All Forum Posts by: Joe Archbold

Brad,

Diversification is key. 

Curious how you are looking to diversify?

Today via syndication you can diversify- with different operators; with different structures- single asset versus fund; different markets- the sunbelt,or midwest, etc.; or asset type- industrial, multifamily or Self-storage.

Over the last year, our group shared opportunities in each of these.

Glad to chat about potential ways to diversify your portfolio via Syndication.

Regards,

Joe

Kashif,

Congrats on your decision to consider Real Estate as an investment. Some good inputs here. I own and operate multifamily throughout Batavia, Aurora and Montgomery. This is hands-on active investing from over the last 15yrs. I also invest passively outside our market into AZ,TX, and the Midwest via Syndication.

Through Syndication you can leverage the expertise of others to provide excellent returns in the 10% range. This is passive investing as a Limited Partner in real estate.

We can see experience in Assets Under Management (AUM) or the number of full-cycle transactions (acquisition to exit) showcasing operational expertise and the outcome in ROI to investors.

Operational expertise in passive real estate investing is the ability of the operator to acquire the asset and execute the plan and increase the value of an asset through strategic execution. The approach generally includes fixing the expenses (cash going out) and improving the rents (cash coming in).

I see you are local- glad to share experiences, resources and connections.

Regards,

Joe

 Great post Jim .spot on. I invest both actively and passively. I am active in my market that I know extremely well and have been able to acquire assets that cash flow but take up some of my time. I also leverage The expertise of others and invest passively in real estate syndications throughout the country.

glad to share any info I can.

We are still seeing strong operators bring excellent projects throughout the sunbelt via Syndication. There is diversification in multiple investments in different markets, operators building Fund (several assets in one offering), or a mix of Self Storage and Large Value add multifamily.  Connect with a group with a proven track record, Assets under management or full-cycle experience.

With a Syndication you are investing in a group's ability to perform, their operational expertise, otherwise do it yourself.

Good luck,

Joe

Sounds like a good challenge to have.

Is there anything else driving the decision to sell? You have cash flow.  One of the biggest things to consider is your time and what its worth. 

Do you want to be an Active investor? Or would you rather leverage the expertise of others to provide consistent monthly cash-flow and be a passive investor?

Many Syndications have substantial tax benefits that might be worth exploring. We see operators setting up TIC structures to take 1031 funds in but this is for large investments generally.

One advantage to syndication is the ability to compound the invested capital. If the operator returns an average of 1.5X every 24-60 months and you redeploy the capital the math grows pretty quickly.

Good Luck

Doors do matter-  

Contrary to opinion, doors do matter.  If your intention is to be in real estate and grow a business that will include investors and partners then doors matter. Lenders, brokers and investors are more likely to be open to talk with someone who has some # of doors.

But to the investor who wants to be hands-free and not have active involvement then doors are irrelevant. Its about returns, diversification, and tax advantages, etc. whats the IRR, the equity multiple, and how long is the hold? will they 1031?

And yes if someone has 100-500-1000 doors unless their a Rockafeller, they are in a syndication either as Limited Partner or General Partner and share in the ownership.

I think the bigger question to investors should be- Can I leverage someone else's expertise to access a high-growth market, participate in a project with conservative underwriting behind it, and get a strong return for my investment? 

The LP route allows an investor to learn the process, see the Investor deck and know why the operator wants to acquire the particular asset. They should see the experience of the operator and their performance record. They will see tons of market data and comps. The business plan will include how the asset is financed and planned hold period. They will also see what returns the project is going to payout. All before making an investment decision. Lastly they will see the Private Placement Memorandum and the operating agreement. All part of the process.

In talking with investors they want to hear about the deal, the financing, how its being acquired, the team and their track record. not about # of units. 

Great question Brittany.

To see Syndication opportunities or "offerings", you need to sign up with and connect to individual operators, or with groups that connect to operators, and that is what we do. 

To protect the individual investor the SEC has made a pre-existing relationship a must for operators to share an "offering " to investors.

These opportunities have become almost word of mouth through connection or relationship.

Again, glad to help.

Joe

Brittany,

There are 506B projects out there. you just need to remember per the SEC, 506B offerings allow for only 35 non-accredited spots, so these are limited. Our group has had several multifamily projects open for non-accredited investors in 2022. You just need to be ready to act as there are fewer open spots. 

The operator has the choice to bring their project forward as 506B or 506C. 506C allows them to advertise but to accredited investors only. 506B allows the operator to add friends and family (non-acc), but they cannot advertise.

Glad to chat and share some past projects to give you some guidance. 

Regards,

Joe

Great question Don,

For me its 2 & 3. I own/ manage my own multifamily assets in my market and invest passively in R/E syndications with highly experienced operator in both single assets and Funds. I can add additional passive income, leverage their expertise, and diversify my holdings.  

As these are cash flowing asset with highly experienced operators, I am not focused on capital preservation. I am more focused on generating some income with some assets and larger equity event based payout with others.

I have not heard of them either, but there are a ton of operators out there. 

If you are considering them in this market environment, they must have some uniqueness that is worth considering.

The asset and market are important but the operator and how they manage the project are critical. And in this market, finanacing is becoming very important. 

Do they have experience in that particular market? Other assets under management there? 

Yes these investments take some upfront homework but once you are over the hump and sign the PPM your work is done and its up to the operator to perform.

Good luck with the due diligence.