All Forum Posts by: Chris Soignier

Regardless of whether I'm the buyer, seller, or representing a client, what I'm most concerned about is the net cost or proceeds.    If a seller wants me to pay their title insurance, but is willing to cut the sales price by more than the cost of the title policy, I'm good w/ that regardless of local custom.

I'd hope you have a mutually trustworthy, transparent relationship with your broker.   If he/she can't accept you wholesaling, and you're committed to it, then perhaps you might want to consider switching to a broker which is OK w/ it.

I bought their package via Groupon for under $200.   It was very complete, and prepped me to easily pass the exam on my first try in 45 minutes (vs. 4 hours allotted).

Customer support was good, and the material all seemed current.   I will say that taking it online was pretty boring to me, and all else being equal I would have preferred a traditional classroom setting.    Otherwise, it was an excellent value and I can't complain about anything else.

Sorry, but I'm not aware of any REI groups that meet on Sunday mornings. Add in the fact that this is Memorial Day weekend, and REI activity today and Monday is lighter than normal as well.

It would be simple.   We'd sell Class A units, which would provide a 15-20% override to sponsors, to passives.    If it was just my sis-in-law and me, it would prob. be less, but our other partner has an extensive track record of successful MF acquisition and management.   The override would be on all distributions and excess returns upon sale once all initial capital had been returned to investors.   All investors would pay 5% for asset and property management, of which we'd likely pass 3% through to 3rd party property managers.    No acquisition or disposition fees, taking 15-20% of the revenues and gain on sale s/b a fair reward.

I've seen crappy leads, and known of leads to get voted out of their managing membership.   Under my scenario, they can keep their equity but lose their override.   Under yours, they still have passives' 25% equity share and the upfront acquisition fee despite destroying shareholder value.

More power to leads who reap those fees, but if you're a passive in Lifestyles Unlimited &/or network w/ Brad Sumrok's students, those types of deals will look pretty unappealing.

 W/ all due respect to Mr. Blank, I've invested in 11 MF syndications.    Not once have I granted equity to a sponsor or paid an acquisition or disposition fee.    Lifestyles Unlimited is controversial here at BP, but one thing they clearly don't get enough credit for is issuing deal sponsor guidelines that are fair to all parties.

You have no track record, and are justifying taking equity based on pro formas that may or may not be realized.   Let's say you fail to realize them.   Not only am I stuck in an underperforming deal, but I've also given away 25 cents on the dollar for the privilege of doing so.

Many investors don't think acquisition and disposition fees are nearly as material as they are, b/c they don't account for the fact a only equity pays for a fee on the entire asset value. For instance, if you leverage at 80% LTV, a 2% acquisition fee amounts to 10% of my starting investment paying for it. Then you want to take 25% of the remaining equity, and I'm left w/ barely over 2/3 of my investment (67.5%, to be precise) left working for me before you've created any significant value. Now my first 48% in returns is just going to get me back to break-even! I am looking for a 150+ unit complex as a sponsor, along w/ my sister-in-law and another partner, and we will not be resorting to those types of fees, either.

Sure, there are unsophisticated investors who will bite at such comp structures, but I can do deals all day long w/o those fees, and have seen a direct correlation between lead greediness and their difficulty in fully subscribing their private placements.

Yes in that you both profit from the upside, no b/c IMO you're screwing them by taking 25% of their equity.   Their first 33% return will be just to cover their "gift" to you.   Why not take a modest override (5-10%), plus asset and property management fees totaling 5% (which you may have to pay back out, depending on if you DIY or not)?    Think of this as an internship, and people are taking a leap of faith on you w/ no track record.    You're learning on their dime, so you shouldn't be too demanding in terms of lead compensation.     Earn your comp when you create value, not when you close the deal, and your investors will appreciate and trust you more, which can only help to build your reputation and make capital raising that much easier in future deals.

 That depends on your effectiveness in fund raising.   Personally, I wouldn't invest w/ a first-time lead who has no "skin in the game", and prefer that even seasoned deal sponsors have aligned interests via their equity investment.   Others, however, might.   $100K is small amount to raise, so give it a shot.  

Jim Silvis

silviscpa.com

I  like him enough to use him even though he's not local to me.

My attorney, who's a nationally known expert on asset protection, charged $1200 for a consultation to determine my needs (corporate structure, trusts, etc.), then to set up a series LLC w/ 2 series, each w/ a different tax structure and one w/ a tax-optimized operating agreement.