All Forum Posts by: Gregory Schwartz

@Gregory Schwartz

It's really hard to gauge this question. 

I think that the attempt to scale super quickly is more dangerous than whatever the first raise is. 

A young investor with just 1-2 properties, 3 years into their journey could potentially be a great partner for friends and family. If this person raises $400K from friends and family to purchase a $1M 6-unit apartment complex, they might be a great potential partner. Especially if they put in $35K, or what amounts to most of the then total of their liquid wealth.

On the other hand, we saw experienced investors with really strong reputations scale from a few million to a hundred million, or, in some cases, literally billions of dollars, in AUM at the worst possible time between 2019 and 2021. 

I'd rather invest with the local 26 year old who lives in their second house-hack, drives their 10 year old car, and is raising their first small apartment syndication that they will self-manage, putting their own money into the deal, than some 45-year old guru who's secret sauce turned out to be their ability to charm on TikTok, but really, their approach to deals ended up being the "secret" to transforming $300M in real estate into $215M between 2021 and 2025. 

I can only comment on how I have done it.  First when I wanted to create a fund to buy court house steps.. I did the first 3 with my funds and showed cradle to grave.. In my land Timber days we just used bank LOC's but success in logging and creating substantial income allowed us to get those lines. Also keep in mind the 25k investors is the toughest one.. nervous take a ton of your time etc.. Investors that will go say 250 to 1 mil or more once you prove your experience are far easier to deal with and the only ones I personally interact with.

Personally I would not feel comfortable with raising money unless I've done 5+ deals within that asset type. I think there's many variables that will sway things like - previous deal sizes, price points, strategy(turn key or fixer upper) and who the person is raising the money. I am a firm believer that if someone raises money they should have some sort of experience and also financially have a strong foundation themselves. There is so many posts about complete newbies wanting to partner or use someone else's money and I think that is far too risky. 

Quote from @Gregory Schwartz:

Late rent plus lease violations. For me, that's a non-renew. 

But I have to ask, is this unit attracting this kind of tenant? 

The area is a rougher area (low-income, Class 3 city about 40 min outside downtown Pittsburgh, many drugs in the area, etc.) - but the other units have great tenants who take care of the place, are quiet, etc. One is a very long-term tenant (18 years) and the other for 2. They plant flowers, keep the yard nice, and I really enjoy them. I have my offices for our restaurants/real estate in the fourth unit, since it was a commercial space. I won't lie - I can smell the marijuana on certain days as well.