All Forum Posts by: Brock Mogensen

Like others have pointed out, investing in syndications could be a good option. That will allow you to be truly passive.  If you decide to buy on your own deals and use a property manager, you will still have to be involved in some of the operations.  Where syndications there is nothing you have to do. If we assume a 10% Cash on Cash return, which is pretty common, you would have to invest $2,000,000 in order to receive $200,000/year in cash flow. 

There are definitely lots of differences between single raise syndications and a fund. If you have access to lots of deals and your investor base trusts you enough to invest without much info on the deal on the front end - a fund could be a good option.  Single raise syndications in my experience have been easier to raise because you are able to provide all of the information on the deal.  The fund model is a great way to scale..from what I hear though.  

Totally agree that partnerships are the best way to scale.  Scaling on your own is doable but usually takes longer.  Vetting your potential partners is key, like you pointed out.  Make sure long term goals align because you will be working with this person/persons for a LONG time. 

My journey of getting into syndication started with learning how to underwrite deals.  My approach was learn one piece of the process then partner with other people that were strong in the pieces I lacked.  Coming from an analytical background underwriting made the most sense for me.  Spent 6 months learning everything I could about underwriting syndicated deals, partnered with two other more experienced investors, 6 months later we close on an 89 unit apartment building.  Partnerships are huge in syndication and partnering with people that are strong where you are weak are the best partnerships..IMO

Definitely ask for the T12 and Rent Roll before putting the deal under contract. 99% of the time they will provide it. Usually when the seller says they won't release the T12 and Rent Roll info until you get the deal under contract..means there is a big red flag on the deal and they want to lock you in before revealing the red flag. Although contingencies usually can get you out of the deal, best to review the numbers before contract phase.

There are a lot of gurus that make it sound like investing with no money down is easy. Although it is doable, it's tough to make it happen. Seller financing is likely your easiest route to get into a deal with no money down. Syndication can provide the opportunity to get into a deal with no money down. But to syndicate a deal you generally need some prior or experience or partners that have the experience because you will be going after larger deals. The most feasible option is finding a duplex to house hack using an FHA loan. 3.5% down you can get into a decent duplex for under $10K.

Milwaukee is a great cashflow market. You aren't going to see as great of appreciation as some of the other "hot markets" but there are some opportunities to find 10% CoC deals here.

Many syndicators will actually require you to invest as a group if you are combining funds to hit the minimum investment amount. From the GP side, the reasoning for this is it creates less admin work by having fewer investor members plus saving on K1 prep. Conclusion is yes I recommend you create an LLC with all of the members and invest through that entity.

I definitely see it as a benefit.  Even if you end up using third party property management in the future, the knowledge you will gain from working in the industry, will help you forever.  You will learn the in's and out's of leasing, collections, unit flips, bookkeeping, etc. All critical components of a successful cash-flowing property. 

It's worth discussing your individual scenario with your CPA but in most syndications in doesn't matter how you register your investment, in regard to liability. Taking an LP position protects you from any of the liability (generally). The investors we have in our syndications are about 50-50 in investing under their personal name and investing using an LLC. If you have the ability to self direct retirement funds into a syndication that is always a good method to use too.