my wife said I had that much time, ha. I knew once I left, I was never going back. I had to find something, and I felt it was going to be investment and real estate related.  So there is one tip, burn the bridge.

My mentor took me up on that and I participated in a variety of roles including property tours, due diligence on comps, validation of key underwriting assumptions and investor relations activities. I enjoyed that latter part the best and learned that my most valued role for the operator is educating investors on opportunities that we had and bringing in capital from them to fund our deals.

I started out fast on my first deal raising one million dollars with 13 investors. I did a podcast interview on that experience, got a transcript of it and my mentor said, you now have about 80% of your first book. So, I did just that, turned that interview and 10 tips to raising capital into my first book, How I Raised One Million Dollars in Two Weeks.

I did not know it at the time that raising one million dollars is quite a feat. Nor did I think if you asked me, that I would be any good at this since I was doing what many would consider a marketing and sales role. I failed at my first job out of college selling whole life and disability policies for a large insurance company during a recession. It wasn’t my passion and I had such a bad experience, that I put blinders on for the next 20 years shying away from anything that might be a career along those lines.

I did like talking to people having bartended my way through college and I did love investing in general, so that ultimately overshadowed any reservations. I just had this innate passion for investing in real estate and discovered that few people had ever been exposed to these interesting ideas.  Education, sharing and answering questions, that was it.

Getting back to it, after my first deal, I never looked back. I snowballed that into more deals with the same operator, now totaling 20 large apartment communities and well over 6,000 units and have never raised less than one million for any deal. My biggest raise was $4,000,000 in 48 hours when the stars lined up just right. I’m an integral part of the sponsorship team and continue to work in a variety of support roles.

Over time, as I had a degree in financial planning, I recognized that as my investor network was growing, they would like to do more deals and diversify their holdings in not just MF apartments, but also self-storage and mobile home parks. My mantra with investors was more along the lines of investing is best done to reduce risk by diversifying three ways: by niche, by geography and by operator. This led to my second book more for investors called Riches in Niches. I established co-sponsor relationships with a few more operators to make this a reality for our investors.

I expanded my vetting process to include third party underwriting checks and added more customer experience tools such as an investor portal to see their investments with us. I continue to educate investors and have written over 50 blogs, several special reports, videos, along with the books. I speak at conferences across the U.S. as I share two stories, the investor story, how investing in these niches can really get you ahead of the game; and I talk with other aspiring entrepreneurs about how I got into the syndication business. I have developed and an active coaching program around that.

Our investor portal now includes over 30 syndication deals across these 3 niches and we recently surpassed over $100,000,000 in investor capital. Again, this all started a short 3 ½ years ago by simply surrounding myself with experts, joining them, finding a way I could contribute and learn without asking for compensation initially and now sharing my experiences with others. I do work harder than I ever have in my life but as you have heard many times before, I spend most of that time “in flow”, loving what I’m doing and hence, its not work. The extra time and energy coming from true passion and seeing a business thrive and grow keeps me going. My investor relationships and seeing the investments pay off, take care of current demands like college tuition, incredible family trips to more touching stories on people able to go part-time or quit their job to pursue their own dreams is very real and motivating to me.

Commercial real estate is a great place to be and can be an incredible business. You don’t have to be in a hurry, I just found the right people at the right time. I was getting burned out after 20 years in the corporate high tech world, was extremely interested and passionate about real estate investing and recognized where my strengths were.  I gained experience working in syndication, learned about what makes good markets and good deals, then educated investors about our opportunities.  What's your story?

Photo by Dino Reichmuth on Unsplash

Comments (1)

  1. Great article! Thank you @David Thompson! You are such an inspiration.