All Forum Posts by: Brock Mogensen

In my opinion, if you need to partner with a KP, the best source for finding one will be from existing relationships or referrals.  Committing to a long term partnership with someone is a big deal so you want to make sure the person has the same goals as you.  To verify the KP you can look at certified PFS and real estate owned.  On your first deal you might have to give up a bigger equity stake to the KP but the experience and credibility you will gain from that first deal is totally worth it. 

Having the ability to build a commission into the deal is very beneficial.  It's a good strategy.  You will likely receive push back on trying to structure a deal like that but just have to get creative.  Some deals might die because of your proposed structure, just have to find the right deal where that structure works. 

That is always a risk with commercial loans, but a 10 year lock is a good amount of time. By year 10 you will have a big equity stake in the deal through principal paydown and likely appreciation. If interest rates were to skyrocket and the market dips in year 10, you will likely have enough equity in the deal to support a lower LTV. Bank typically mitigate risk by asking lower LTV. So even if they only leverage 60% of the deal, you will be in a good spot. Take the low interest rate today and lock it in for 10 years.

My strategy is generally to wait until the tenant moves out to make the upgrades and increase rents.  I agree that you have to be careful on your approach when asking big increases upon lease renewal.  As long as you simply spell out all of the upgrades you will be making in your letter to justify the rent increases and maybe even include some comps of what other properties are charging so they know you are not out of line.  If they refuse to pay the increase, they make the rehab easier on you.

Roll the proceeds into the next deal and continue to scale the size of the deals.  Define one or two markets to focus on and build relationships with brokers, bankers, and PM's in that market.  Attending local networking events is a good way to build those relationships. 

Interested in learning how to analyze a syndicated multifamily deal? For those looking to get into syndication or just learn more about analyzing real estate deals, this webinar will cover it all. Brock Mogensen will do a deep dive on strategies and tactics for analyzing deals.

Brock does all of the deal analysis for Smart Asset Capital and has analyzed billions of dollars worth of deals over the years. With where we are at in the market, now is a great time to learn the conservative analysis strategies you should be implementing.

This is an ONLINE event. Following the presentation will be time for questions.

Partnerships are a great way to scale into larger deals quicker. There are several ways to structure partnerships. You can do a JV model where you and another person (or a few other people) split the equity. There is also the route of syndication. The syndication model involves raising capital from LP investors. It is possible to scale into larger deals without years of experience. My first deal was a duplex then one year later closed on an 89 unit deal. Syndicating deals requires a lot of work and knowledge but is definitely doable.

Develop an understanding of the terminology, find a good underwriting model, and practice practice practice - you can look up deals on Loopnet and use those as a basis for practice. 

@Sam Westfall I like the conservative approach.  Setting aside some reserves at closing and making monthly reserve deposits will offset the risk of having a few down months.  If you are willing to house hack in a tertiary market, you can pick up a duplex for cheaper. 

Hands down the best approach is to start with a house hack. Take advantage of the FHA loan, find a duplex in an area you want to live in, and make it happen. $15K with an FHA loan should get you a pretty decent duplex.