All Forum Posts by: Charles LeMaire

Here is a post that includes a lot of good books for MF:

https://www.biggerpockets.com/forums/432/topics/60...

Alina mentioned 4 good choices, this is about #2.  A lot of BP members will say that a paid mentor is a waste of money.   I used one and I have found it to be beneficial.  

I met Brad Sumrok in 2010 and have been in his network since it began.  Membership in his network offers training and access to sponsor and passives.  The official count for 2018 is 57 deals.  

Let me be clear, the group concentrates on B & C properties with 75+ doors. There have been a few A properties and there have been a few smaller deals.  Almost all deals are syndications using Reg D 506(b) and an occasional (c).  You must be sophisticated (knowledgeable) or Accredited (rich).  Virtually all deals use professional property  management.  The deal minimums are typically $50K or $75K.  If you love small (5-20) properties, we are not likely the best choice for you. 

If you have access to sponsors, to deals, to money, and knowledgeable experienced experts, you do NOT need a paid mentor.  But if you are missing any of these, a paid mentor may help and I feel "Brad Sumrok University" (my name) would bootstrap your journey to success.  

Yesterday, at one of our events, a new deal sponsor, who was previously a commercial lender, said he had made a hundred million in loans on commercial property, but he had never personally bought one; Brad & the network allowed him to.

Personally, I am a passive investor.  I walked in knowing little about MF; I knew real estate was lucrative and I knew I didn't want to do SF. 

I contend that the access is well worth the cost!  To that point: January was quite active, I received notices about 8 different MF deal in my email.  As I had one deal sell in Dec and another in Jan, I had some money to redeploy.  Realize I am a passive investor, so I don't control timing, but I expect one to sell in Feb, one in March, and another couple later this year. I have access to many deals. 

Only you can make the decision about the worth of a mentor.  Brad Sumrok has a R2R coming up soon, March 9th & 10th (2019).  Attend and then decide.  Worst case, you will spend the week-end getting a very good overview of MF.  I think you will be impressed with the number of folks enhancing their lives in Brad's network. 

No, Brad does not PAY me and I don't work for him!  But I do volunteer at his events - I like to return the favor, he has upgrading my retirement from "coach" to "first-class". 

I have invested in 43 MF deals, 12 have sold.  Yes, I am a relatively active passive!   Sponsor make more that passives so most students tend to move toward sponsoring.  Color me lazy, I let them do the work and I cash the checks.

Regards,

Charles LeMaire 

Welcome to BP.

In 2010, I was an EE with about 30 years.  My wife and I knew very little about RE so we visited a local RE Group.  We met our current mentor, Brad Sumrok, who gave a great presentation on MF.  As I decided to continue working, we invested passively (sponsor make more, but I actually enjoyed my job).  The early investment some cash-on-cash, but the big pay-off was when the properties would sell.  

Many folks feel that a paid mentor is a waste of money.  If you pay and don't use or have little left to invest, I agree,  If you have knowledge and access to what you need (money or sponsors), there is no need for a mentor.  But for us, it has been a very good experience.  Happy to provide more details about my story or the network if you are interested.

I note you are from SJC area.  There are several members of our network from CA and other places.  Members have bought properties in about a dozen states.

Disclosure: I do not work for Brad, but I am a happy Brad-ite and volunteer at his recruitment events.

Regards,

Charles LeMaire

I am a happy Brad Sumrok student.   His program has been very-very good to me!  To date, as a passive investor, my annualized returns on the 10 completed deals is 30%.  There have been some absolute home runs and a couple of dogs.  I have another 30 deals in the queue.  Each deal take 3 to 5 years to mature - there are 4 preparing to sell at this time.  One of the many things I like about Brad is that he teaches his students how to make their own money in MF - there are over 70 of his Personal students that have made $1M+ as syndication sponsors and there are dozens of Foundation students that have made $1M+ as passives in those syndications.

His is not a buy these CDs or books program.  He has training and a network, the members of which are constantly finding, buying, improving, and selling MF properties, around 60 in 2018 and around 45 in 2019. 

Forgive me for my $0.02 on this topic.  The opinion is my own... I may not be right, but I am sure!

I invested as a passive in one MF syndication using my IRA, a traditional IRA. I will say that deal has done wonderfully; it is now worth about 4 to 5 X what I invested about 6 years ago.

As I am now 65, I can see the IRS writing on the wall with the RMDs on my horizon; RMDs start at age 70 and a half. I absolutely realize that all that gain and my initial investment will have to come out of my IRA at some point and it will come out at Earned Income Rates, not Cap-Gain Rates.

As I am now retired and have a very low earned income, I am pulling the property out now when tax rates are low, especially on my lower income. I plan to pull it all out of the traditional IRA in parts over the next 3 years and pay the presumably lower taxes now. I may keep it unqualified or roll it into a Roth IRA. I will have some cap-gains one way and no tax the other, but control is worth something. And there is the pesky UBIT tax to deal with.

So I suggest that if you intend to invest in such a manner that makes a lot of money (who would plan to not make money?), then the traditional IRA may not the optimum vehicle. I feel the Roth IRA may be a better choice.

Also, if you have to take an RMD from an account that has no money, but has only property, that can be a problem.

Please also consider that RMDs can push you to pay more tax on SS (assuming it still exists when you get there - Thanks to all of you who will be paying my SS when I take it in a few years; and I apologize that you will pay more and get less, but that is an entirely different topic.) and you will be charged more, a lot more, for your Medicare. 

Regards,

Charles LeMaire

PS. No tears for Charles! I am simply suggesting you understand who it works and figure out how to best manage it when you get there.

Lesson Learned:  I thought I was adding this to the profile - I was tricked!  

I intended to just list a few of the deals with their details in my profile, but I got suckered into creating a thread - not my intention...  Multi-Family has been good for us.  Our mentor has been good for us; it is a great group/network.

There are all sorts of business models, this one has been good for us!

Comment if you like, but I was not trying to start a bragging war...

Regards,

Charles

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $100,000
Cash invested: $100,000
Sale price: $281,305

Passive investment in 105 unit multifamily (Casa Flora)in east Dallas. 181% return in 19 months or 79% IRR (annualized yield). Yeah, this is the best one so far.
I am a very happy Brad Sumrok student. The Sumrok network has allowed me to find great Sponsors and invest in many great deals.

I first heard of GC mid this year ('18) when he was invited to speak here in the DFW area.  Then a friend's son mention they were talking about him in B-school. 

At that moment, I was a passive investor in 4000+ units (we boast about unit count, but only own a small percent of a deal.  It's not as big as it sounds). 

I have never needed the "Rah-Rah" factor, but I decided to do a little research. I visited GC's web site: 5000 units and $1B, that works out to $200K a door. That's not my market, I am in mostly B & C. So then I continued down the page and found 20 or so deals that look a lot like REITs. Many were close, most indicated a CoC return, a pretty good one. None seem to indicate any sharing of the 'take' when sold -- maybe he doesn't sell, we usually do after 3 to 5 years and make a lot of Cap Gain.

In my mentor's group, 70+ sponsors have become millionaires from there MF endeavors and dozens of passive investors, like me, have become millionaires from their MF endeavors.  I do realize one can start with less initial investment with GC and he pays a great return, but does he spin off millionaires?  Seems to me that one fellow makes most of the money at GC.

To set the scale, our group has done about 60 deals, about $0.5B value, this year ('18), 40 deals last year ('17) and about 30 in '16. 

No, I am not a paid spokesperson - just a very loyal and wealthier student!  

Regards,

Charles

What is your motive?  Many of the MF meet-ups in the DFW area are feeders for the big mentors in the area.  There are a few meet-ups that are hosted by realtors, most are SF and small MF centric.  A few are organized by MF syndicators, some push themselves, some don't.  So back to "what is your motive?"

In your list, the 'deal pitching' is a bit concerning.  Assuming you are talking about syndications, usually they are 506b and occasionally 506c.  The first requires a pre-existing relationship, the second requires accredited only investors.  Talking about example past deals is a bit safer. 

My friend Paul has a point, you may mostly attract contractors and various support folks.  As this investment strategy is all about making contacts, I would likely attend to check it out, but my return would be dependent on who attends.

As a point of order, that first deal (and my first KP deal), an agency loan, went into technical default, the Sponsor was hiding from the lender and not providing required reports.  I ended up on the Bad-Boy list for about a year.  The lender was about to flip it from non-recourse to recourse! It can happen! After the mutiny, Kenny Wolfe stepped up to lead the deal and saved it. The investors ultimately got about 20% IRR (annualize). He also took over the other property, the value play; we ultimately got 13% IRR, on that one, well below what we could have gotten.

On the most recent KP adventure, it was a value play so the loan was recourse from the beginning from a local bank.  I expect to do nicely on this one.  As I mentioned above, all deals have bumps.  On this one the Sponsor/Lead spent $620K of the $450K rehab budget.  It's a long story, but I suggest a running total of the expended rehab be promulgated in each monthly report.

Regards,

Charles LeMaire

We have invested in 39 syndications to date.  There have been a few horror stories; actually only a couple have gone absolutely smoothly.

* On our first deal (160 units in Irving TX), after about a year, the sponsor kicked off a second deal (this was his third deal - 100 units in Ft Worth, a value play).  About 6 - 9 months into the second deal he lost focus!  We almost lost both deals.  I was a KP, formed a cabal and we tossed him from the first and the KPs soon after contacted me and they tossed him from the second. 

* On a small (26 unit) deal in E Dallas, we had a terrible management company - small deals are very hard to get good management at a reasonable price.  

* On a two owner deal (he was Sponsor and I was KP), he passed away.  I had to take over, but his estate could not be a KP.  Luckily I had been doing very well in several deals by then.

There are other stories, but they get involved.  It is always one of the 3 Ps: Price, People, or Product.  

Regards,

Charles LeMaire