All Forum Posts by: Arn Cenedella

@Justin Goodin

Good point. 

I transitioned from SFR to MF in Spring 2020.

I am currently a GP on 6 deals totaling over 400 units. $50M AUM. 

I have NOT exited any of them. We got long term fixed rate debt on all acquisitions at an average interest rate of 4% +-  and with on average 4 to 5 years left on the note.

All properties are proforming well at or above proforma. We have paid every distribution on time in the amount projected or more. Many of these have increased in value due to increasing rents and NOI significantly.

I could sell these assets today and BOAST of a high IRR and equity multiple not to mention receive about $1M in GP promote for doing so.

But I won’t sell………

Because it’s not in the best interest of my investors to sell at this time. 

So I will skip the social media chest thumping for now and continue to do right by my investors while I am building a team of investors and partners for life. 

I’ll give up the short term thrill for long term benefit. 

@Cassidy Klundt

Assuming you are new or newer to MF, it would surprise me if you were in the market for $20M to $50M properties right out of the gate. If your price point is lower, hedge funds and large investors will not be competition for you. So wouldn’t rule out Dallas for fear of completion from big investors. 

I agree with of the factors previous commenters have stated. 

I’ll add another one - it’s logistics. How easy or hard will it be to get to your market. I would only select markets where you can get too easily and often if need be. All investors need to get to know their market and the players in that market. That takes time and a physical presence. 

I would submit market knowledge and easy of access outweigh the advantages of investing in the “best” market. 

If your price point is $1M $2M or less, my suggestion would be buy in Las Vegas because you live there and you theoretically know the neighborhoods. And you can be on site as often as needed. Las Vegas is growing no doubt. It’s perhaps not ideal due to its reliance on tourism. 

Dallas is a great market and there are plenty of others. But if you don’t know Dallas and buy a property thinking it’s a B area and it turns out to be a D, you have a problem. 

I am an Old School investor and believe in the fundamentals. Local market knowledge (more than what market) is the key to investing success. You need to know your market - where neighborhoods are trending and you need to be able to keep an eye on your property. Driving 20 minutes to be on site is far different than needing a 2 or 3 hour plane flight to get there. 

I have 45 years experience in REI and I only invest in my home market Greenville SC It's a strong market but it's not Dallas or Charlotte- but I live here I know it. My team is here. I have strong relationships with brokers PMs and vendors. Whatever I give up in "market" I gain from local market knowledge and easy access to the assets all within 30 minutes from my home.

As a newer investor, my experience tells me you will be better off staying close to home. 

@Rashawn Lewis

As @John Underwood indicates UCREIA is a great place to meet investors in this market. 

Most of the best SFR deals are done off market often via wholesalers.

Find some Greenville investing Facebook Groups to join. Network like heck and get to know the players. 

I'm no longer in the SFR space - now doing apartments - but either way Greenville is booming.

@John Underwood

Good work on Woodside Mill deals. 

You have been connected to this Greenville investor community for years and know the players. Your acquisitions will be difficult for a “newbie” to obtain. 

I presented at UCREIA last Spring on multifamily syndication. 

I am out of the SFR rental biz and only do bigger deals now.

Lots of ways to invest in real estate for sure. 

@Rashawn Lewis

Greenville SC is a great place to live and a great place to invest.

I moved to Greenville from Silicon Valley 9 years ago and love it. 

“Investment property” can mean anything from a single family rental house to a 200 unit apartment. 

I imagine you are asking about a SFR rental.

Price of course will vary greatly with location. 

You can probably find rental houses $150K to $200K. Average home price in Greenville is over $300,000. 

Greenville is more a growth market than a cash flow market. 

With a SFR rental, best one can do is break even with 25% down.

Hope this helps,

Arn

@Account Closed  Excellent point. And one often missed. I would like to clarify a detail. In a syndication, on the K1 the typical real estate deductions for property taxes, insurance, repairs, etc are accounted for on the K1 so the investor does get the advantage of these write offs in the sense they reduce rental income reported on the K1. So LP do get the advantage of these deductions to the degree they are used to offset rental income.

Here are some numbers to illustrate:

$100,000 rental income less $80,000 of expenses including depreciation leaves $20,000 profit.

In this case the investors do benefit for the $80,000 in expenses and depreciation as they are only taxed on the $20,000 profit.

On the other hand if the numbers are $100,000 rental income less $120,000 of expenses including depreciation for a $20,000 loss.

As you note, the $20,000 loss is passive and can’t be used to offset W2 income. It is carried forward on the taxpayer books until it can be used.

Bottom line syndication investors get the same host of deductions other real estate investors do to the extend they offset other rental income. Any loss above this can’t be used and is carried forward.

All these deductions are reflected on your K1. 

@Rovin Eyes

Do you mean Life Bridge Capital?

Whitney Sewell and team?

If so Two Thumbs Up! 👍 👍

I’m an LP in two of their deals and have been on his podcast twice to discuss my activities as a GP with Spark Investment Group. 

Will schedule now.