All Forum Posts by: Brock Mogensen

$550K leveraged at 75% LTV will get you roughly a $2M deal. I'd suggest targeting a B-class apartment building in the 20-30 unit size range. That size will allow for good economies of scale with a PM company too. An alternative would be to find a few more partners that also have a similar investment amount and go after a 100+ unit apartment deal.

Love it!  So many great reasons to be invested in real estate.  And syndication is a great avenue for the high earner that doesn't have time to be a landlord. 

I've seen some ebook's out there on this subject but can't recall where.  I agree that vetting syndications can be tough for someone who isn't familiar with all of the terminology.  A big part of the DD on a syndication has to do with vetting the operator. As other's have mentioned, maybe you can explain it to them which would be a great way to build rapport. 

Costar will be the best place for that info.  Most brokers have access to it, you could always ask one of them to pull that info for you.  Comps aren't something I would say is necessary for a sample deal package though.

I've found syndication to be a great way to scale quicker and turn REI into a full time thing. Creating partnerships to buy deals will allow you to go after larger deals. Larger deals generally provide more opportunity to outsource PM tasks.

Definitely work with an attorney to create all of the legal documents.  Every deal is different and will require different language.  The three docs you will likely need are Subscription Agreement, Operating Agreement, and Private Placement Memorandum.  Those three documents often total close to 100 pages.  Hiring an attorney will cost you anywhere from $5K-$15K but 100% necessary to syndicate a deal. 

Learning everything I could about underwriting.  Then partnering with more experienced investors. Bringing my underwriting skill set to the table was a huge value add. 

As others have pointed out, engaging an attorney in the process will help.  For 506B (which allows for non-accredited) you must have an existing relationship with the person.  It doesn't have to be your best friend or family member but you must be able to validate several forms of contact with the person in the past prior to pitching them your deal. 

Using 1031 funds to invest in a syndication can be complicated. In short, to do it you have to create a TIC (tenant in common) structure. Which requires the operator/syndicator to alter their operating agreement documents. Also, the timing will have to line up perfectly. It is doable, but likely will have to be with an operator you have a good relationship with that is willing to do the extra steps.

@Account Closed I was using a rough number of 10% to demonstrate the thought process.  That being said, a 10% Average Cash on Cash return is a reasonable assumption.  Not sure how many syndications you have actually seen and participated in..