All Forum Posts by: Andrew Hogan

Remote rehab and unknown turnkey providers have so much inherent risk... I'd partner up with experienced investors in the area to get your feet on the ground.

Shafi, unfortunately, the SFR experience doesn't always efficiently transfer to MF experience. I would say to buy your experience by partnering up with other experts in the space. It may reduce your returns but it will greatly mitigate the risk. After a few less active deals, you will be able to take the wheel (and investors' money) with much more confidence.

Chase, congrats on graduating! I would say to pay down the student debt using the cash flow you will receive from your investments. Once you are accredited investors (300k joint income for the past two years), you will have access to the best deals that provide the passive income you're desiring. 

@Alina Trigub so true!
Many people find that they are already good at something and use that income to inject into the deals of others... 

Even if you do want to be an active syndicator Lamont, it's never a bad route to learn by investing with other experts first. 

Hey Lamont, I'd say to "think big and start small!"

Perhaps raise some from family and friends on a smaller 2-4 unit to prove yourself and learn the mistakes on the smaller deals before risking the big bucks!

Brian, there is no easy way to finding deals. We usually underwrite 200+ before accepting one. As far as "finding people that can be trusted who will deliver true investment vehicles that can be invested in..." sounds like a question on how to Vet a sponsor...

Do Your Homework

I always advise that people do their research when it comes to sponsors and deals. When you’re considering an investment sponsor, do due diligence. I advise that you:

• Ask for references: Email references and set up a time to call them. Ask some open-ended questions and find out what they have to say about the sponsor.
• Look at the team: Is the sponsor a one-man show? If there’s a team, what do they bring to the table?
• “Stalk” the sponsor online: Do some basic internet searches. If you’re not finding much about the sponsor, that could be a red flag.

Research the Asset & Property Management Teams

You should absolutely research the asset management and property management teams. Be aware that some sponsors have an in-house, vertically-integrated property management team and some hire an outside team to take care of the asset. With third-party property management, you may end up with a great group but you can also lose some control. The important thing is to research whoever is taking care of the day-to-day management of the property. I tell people to look online, but don’t be too disappointed if you see negative reviews. It’s hard to please every resident and still turn a profit! What you should pay attention to are reviews that talk about the investor relationship, follow up, execution, timely reporting. A negative review on these subject areas could be a red flag. Also look at the asset management team, the group that “manages the managers,” finance, budgets, and investor relations.

Check the Sponsor’s Track Record & Ask About Mistakes

When you’re looking at a potential sponsor, you want to see their track record, specifically in the asset class you’re considering. If they bounce around from luxury to workforce housing and don’t stick with one class for long, I’d be concerned. Plenty of sponsors are interested in value-add (renovating projects to increase value and cash flow); in that case, you need to look for experience. Have they done it before and if so, how well? Did they learn from any mistakes? Finally, don’t be afraid to ask about mistakes. Any sponsor should be able to tell you what they’ve learned from past mistakes. A sponsor who feels like they can’t lose is a very dangerous person to invest with.

@Perig Vennetier, Yes you do need to pay taxes in the US if you are a US citizen or national living abroad. However, you get to deduct any taxes that you paid to the foreign country and of course, real estate losses... For tax purposes, there are people who specialize in setting up a business abroad for you.

Like others have said, returns are contingent upon your risk tolerance. I'd plan on 250k in your real estate investments yielding you 10% to be safe. Your objective now is to underwrite different sponsors that can get you that yield.

Good luck!

1.2 Mil is a lot of equity to be sitting in one or two doors. If invested properly, the capital can be spread across thousands of income rental properties mitigating the risk while still producing solid cashflow...

I can't testify specifically about his real estate courses. But he does have a LOT of great content out there. He isn't everyone's cup of tea, but he knows his stuff. He has several best selling books (I have read/listened to 4 so far).

Absorb the free content first before investing big bucks.

What does your background look like? What are your goals moving forward?

Assuming you don't have 20+ years of experience in real estate investing, I would find the operators that do have that experience and investigate/underwrite each operator. This will exponentially increase your reach to thousands of potential investments without doing the heavy lifting. (I know at least at BAM, we underwrite 200+ deals before pulling the trigger on the one that meets our specific criteria)

Get to know each sponsor's strengths and weaknesses. See if you could get them on the phone and hear what mistakes they have learned from. This will put you way ahead in the game of preserving and growing that wealth bucket.

Good luck!