All Forum Posts by: Charles Kao

@Brook Boatman

Never too early to get started with your education. I got a great real estate education from my parents and waited patiently for my time so the ability to execute was very high. Make sure you have a high ability to execute via knowledge and or your team. If you have a great team they will likely help you with both your knowledge and acquisition.

@Maria Luna

Metro Detroit Investors are connected well

and its going to be hard to get people

to utilize you as PM knowing you will be learning on the job the different areas. Detroit is cheap but surroundings areas are not so much it just depends where. If anything you want to PM more expensive properties so why not PM in your area and then build that business up so you can buy more

property and build your sphere of influence? Your argument seems built around the low pricepoint so if thats the case I would stay where you are.

Operating a deal under a syndication that small is pretty tough because you are not getting any economies of scale yet your investors likely will want the professionalism of a syndication.  You may be able to operate it at a 12 cap if you were to run it by yourself, but things you may not consider that your investors may want that you have to account for our quarterly reports on progress, a bookkeeper to keep track of finances and provide oversight and the ability to call you whenever they want.  You may not be used to this as you may do some of those things yourself but your return on time shrinks because that is one of the only ways you can leverage an investor to get in on a deal this small versus a more reputable syndication.  Then you also have to raise from multiple investors so each investor stays under 20% so they don't have to guarantee a recourse loan.  After all that you are stuck with what?, 30-50% of a deal that is going to take twice as much time to manage because you also have to answer to investors?  I'd stick with a bigger deal to syndicate on unless your only reason for doing this deal is experience as a GP.  I have JVed multiple times where the investor simply invested because they wanted to learn the inside out of investing so while I have complete control over decision per our business agreement, I still run decisions and the thought process by them. They feel included and I have never once had them not go with my recommendation.  At the same time I have set some strong roots down for future syndications down the road because they have seen the return and the power of investing passively. 

On a daily basis, I have investors reach out to me for advice on how to get started or invest in certain aspects of real estate that I invest in, while at the same time I often seek advice from others.  Some are pretty creative, some are as bad as a waving of hands on Facebook.  I am curious what type of things have all of you both experienced and new investors done to get time with somebody you want to learn from?  I will start with mine.  I was discussing a multi million dollar deal with an investor that I met at bachelor party of a mutual friend.  Come to find out this investor actually put together 5 deals the year before with his smallest deal being a development of a 140 unit apartment complex.  I asked for his phone number waiting for a time I could provide value to him and reached out to him with an off market deal to convert and add two levels onto an iconic building in an affluent coastal town.  The deal was over my head at the time but all I asked in return was to keep his phone line open if I needed his help in the future if I needed mentoring.  Since then I have had no problem getting him to return calls or emails when asking for his guidance on our deals.

Welcome!  

@Braden Anderson

Street name or complex name

@Matthew Shay

Rules of thumb are great but they rarely apply to new investors. Pricing that I get in comparison to you or a billionaire are completely different. For example, a friend of mine paid 500 a kitchen for cabinets because they purchased hundreds of sets where I am paying about 900-1100 for the same size kitchen. Insurance as I've grown my portfolio has gone down even with inflation as high as it is for me by almost 40 percent in last 3 years. At this point evaluate as many deals as you can whether you buy or not and use actuals. Get actual quotes, don't make assumptions. Then you can form your own rule of thumbs. If yours are much higher that what you read in books ask an operator of similar size what they are paying. The experience and the ability of the operator is a must to make sure a deal stays a deal for these reasons.

@Josh Rogers Don't invest at all then. There is always risk including leaving money in savings account or in a safe. When money is not invested it loses it spending power due to inflation. There is no way that an investor can know 100 percent that a deal will not fail. If you want lower risk invest in a higher quality asset but keep in mind often your return is a measure of the risk.

@Jordan Lucas

I would work for a real estate agent or broker but but definitely not go straight to an agent at 18. You would have no sphere of influence buying houses, your parents friends will

still view you as a kid and I'll be honest I would

not go with a teenager no matter how qualified unless it was your parents I was trying to build a relationship. I value life experience in addition to work experience.

@Nathan Killebrew Its unfortunate but there is a good chance you will grow apart from those that you are friends with. Maybe someday they will take interest but when it comes to the life you live especially at your age its alright to be selfish. Later in life you won't have the same freedoms if you start your own family and as your current family ages. You don't have to cut them off but you can't lose focus.