All Forum Posts by: Andrew Hogan

Eric, like the others have said, turnkey (and multifamily syndications) are great for those who don't want a second job and just need to put their capital to work without taking hours out of their day.

Most individuals on BP are looking to actively invest in their own deals.

Downsides to turnkey or syndications are that you won't add much value yourself and the upside is basically capped.

Hey Kushal, congrats on successfully triggering every syndicator's keyword search! lol

Know that while Self Storage can seem attractive, it is a LOT more price-sensitive to inventory. For example, if somebody builds a brand new storage a few miles away, your rent increases will equal a greater vacancy than they normally would for large multifamily.

As far as large apartment education. There are plenty of courses nowadays. But before paying a great first step to educating yourself is to learn by evaluating deals. Look at 50 to 100 offerings before you participate in one and you'll have developed a fingertip "feel" for what a good deal looks like. We are currently underwriting 200+ deals before finding the right one that hits all our criteria. 

Happy hunting!!

Well put John. Hopefully, the last market correction taught us that a recession doesn't care the slightest bit about bonds and stock market ratings. Somebody cannot say that a real estate investment is "crap" because it's not rated. That's like saying that apples are bad when they're not orange. Buying actual real estate or partnering with someone is different than buying a piece of paper that says real estate on it.

I think a sponsor's track record and their team's ability to execute is a good way to "rate" them in this world. 

You're probably right that the majority of folks on BP are looking for active rather than passive investments. It's a great place to become educated. 

For those few that are high-income earners and have too high of an opportunity cost, there are a wealth of sponsors on BP that they can underwrite before passively investing.

Hey Misty, you said that you want to grow your passive income stream but many of the things you mentioned seem very active to me. I guess it all depends on how much time your day job requires and what the opportunity cost is if you focus your time and energy on REI.

For many high-income earners, that opportunity cost is so great that they truly want passive investments and partner up with experienced sponsors rather than becoming operators themselves. 

Joshua, sounds like a very realistic goal! Theo and Greg gave you some great advice.

As far as markets go, colleges can be great but you don't want that to be the only driving factor. Look for steady job growth and population growth (at least 70,000 or more). A great diversity of employment, government, education, medical, tech, some manufacturing... Great school systems. A minimum median income of 40k or more.

All of these criteria can be found in a market with little research. Here in the midwest, we prefer to stay away from cities that have an immediate "boom" in population because we don't want to be there for the "bust".

Good luck!

There is no such thing as a dumb question! That's why BP is a great community.

Most serious operators end up with Fannie/Freddie (and HUD) because they will lock in low-interest rates for 30 yrs. (sometimes 3.5%). You can also refinance with them down the road if you choose another option initially.

@Albano with Cost Segregation, Bonus depreciation, and accelerated depreciation, many investors roll their equity into large mf deals to avoid taxes and diversify their allocation!

Agency debt is the end goal for any serious mf operator!

Adam is right, during the last correction defaults on small multifamily were 10X more prevalent than those of 50+ units.

Your investment is more protected when it has more units / possible tenants.

Welcome @Kenny Schumacher! Sounds like a good plan of focusing on your main income stream while building up the passive income on the side. We have 200+ units in Ohio and another 2,300+ throughout the midwest. There are some very attractive markets out here. Good luck!