All Forum Posts by: Charles Seaman

@Steven Morris It's really a matter of preference.  The material that David Lindahl teaches definitely works and you can have some success with direct mail to sellers of 10-50 unit multifamily properties.  If the strategy that you're currently using works for you and achieves the result that you're looking to achieve, then there's no need to change strategies.  But if you want to scale up, then this is one way to do so.  What are you hoping to achieve?  A good starting point is probably to figure out what you want and to then reverse engineer it.

@Eric J Platter  It'll really vary based on the size of the property and the property management company that you're using.  In general, I'd expect it to be somewhere between 2.5% and 5% for a property that has full-time staff.  If it's a property that only has part-time staff, then the management fee will likely be higher.

@Eric J Platter They are not double dipping.  The property management fee is totally separate from payroll.  The property management fee covers all of the back office functions that the property management company provides (ex. accounting, marketing, supervision, etc.).  Payroll covers the employees that the property management company hires to work at your property.  So if they hire one manager and one maintenance person to work at your property, then the property management company bills you for the direct reimbursement of the wages, payroll taxes, and payroll burden for those employees.

You're correct about the property management fee being less if the property has onsite staff.

@Sudhir N. Before forming the entity, you should also check with the lender because certain lenders have requirements for which state the entity has to be formed in.

You're welcome @Russell Beach

@Russell Beach You're welcome.  I purchased one (actually multiple).  You can find underwriting tools that range from free up to $5,000.  I typically use Michael Blank's Syndicated Deal Analyzer most times and that costs $129.  I've also used Commercial Underwriter.  That costs approximately $2,000 for the initial purchase and includes a 1-year subscription.  It then has an annual renewal fee (I believe that it's in the $800 range).

@Russell Beach  My answers are below.

1.  I have been in multiple apartment syndications, but haven't yet hired anybody.  My first hire will be an asset manager.  After that, I'll likely hire an administrative assistant to help with basic tasks.

2.  I've done three (3) syndications and have two (2) more in process currently, so the answer will likely be five (5).  I did these deals without any employees, but there was definitely a lot of support from other team members.  Syndications often take the support of several people to be successful.

3.  For my first deal, roughly 1/3 of the raise came from my team.  For my second deal, none of it did.  For our third deal, roughly 15% of it came from my team.

4.  Absolutely.  Unless you have the net worth, liquidity, and experience to qualify for a loan, you'll need to do this.  For the deals that we've done so far, their compensation was anywhere from 33% to 40% of the GP.  You can find some guarantors that will do this for as little as 10% of the GP and others that will do it for as high as 50% of the GP.  It really depends on what you're looking for.  If you want a guarantor that's going to be very active, then you should expect to be on the higher side of that range.

5.  To date, I've only done 506(b) offerings and I plan to continue doing them for the foreseeable future.  Keep in mind that 89% of deals are 506(b) and only 11% are 506(c), so most people are using 506(b).

@Dennis Yosco It sounds like you're off to a great start.  Are you looking for guidance or for somebody to work with that you can learn from?

@Dave Michael Different syndicators need different things.  Some need deals, while others need capital.  And some need boots on the ground.  So starting out, your best bet will be to find deals, find capital, and/or be boots on the ground.  For our team, capital is our greatest need currently.  If you want to discuss it further, I'd be glad to give you some pointers.

@Danielle Bennett It'll vary based on your experience level and how badly you want a deal. Generally, I use 1% of the purchase price for EMD and I aim for a 30-day due diligence period before the EMD is nonrefundable. If you're looking at deals that are more competitive in desirable areas, then you may need to go higher on the EMD with some or all of it being immediately nonrefundable and/or shorter on the due diligence period.