All Forum Posts by: Jeffrey Donis

It comes down to the numbers and which makes the most sense! Building is typically more expensive than buying however if it is a smarter play to build and then execute a business plan- then so be it. A lot of factors would help you make that decision-

What are competitors in the area doing?

Are there other projects going on? Is the area a good area to build in?

How big would the project be? How long would it take? Projected cost?

You would have to perform a deep analysis and then compare the two alternatives and then decide which would be the best move.

1 Vote

Originally posted by @Andrew Schutsky:

As both an investor and operator, to me building the relationship, trust, and establishing credibility with the track record of the team are of utmost importance. Of course the potential returns (IRR, COC, EM) will initially draw the attention of an investor, but what's more important is how they plan to balance the risks/returns such as assumptions in underwriting, how they plan to execute the business plan, and the track record of the management team.

As far as location: Personally I'm investing in areas of high growth across several markets within the southeast for some diversity.

Great points Andrew!

As a general partner in syndication deals, these are things that I would want my potential investors to keep in mind before moving forward in the deal.

Making sure that the team you work with are people who you can confide in and that has a good track record. A syndication team can be quite big so you want to make sure that you take everyone who is on the team into account when doing your due diligence on them. You can look at past deals that they have done and see if they met all of their expected returns and if the investors enjoyed working with them. Also be sure to invest in a market that you think has great potential and is doing well in regards to various different factors (Population growth, Economic diversity, job growth, Anchors in that area, Job diversity, Climate risk, etc). All of these things and more lead to a wise decision when choosing which syndication to invest in!

1 Vote

Originally posted by @Matthew LoPiccolo:

Good morning BP audience

I am new to the world of real estate investing, but am well informed of the construction side of the business. I’m seeking knowledge on how to “Go Big” for our first deal and am look at 100+ doors. Any insight/advise?

Matt

Hey Matt!

I recommend spending some time educating yourself on how to raise money as mentioned above- also check out real estate syndications. The first book I read was Joe Fairless's "The Best Ever Syndication Book".

Also being active on BP and reading any and all of the forums that interest you can help you gain more knowledge on the topic.

Networking is very key when you are new so keep that in mind!

Looking forward to staying connected!!

2 Votes

Originally posted by @Justin Goodin:

@Jeffrey Donis Indianapolis and KY. But open to major Midwest markets. NC and SC are super competitive! Good luck 👍

Thanks! You as well!!

1 Vote

Originally posted by @Steve Morris:

If by big operators you mean syndicators, here's why they're buying

1) They don't place it, investor money is on a rubber-band, it'll move to the next syndicator

2) They don't place it, they lose on future asset and prop mgmt fees

3) They don't place it, they lose the 2% they keep for income and appreciation

4) Tell me the other type of investment that is offering tax-sheltered returns better than CRE

5) Tell me the CRE doing better than apartments

6) Certain places like ATL, NC, MIA , Austin are darlings and only so much inventory so they need to reach

Great points!!

0 Votes

Originally posted by @Rodney Robinson:

@Keeley Hubbard

That is awesome. I have heard and seen examples of people saving many years (needed from experience) by learning proven models from mentors. I plan to do the same.

Yes! We have been going through several different sales calls with different mentors- we plan on choosing one this week! Had a call with a jake/gino rep yesterday and will have a call with the think multifamily team today.

1 Vote

Hey Lindsey!

Great to see that you are looking to invest in!!

I would recommend doing some market analysis on any and all markets you might be interested in. I am not in the Ohio market, however my team and I recently did move into different markets and we analyzed the area for the following information-

Unemployment, population, population age, job diversity, top employers and business, supply and demand, miscellaneous (research other characteristics relevant to the strength or weakness of a market).- some of many different things to take into account!

You can use these websites- to find that information-

Go to www.hometownlocator.com
Fred website
HUD User website
Just some of many!

1 Vote

Originally posted by @Brian Burke:

Depreciation offset some or all of the cash flow, most likely. But whatever depreciation was taken must be recaptured at sale. Depreciation recapture is taxed at a lower rate than ordinary income but higher than long-term capital gain—so ultimately there is a tax savings. It’s also possible that some of the gain upon sale can be attributed to the land instead of the structures, which shifts some of the recapture to capital gain.

Great points! Another thing to keep in mind is that the government treats buildings like it will only last 27.5 yrs from the purchase date. Once a new buyer arrives, this repeats.

However, you must deduct the value of land from this because land does not depreciate.

As previously mentioned, depreciation will offset most if not all of your monthly cash flow

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Great points! It is very important for all investors in a syndication to get the proper understanding of how the model works (for the protection of both the LP and the GP).

It is important that a potential LP be adequately liquid so that they are not putting themselves in a bad place financially if they choose to invest into a deal.

If an investor is new to to investing in syndications, a great idea is for them to ease into the investing by starting out with a reasonable investment and increasing it as their confidence grows.

It is always a good idea for anyone to have a cash reserves for a rainy day. Investing is very important if passive income is the goal, however being prepared for life's unexpected situations is not something to ignore.

Thanks for the value!

0 Votes

Hey Annabelle!

Great to see that you are transitioning into the multi-family space! We are based out of the NC market and there are lots of deals being traded here. Cap rates are low however there is still money to be made. I recommend checking out other markets in the southeast regions (GA, NC, SC, etc).

Best of luck!!1 Looking forward to staying connected!

0 Votes

All Forum Posts by: Jeffrey Donis

Jeffrey Donis has started 15 posts and replied 1176 times.

Post: Best to Build Multi-FAMILY OR Buy one ....

Post: What do you look for in an Apartment Syndicator?

Post: Go Big or Go Home 2021

Post: Are you an entrepreneur or a consumer❓

Post: Are big operators buying Apartments just for depreciation?

Post: Multifamily Courses - Brad Sumrok or Neal Bawa?

Post: Out of state Investment Ohio

Post: Taxation of Cash Flow/Equity Gain in MF Syndications

Post: Wall Street To Main Street - The Investor Mindset

Post: Looking to upscale to commercial multifamily