All Forum Posts by: Jeff Greenberg

@Brady Carpenter Now what you just told me, tells me that you are not ready to do a deal.  You are emotionally involved with a property, but don't even have numbers.  What did you send to this potential partner?  You don't even have any numbers yet.  There are 1000's of properties near me that I would like to but, but the numbers won't work for me.

First rule to investing is don't get emotionally involved with the deal.  Love the numbers not the property.  From what you are telling me, you have nothing.  You have no idea what he expects to get for the property, nor do you know the rents.  You said nothing about the comparable rents in the area, and you have only answered one question that I previously asked.  

When I got that deal that I mentioned, I had been searching for three years, and getting educated while I was searching.

Get educated.  You have no clue what you do not know, and it is a lot.  I hate to pop your bubble, you are not ready yet.

Good luck.

My first ever deal, other than my personal residence, was a 20 unit syndicated deal.  How will you fund it? Do you have a plan?  Have you done the underwriting?  Do the numbers work?

@Ingrid J. not just between the broker, but also title, or lender.  Unless you are paying a flat fee, I would be a filter for all emails and only let the lawyer get emails that they needed to see.  I don't need them to be cc'd on every mail.  I learned that the hard way.

 This is probably the wrong thread for this question, but I do have a different take than @joseph Bramante.  I think that renting out the rooms to other students is a good way to start.  I would very picky as to who I have as my roommates and make sure the rules are in writing upfront.  All of his points are valid but they could also be avoided.

 Tom,

In this market, not only are we looking for mismanaged properties, but properties with significant value adds.  Maybe a 19070s product that has never been upgraded.  Upgrading the property could increase it value significantly especially where the cap rate is compressed.

I still do 506b offering as I run 2 different REI clubs and many of my members are not accredited yet. I like to help the new investors along, even though it sometimes means a larger number of investors.

 This is where the full time syndicator has the advantage over the part time investor.  We look at 100's of deals before we find one that is of interest to us or our investors.  Even though we typically have a tougher criteria for our investments, we still will see many more deals than the average investor.  Our relationships with brokers, PM's, lenders and other deal sources provides many more opportunities.  There is a lot of "stupid money" over paying for deals.  There is an expectation in many markets that the buyer will pay the seller for the value adds to be done by the buyer.  If the numbers don't work you don't buy

Wade the key is to be able to trust the sponsor.  Trust, but verify.  Very few investors ask for references, but from my experience, If you have happy investors, they are eager to share their experience.  Past performance is not always an indicator of future performance, but the way the sponsor handles issues is usually a good indication of how they personally perform.  I totally agree that being responsible for someone's retirement money is a huge responsibility.  For this reason we make sure that the deal and its risks are appropriate for the investor.  We do allow non accredited investors, but we request that they do not invest more than 10% of their net worth.  This does add a margin of safety for them.

Those wishing to be passive investors take on a huge responsibility during their due diligence prior to investing.  Once they have invested, they should still ask questions and have a right to see reports and receive communications as to the status of the deal.

@Joseph Bramante I agree with most of your posts, but I do disagree with a new syndicator thinking that they could jump into doing a blind pool.  Raising funds through a syndication takes significant credibility which is difficult to do if you cannot raise the equity.  So here is the catch 22.  Raising money on a business plan and no visible deal will have a slim chance of success.  

I suggest that new be syndicators find someone that is successfully doing it and find a way to be of service to them.  It may even mean coming in as a passive investor.  Listen to my pb podcast to see how being a passive investor helped me get started.  In the meantime, you network like crazy and tell everyone what your plan is.  Keep a list of potential investors.

Once you have some credibility on the coattails of a successful syndicator, you should be ready to do your own deal. Always be looking for a good deal and always be looking for potential investor.  If is a good deal and you are having trouble with the raise, there will always be other syndicators who will partner with you for a piece of the deal.  How large of a piece may depend on what you bring to the table.

All of my deals are syndicated with equity partners