All Forum Posts by: Andrew Hogan

Great insight Edward, 

Best of luck with everything!

Great question!

Don't know what your living expenses are, but let's start with about with about 4k/month. 48k annual means you'll need 480k of equity earning 10% or 685k equity earning 7%. I think your first step is to educate yourself thoroughly on different passive investments that produce consistent income. From there you'll need to learn how to evaluate managers/sponsors of those types of assets. Doing this will greatly reduce your risk of losing capital. Mitigation of that risk should be your chief aim!

Happy Hunting!

Looks like your question has been answered already. You're on the right path to understanding Chen.

Just keep educating yourself to develop a sixth sense of what a good deal / sponsor looks like in order to make the best investing decisions.

@Rafick Assenjee Virtually all multifamily investors "rehab" to some degree, but it depends how great your risk tolerance is. Deeper value add at this stage in the cycle IMHO is akin to what we saw in 2007/8. There's a lot more built up risk that the market will change and the equity invested goes poof! I'm also seeing many new sponsors overpay on deep value add.

At BAM we are value investors and the 1st, 2nd and 3rd rule is "don't lose money." There's simply too much risk at this stage of the cycle for the opportunistic model.

I'm excited for the day when deep value add is a good opportunity again but today is not that day. Even mediocre operators can keep properties in the black right now while the market is helping them. 

That's why we work so hard to find a stable asset that can still be improved through new capital and a more efficient management team that will still net a great return for the limited partners.

Good luck!

Hey Chris, 

unfortunately, single-family experience doesn't transition 100% efficiently over to MF. However, I'm sure that it will be easier for you with all the experience under your belt. There are a few different ways to go.

You could:

• Learn to underwrite deals yourself, start out small (2-4 unit), and go larger. 
• Transfer equity from SFR to larger assets. (Not always necessary to do a 1031)
• Find a general partner and learn about the deals they invest in as one of their LP's

Regardless of the route you choose, keep on educating yourself and it will save you lot's of headache in the long-run.

Good luck!

Principles of Real Estate Syndication by Samuel K Freshman is a good one

I feel you @Josh Eitingon! 

That's why we focus our investing on more landlord friendly states out here in the midwest! 

Farzan, there are plenty of passive opportunities for you to choose from. 

it looks like you posted this almost a year ago so I'd be interested to see any updates. 

I'd say to truly become educated on syndications, you'll have to evaluate sponsors yourself rather than getting self-directed/interested referrals. When deciding if a sponsor is right for you, you'll probably want to know some of the following from a potential sponsor:

• References (people who have invested with them in the past)
• What their team looks like. (how likely are they to execute?)
• Find out how they're leveraging their debt. (fixed rate? bank vs institutional etc.)
• Online info - what dirt can you find about them from a simple search?

Since you're specifically asking about retirement cash flow, you'll want to stay FAR away from heavy value-add and heavy risk opportunities that promise huge returns --especially at this point in the cycle.

Keep educating yourself until you get a fine feel for what a great sponsor looks like. 

Happy hunting!

@Farzan Setayesh

It's always important to speak with your CPA about specifics.

I know several people who didn't pay capital gains on the properties they sold because they invested in our multifamily deals within a calendar year. In essence, the new tax law allowed them to have the benefit of a 1031 exchange without having to go through the process. Happy to give more dets on a PM.

good points @Ian Ippolito. You're right that some crowd funders come with high fees and no track record.

@JB Park You worked hard to save that 150K, don't put it all in a home!

If anything, get owner financing (3.5% down) on a duplex, triplex, or four-plex while you educate yourself and can make a good investment decision. Flip out of it in a year or two. That solves the need for a home and doesn't put all the savings into something that doesn't produce cash flow. 

Keep it up until you can invest in the 506c offerings.

I watched this video from a mentor this morning and it's sooo great.

Grant's Financial Plan for Millennials

Keep educating yourself

Get a great network

Save 40% of your income

Spend money on income producing assets