All Forum Posts by: Chihiro Kurokawa

It took me over two years but I went from zero units to passively investing in 114, then closing my first deal, a 128 unit last week. I have three very experienced partners on my deal. 

@Nate Gottesman

I tried first without a mentor, then with a paid mentor. I think either way you need mentorship. If you have the hustle and fortune to get free mentorship, more power to you! 

I had a lot of difficulty getting traction for the 16 or so months I went at it solo, so finally I decided to spend a significant chunk of change to join a group called Think Multifamily. From what I understand the pricing is around the same for all of these groups, which is enough to buy a new car. 

I'll tell you what I tell everyone. If you don't have the will or ability to take on a second job, don't do this. Getting an apartment is really hard work and requires a broad range of skills. You have to be good at networking. You need to be able to underwrite well. This isn't just about being analytical; it's about having enough experience to know what is aggressive vs. conservative. You have to be known, liked and trusted in order to raise capital. Then you have to be an excellent project manager and juggle multiple balls while the property is under contract. And then after all of that you have to deal with taxes, cost seg, investor communications, renovation, staffing etc.! Oh yeah and do this while continuing to analyze deals to grow your empire.  

Are you willing to relentlessly pursue this for an unknown length of time? For reference it took me almost two years to get my first deal under contract. Are you obsessed with becoming a multifamily operator? Will your spouse be OK with you spending seemingly every waking moment on the phone, visiting properties, going to networking events and conferences? This is all while your spouse's workload goes up because of your unavailability. While you're doing this you're spending tens of thousands of dollars on something with no guaranteed result. Shoot, are YOU okay with gambling on yourself like that? Note I said gamble on yourself, not real estate. If you have the right mentorship you won't overpay for assets. 

I think the hard reality is that many will join mentorship groups but not all will succeed, and my guess is that in most cases the student wasn't willing or able to put in the work. 

Do you have it under contract or at least an accepted LOI? My guess is that you don't, but please correct me if I'm wrong.

As has been pointed out, "finding" consists of more than being on a broker's email list. But don't get discouraged. I made this very same mistake in the beginning when I didn't know what I was doing. I'd underwrite a listed deal, email established syndicators and wonder why they ignored me or chewed me out. 

Contrast that to two years later when I did have a great deal with an accepted offer, and I was able to co-GP the deal with massively successful, well-known syndicators. 

Yosi there are many people here on BP who have a lot of experience with syndication, and there are people like me who are early in their real estate/multifamily/syndication journey, and there are many more who have experience passively investing as limited partners in syndications. 

If you can ask a more specific question you'll probably get better/more responses. 

I started my multifamily journey in the beginning of 2017, passively invested in a 114 unit deal in Atlanta in June 2018, and got my own deal under contract in late 2018.  

@David Thompson

I agree that people like you play an important role and add value.

However suppose somebody has raised capital for several deals for well-known syndicator/operators. They reference the number of doors and deals publicly and build a strong reputation on that basis. They don't ever mention that they specialized in capital raising for those several deals and certainly make no mention of having zero acquisition or asset management experience.

Then they acquire their first deal and list their tombstones in their deck but of course do not mention that they were involved strictly as a capital raiser. They enlist several people to help close the deal, which begs the question, why were they needed anyway if the main guy is a solid capital raiser?

And now the LP's are in a deal where the most experienced GP has literally zero asset management experience. And when those folks did their DD on the sponsor they would have come across numerous podcasts in which this person confidently mentions the several deals that they executed, again never mentioning that they only raised capital.

This is to say nothing of the fact that they got 3 year debt on a stabilized property, and they're projecting 10% CoC in year 1 to the LP's when the deal itself only throws off 2%, and the pref is 8%. Why distribute more than 8%? I think there could be a better use of that equity or am I missing something?

Anyway this is the sort of practice that will hurt the industry overall because people will get burned if market forces don't bail this guy out.

@Wesley Hill I know right?!? Haha. I think it is important when listening to podcasts hosts and guests to look for the speaker to speak in-depth about the acquisition process and other such particulars. If the discussion is more superficial and for example based only on how many units or deals they have executed, one cannot assume they are experienced operators. 

 Andrew that is unfortunate. But now you know that a deal isn't yours until you have it under contract. 

I went to UCLA for the part-time MBA program which cost 40k a year for three years. 

I've spent a far, far less for real estate mentorship. 

If that's the worst thing that can be said about Michael Becker and SPI I'd say that's a very good sign. 

 What happened to you is unfortunate but no syndicator including Becker is looking to blow off potential investors. 

I don't know that more regulation is the answer, after all these are private offerings and we are entrepreneurs for a reason. In the case I described he isn't doing anything illegal as far as I can tell. 

Ultimately the burden of due diligence rests with each of us as investors but I really dislike shady people. 

My recommendation to anyone evaluating a private offering (real estate or otherwise) is to find out the partners' operational experience directly from other operators in the industry. Unfortunately podcasts, hand-shaking and online research alone cannot be trusted.