All Forum Posts by: Brock Mogensen

Quote from @Pierre Streat:

Quote from @Brock Mogensen:

Quote from @Ronald Rohde:

Quote from @Brock Mogensen:

Yes my favorite asset class right now is industrial. We are heavily targeting sale leaseback deals specifically. The NNN game can be great, but you do need to do heavy DD on the leases. And be conservative on modeling vacancy and lease up costs.

 Where are you buying? 

 Greater Milwaukee area

Hi Brock - are you buying industrial outdoor storage or some other niche industrial asset class?

 We do have some outdoor storage properties however more focused on traditional warehouse 20k-150k sq ft

General metrics we target on our syndication deals:

17%+ IRR

2X Equity Multiple on 5 year proforma / 3X Equity Multiple on 10 year proforma

Cash flow on day 1 with opportunity to get to 10% CoC to LP's by year 2-3

I would say these are pretty in line with market average targets for syndication deals.

You do want to be careful when you see targeted returns that are way above this benchmark. As generally it means the underwriting is not conservative. 

This sounds like a potential syndication/creative JV structure.

If you are going to doing all the work, you want to structure the deal so it is worth your time, meanwhile providing solid returns to the cash partners.

There are tons of ways you can structure these. I recommend familiarizing yourself with GP/LP structures and common fees as well as how to underwrite these deals correctly. 

I suggest starting with a deal on your own first then work into syndication.

My first deal was a duplex house-hack then the second deal was an 89-unit apartment syndication.

Building experience and lining up with the right partners is critical.

 Bring up a good point. If you're going to decide to invest in another state, make sure to set up your operational plan first. And I would say to stray away from C-Class areas on your first out of state rental.

The syndications that are going belly up right now are mostly people that overpaid, leverage bad debt, and unexperienced operators. We are in a period of lull right now, but starting to see market shift and opportunity on the horizon....in my opinion.

I have an extensive syndication underwriting model and resources I've built out. I'll send you a DM for access

Likely best to just take care of it yourself, trying to get that taken care of by the insurance company might be tough

NNN is a great investment vehicle. I would connect with a good commercial debt broker to see what options you have. Certain banks are going to require higher net worth and liquidity requirements than others. The NOI, lease, and strength of the tenant are the first thing the bank will look at but they will also want a strong guarantor on the note.

Assuming the GP promote kicks in after the 7% pref, then the remaining cashflow after the pref is met gets split based on the (LP/GP) structure defined.