All Forum Posts by: Chris Salerno

Hi All, 

My current situation is one that I have a fair amount of capital but not a lot of time.   I’m considering investing in syndications vs  buying single family homes.  The syndications appeal to me because of the passive nature but I’m comparing single family homes because they are the less time intensive properties to “landlord” in my area.  

It seems syndications have a fair amount of tax advantages and capital gains can be pushed back through a 1031 making it attractive as well.  Single family homes in decent areas near me (South Florida) are fairly expensive and cap rates are not great.  

Please convince me as to why syndications are better because, similar to many others here, owning a property outright and having full control is appealing but everything else makes me think syndications are a better investment for me right now.

Thank you!

Daniel, I hope you are doing well and had a productive weekend. 
I came from the single family investment side. When it comes to single family it is a headache. You are also limited on scalability when you invest. Invesitng in Multi Family you can leverage your capital. You will end up making more capital on the exit and also the tax benfits as you mentioned. I am a Multi Family sydicator. 
I highly recommend looking into Multi Family as a passive investment. I would also do due diligence on the deal/ operator you decide to invest along beside. I can go deeper with some questions if you want to message me so you are well prepared.  

I have been reaching out to investors in my local network in order to gather equity for doing an Apartment syndication deal but it has been slow going. Therefore I was wondering if it would make sense to sell-out some of my cash-flowing SFH in order to generate the capital for the first deal. I am a bit hesitant to do this because several are completely paid off and with very good tenants.

Should I just be patient and continue working gathering passive investors or jump start the process with more of my own capital?

Has anyone else been in this position? 

Thanks,

TMG Travis, Congratulations on building an SFR portfolio that some are paid off!In my opinion, I came from single-family sales/ rentals. I highly recommend to sell the single-family homes and put it into Multi-Family. Depending on the deal, location, asset class, cap rate, and unit size. You will make a higher NOI(net operating income) on a monthly basis with Multi-Family than Single Family. I

Hey BP!

So I have been looking for a multi family 3-4 units in CT with no luck in my price range, $300,000 or under. No luck, there’s always “something” that makes it not worth it enough to put in repair and have it cash flow. So I was thinking, why not go all the way with an apartment complex, looking in a few different states.

I could have 30k cash and 70k equity on primary home for a total of 100k to put down on a 1M or lower. From what I see these properties claim NOI 70-90k after expenses.

So my questions are how much would my monthly mortgage payment be on that property purchase price 1M? Do these numbers sound reasonable or am I stretching it? Would buying a complex at 1M be profitable to me as far as cash flow after expenses are paid, what would you considered “good cash flow” using these numbers?

Thanks so much!

Hi BP!  I am coming to you for advice.  About a month and a half ago I was talking to one of my old buddies from the Marines and he was telling me about his new life as a Real Estate Investor doing primarily single family flips.  Flips are not exactly my cup of tea, but it did spark something inside me.  It began a voracious consumption of all things real estate investing.  

I now know what I envision at the end of my path - a respectable multi family portfolio that provides passive income that will secure the financial future for myself and which can be used as an educational tool to introduce my two young daughters into the concept of entrepreneurship around real estate.  The end of my path is easy for me to envision, but the first step is proving the most difficult to decipher of them all.  

As a result of all of the knowledge gleaned from books, audiobooks, forums, podcasts, and YouTube, I feel I know enough to not quite be dangerous, but instead I’d classify myself is ‘slightly-menacing’  :-)

A common theme has arisen from every single successful person I’ve read about, watched or heard in the syndication space and that’s a regret they have about going it alone at first and figuring it out themselves.  Almost all of them say if they were to do it over again, they’d have paid a mentor to get them over the line faster so they’d be even further down their path today.

I have joined my local Real Estate Investor’s Club in Orlando and I look forward to spending time with those good people but until I can get in good with them, I figured I’d ask this here.

I have no problem investing in my education. I do, however, have a rather large problem being the fool who is soon parted with his money. I guess that’s why I’m asking you folks. I’m not asking you what I should do, I’m not that naive to assume you discern that for me. I guess I’m asking the folks who are there today where I’d like to be in the future - would you spend the money and mentor-up with a pro? Or do you feel like you’re the success you are today because the school of hard knocks is a good teacher?

Thank you in advance for your thoughts BP, I value your feedback.  

Regards, 

Tim StreetIn this business its all about relationships. I use to do Single family flips and I do not care for them. I prefer to focus on bigger investments. 

I can connect you with some syndicators in the orlando area that can help and educate you in this process. I would say start to listen to podcast. Mindful Multi Family Podcast and start to read books around syndication to gain knowledge. It is very important to gain knowledge in this business. Message me if you have any further questions! I hope this helped.

That's some head scratching math but whatever you say my man. Good luck to you.

Bummer. To be fair though only $35k was stolen from you. Not an insignificant amount but still a helluva lot better than $90k.

 Correct, In business you have to calculate all expenses. I did not want to spend an extra 45k to fix the home. So all of that would be considered stolen due to the fact he took the 35k from me. 

@Chris Salerno

Hey Chris, I feel you and share a similar mindset. I need to scale to get to that level first. I'm just getting started in the game and need to get a few single family properties under my belt and network into some commercial investor circles before I feel comfortable leveling up past SFR. Thanks Chris.

 Ouch how'd that go down? $90k down payment and he walked away from the job?