All Forum Posts by: Bruce Petersen

Late to this thread and it appears to have died anyway but I'm willing to contribute if it ever comes back to life.

Hitting on what @Brian Garrett said, I only look above 200 units in the B and C class.

Just giving you my opinion of what I am hearing from friends that own in SA and go the 3rd party route.

I'm certain you are wonderful, I just know that there are a lot that aren't.  I doubt anyone took my comment to mean that they were out of luck as they all suck.

I own in SA but have my own management company. 

Haven't heard of one that others have used and are happy with them, sorry.

I do it on every property.

Pro is you get tons of added write-off $$ on a declining basis.  First year is always a big one.

Con is recapture on sale.

We don't accept retirement funds so no issue with that. Even if IRA investors see no benefit everyone else does and it's pretty big. If you are a buy and hold investor you will often get profitable enough to outstrip the depreciation expense either way.

Every one of your investors will likely have a different personal tax situation so I wouldn't put too much weight into a specific class of investor.  The vast majority will benefit so we always do it and for any investors that are RE Pros they can apply an unlimited amount of loss against their 1040's.

I like nothing older than 80's construction for the most part.

Main thing for me and almost more than age are the major systems; boilers, plumbing material, wiring material, lead paint or asbestos.

Buying 80's or newer usually  keeps me new enough to not have to worry about most of the major systems though they still do have galvanized and boilers some times.

@Jonathan Ruiz, yes I worked with someone experienced in my local area.

What @Mike Dymski said is key, you have to be self aware.  You will have challenges on every deal especially your first; are you mentally prepared to get kicked in the teeth and get back up?

RE is no different than any other business you would start, don't fall into the trap of thinking this is"RE" and not a real business just like opening a restaurant etc...  Approach this the same way knowing that things will go sideways from time to time.  Do you have the intestinal fortitude to stomach these times?

Either way, Good Luck!!

My first deal was a 48 unit, never did single family at all myself.  

Having said that, it's definitely not the easiest route but I'm very glad I did it that way.  I did have someone walking me through the process from beginning to end including the sale a little over 2 years later.

If you have someone to lean on I would always "go big".  The quicker you can develop scale the easier it gets if you do it all yourself (management).  My 300 unit is easier than that 48 unit; I have more and better quality staff to handle all of the day-to-day and I get to just lead the team.

Hey @Ian McDonald, not trying to come off harshly but my question is very basic, are you really ready for this?

"Do you calculate the return for the investor based on the cash flow after expenses per month? For instance we bring in $10,000 cash flow in January so the investor (paid first) would pocket $1150 per month and $11500 annually while my partner and I take the remaining."

That is such a basic question it kinda scares me for you?  Will you hire a management company?  If not, do you have any experience with this type and/or size investment?  Do you fully understand what you need to bring to the table totally for this deal in the form of equity?  Just a few questions to start.

I'm probably way off base with my view of this, just please make sure you are educated especially since you are taking investor money.  You screw up you first deal with this person and there likely won't be a second.

Syndicating is great but not for the faint of heart.

Take @Joseph Gozlan's advice, get Gene's book and start getting educated.  He also holds 2 or 3 day, what I would call
boot camps, covering syndications. This class is one of the best things you can do for your education and it's also a great way to meet others looking to syndicate.