All Forum Posts by: Charles Seaman

@Nick Love There sure are a lot of "bird" references in this question.  With that being said, I'm naturally an early bird, but over the last 15 years, I've gotten used to being both an early bird and a night owl and it's something that I've carried over to my multifamily investing.  Go until you can't go any more.  The key is being able to remain productive.  You have to know yourself well enough to know when you're no longer able to be productive.

@Matthew Rembish The return that an investor desires to achieve from any investment will vary from person to person based on their own preferences. I most frequently look at C assets in secondary and tertiary markets. My general criteria is to look for deals that produce a minimum 8% cash-on-cash return and 16% annualized rate of return after the value adds have been implemented. If I'm looking at deals of a better asset class (B) or in a bigger market (Charlotte, Atlanta, etc.), then I'm willing to go as low as a 12% annualized rate of return. Many investors seem to desire a 15% IRR or greater, but most experienced investors are flexible with their requirements so that they have the ability to invest in more attractive deals that produce lower returns. Have you ever underwritten a multifamily deal before?

@Snehann Kapnadak The acquisition fee is typically split amongst all the members of the GP.  If you choose to stay in the deal, you should be compensated with a portion commensurate to what you did.  Keep in mind that finding the deal is one piece of the puzzle, but that there's a lot more that goes into closing a deal than simply finding it, doing the underwriting, and performing due diligence (raising capital, sponsoring the loan, and asset management after it closes are also key parts).  Any splits are typically finalized when the operating agreement for the GP entity is drafted.  If you're concerned that you might do the work and not be compensated for it, then you ask the person or group that you're bringing the deal to for an informal agreement upfront that will spell out the terms of your compensation at the time that you bring the deal to them.

@Jim Glover Different investors prefer different investment vehicles.  Both can be good investments depending on what you're hoping to get out of them.  Many investors likely make better returns on single-family homes, but multifamily provides easier scalability and also makes it easier for you to afford professional property management without taking as big of a chunk from your profits.  In terms of management, you'll likely find multifamily easier because at least all of your tenants are in one location rather than having multiple houses that are located in different parts of town.

@Carlo Torres As a former New Yorker that relocated to Charlotte last year, let me welcome you.  I'm a co-organizer of two (2) local Meetup groups and would be glad to connect with you and to connect you with other local investors once you get down here.  If you have any questions that I can answer for you in the interim, please feel free to ask.

@Jesus Orbea If I was 34 again (I'm 35 now), I'd take the larger deal over multiple smaller deals, but it really comes down to personal preference.  Multiple single family homes will likely give you a better return, but larger deals will give you the benefits of scalability and ease of management.  I personally prefer the latter.  Decide which you prefer and go after it.

@Account Closed There's nothing wrong starting off with a deal this size if you feel that you can handle it.  You have to honestly assess your knowledge and skill level and determine if you will be able to successfully acquire and operate this asset.  If you've done your homework and you have the right people on your team, then you can definitely do it.  But don't be overzealous by doing it solely because it's bigger because that'll ruin your reputation and perhaps your finances quicker than just about anything else.

@Evan Loader As a syndicator, we track them through the use of spreadsheets.  Some groups will use investor management software programs (ex. IMS, etc.) and others might still have different systems that they use.  We simply track how much each investor invested, what their preferred return should've been, and what was actually paid out for each quarter.  If there's a shortfall, it'll stand out so that we can see it in the future and can pay it out when there's money to do so.

You're welcome @Tim Mason

@Tim Mason The answers to your questions are below.

1.  The attorney does not need to be located or licensed in the state that you're doing a deal in.  It is recommended to have a real estate attorney that is licensed in the state that you're doing a deal in because you want somebody that's familiar with the local laws, but SEC matters are largely federal.  There are certain things that will vary at state and local levels, but a good syndication attorney will be able to help you navigate this process regardless of where they're located.

2.  Other than the ability to have an in-person meeting with the syndication attorney, there is no other benefit to choosing a local syndication attorney (although many of the prominent ones are located in CA, so you'll have a good selection to choose from).

3. I'd recommend Gene Trowbridge of Trowbridge Law Group LLP in Lake Forest, CA or Jeff Lerman of Lerman Law Partners, LLP in San Rafael, CA (https://www.realestateinvestorlaw.com/).