All Forum Posts by: Chase Louderback

Going to echo @Frank Wong because it's that important.  Make sure you know the track record and the groups performance.   If you are comfortable with their answers but still uneasy about investing then just do the minimum investment the first time to see how everything goes.  That way at least you aren't risking all 150k.  

Also, just out of curiosity, are they stating that you will get roughly an 85% percent return over 5 years (12% annual x 5 years + 25% profit at sale) or that it will come out to roughly an average return of 25% per year over the 5 year period (a total of a 125% return)?  

If your plan is to buy a SFH rental turnkey then it would make a lot more sense for you to go the syndication route as an LP with a strong group, in my opinion. One of the big benefits from getting single family rentals is (generally) you are going to be buying them for a discount, fixing them up to rent out and possibly refinancing. That equity is definitely something to consider. If you aren't getting that then it makes sense to work with a syndicator that is implementing a value add strategy on their acquisitions.

Something else to keep in mind is that you said you are accredited, so with your networth you could get a slice of the GP as a co-sponsor for larger deals when networth is needed for the loan.  If you can't find any reputable syndicators with a good track record that need a co-sponsor then you can always join as an LP and to learn how the process takes place.

Hi Sol,

That's awesome that you have so much set aside for real estate investing at a young age.  Ultimately, that decision is up to you depending on how much time, risk and the type of investing you want to do.  

Flipping can up a lot of your time and like you said the short term capital gains can eat into those nice looking profits.  This also wouldn't give you any tax advantages like some of the other options you mentioned.  However, some people love it and have been able to set up businesses that are fairly close to being "auto pilot."

Multifamily/Apartments could give you the net worth increase by investing in value add opportunities, the tax benefits, and some cash flow.  With the amount you have set aside and your net worth you could be brought on as an LP, KP, and/or GP in the deal.  Based on your time allocation, desired tax advantages and wealth generation, this may be the best option for you.

I do not know much about other commercial property investments aside from self-storage and Mobile home parks.  Either of those could work well for you too.  Hopefully this helps.  If you have any questions feel free to DM me.  I'm always happy to connect!

Hi Nicio,

Definitely look at going the education route before making calls, reaching out to investors, etc.  Then, like Lucas said, you can decide what role in the deal you want to play.  Some people do a little bit of everything, but for the larger deals you are basically going to have to have a specialty when you are starting off.  Maybe you like the money raising or the deal sourcing so you can just focus on one of those two things and partner with an experienced sponsor to get in the game.  

If you focus and specialize on one part of the process you can master that as opposed to being a jack of all trades.  This can be valuable to other sponsors.  There is always value in being able to bring capital or money to a deal.  Just some thoughts.

Look forward to hearing more about how your business goes.

Hi Ben,

Will do.  We are all set for that date and time.  Look forward to meeting you!

@Erik Schneider

You can check out some apartment or syndication conferences/seminars to see if its a direction you would like to pursue.  If it is then there are a good amount of online courses and mentor ships out there with reputable sponsors and that could be your next step.

Books:

David Lindahl's books Emerging Real Estate Markets and Multi-Family Millions.

Crushing it in Apartments and Commercial Real Estate by Brian Murray

I have heard good things about Best Ever Apartment Syndication Book by Joe Fairless but haven't had the chance to read that one yet.

@Ryan Riches  A lot of good responses here and house hacking is a good (relatively) safe way to get into the landlording and the real estate game.  Like Lucas said you need to decide what you want to do.  You can get right into whatever you want on the real estate side.  If your end goal is Multifamily, then house hacking and improving a 4-plex could be a great place to start.  If you want to flip or wholesale then why not get right into that instead?  

Don't worry too much about choosing the wrong path and being stuck either. If you try flipping and hate it, then you can always try wholesaling, landlording, etc.  Good Luck!

Echoing what @Jay Hinrichs said, YOU really have to have the experience OR someone you recruit on your team has to have the experience to take these deals on.  Think about it from the perspective of the potential investor.  Why would they want to lend you their hard earned capital when you haven't done a deal?  That's not to demoralize you, but just something to keep in mind.  Now if you know of someone in the area you can partner with, or you have an extremely solid business plan, then that can make it much easier to find capital.

Just having one deal done to show you can do it will definitely help with finding investors for your future deals.  Maybe you could partner with someone local and help them with their flip that way you get the experience.  Another option could be to bring an experienced person on as sort of a "mentor" position and they will get a cut of the profits, but when you are asking investors about joining you on this opportunity you can use the mentor's experience as a way to make them feel more comfortable.  

Now about approaching investors and preventing them from cutting you out of the deal, I believe your only option is really to have it under contract.  You can make the contract so that it is easy for you to get out in case you can't find investors.  Alternatively, you could make a vague overview of the property and plan so that they have enough information to know if they would be interested in working with you on this deal, but not enough information to snag it from you.

Feel free to DM and talk some more about it, but hopefully that helps.  

Hi Randy,

Depending on the project and the number of investors involved you can do things different ways. I've had experience with investors that will put capital down for fix and flips and essentially act as hard money lenders. The other alternative (in the SFH space) is some investors just want a decent return over the long haul so they are open to putting down a second on a rental property for a set return over a set number of years. You can basically be creative as you want to be about those arrangements.

If you have a lot of private investors (probably more than 3) and they want to do absolutely nothing besides give you the money and get a return on it, then you would be in the "syndication" space.  There are some more rules and hoops you have to jump through for syndications.  Also, you need to make sure the profit margins are there because syndications can get a little pricey.  How the structures, returns and profit splits can be done for this type of deal can vary a bit as well.  

Feel free to DM me if you have any questions or just want to chat.  I'm happy to talk real estate any time.

@Mike Taravella This is the Syndication Seminar in Dallas, TX.  It's on  February 15-16.  I've heard really good things about it, definitely check it out online.