All Forum Posts by: John Mazzella

@Nikko Tountas what you are describing sounds like a syndication. They can be complicated and will require that you have a team that has done it before. But for large multifamily purchases you can make a lot of money. Some of the more standard numbers today would be 7% preferred return for limited partners (investors) and then profit after the preferred return is split between the limited partners and general partners 70/30. If you want to chat more I am always happy to talk real estate.

@Antonio Coa I may be biased but I would suggest taking pieces of your savings and investing in a syndication. With a strong sponsorship team you will get the returns are looking for with all of the work that comes from actively investing in real estate. The big piece is you really want to trust the general partners of the syndication, the buy-ins to each deal are not cheap. If you want to chat more about the benefits I am always happy to talk real estate.

I would say it depends on your goals. First piece of advice would be to not pay off your condo, leverage is your friend and using those funds on other investments would be my plan. If you want passive I would go syndication. If you want be more involved in the day to day and build out a team and continue to grow in a market, I would suggest BRRRRing multifamily properties. This will increase your velocity of money and because it is multifamily you won’t be at the mercy of 1 tenant for all of your rent to cover the mortgage. Goodluck!

Is this acquisition manager part of the GP? If so they should be compensated by part of the acquisition fee and then a percentage of the return that the GP shares as part of the investment. 

If they are a W2 employee I would suggest a base salary with a bonus for each deal closed. It is important to not make the base too high or the employee won't feel a need to acquire deals. 

@Vincent E peters that is great that you have found syndicators who are willing to partner with you on a deal. Since you are looking for deals it would probably be helpful if you could leverage those sponsors track record. It is worth asking the sponsors if you can use their name and mention you are partnering with them when speaking to brokers in their markets. Good luck and keep me updated!

Hi Everyone!

I work with a network of syndicators that have deals varying in size, location and sponsor. Always happy to talk real estate and talk through some of the benefits of syndication and potential topics when vetting sponsors.

@Chris C. I would go syndication, while you would own 100% of the single family house you will also have 100% of the headache for an investment that you would likely want to be passive. There is a significant amount more work: find a broker, find a lender, find a realtor, find a property manager and find a contractor. You not only need to find them but trust them and that takes time, all of this work can be done successfully and your return be low. This can be due to turnover and vacancy of the property because it is only 1 unit and 2 months of vacancy can wipe out your annual returns. For all of these reasons and the ease of syndication I would go with syndication. If you want to chat more I am always open to talking real estate.

Best,

John

@Bradley R Stillabower if I am hearing you correctly it seems like passive income is a priority for you without the day to day management. I would suggest being a limited partner in a syndication, you get the benefits of real estate (high returns, hedge for inflation, physical asset, and tax benefits for passive income), without any of the day to day work. If you purchase a multifamily by yourself and hire a property manager you will still have to manage that property manager. In a syndication there is a dedicated asset manager who will oversee the property manager and you will receive reports (normally monthly with more in depth quarterly) on the assets performance. Hope this helps, if you want to hop on a call and talk about real estate let me know.

Best,

John

@Leah Klint congratulations on your successful deals! I work with a network of syndicators who have a number of deals open, they vary in size, location and sponsor. Happy to provide some additional detail if you would like. 

Best,

John

@Vincent E peters I would say to get your foot in the door you should raise capital. As I saw someone mention above it is helpful to know your target audience. In your case starting with firemen is a good idea. You are on the right track by networking with Syndicators. While building a relationship it is a good call to see if you can join in a deal as a capital raiser (along with other tasks per SEC rules). This will get you into deals to see the inner workings and you can start to gain experience and reference that experience in the future when speaking with brokers and lenders. I would suggest not working on findings deals unless you have a broker willing to work with you because they generally like to work with individuals they know can close deals. There is plenty to work on but capital raise is the best starting point. If you want to hop on a call I am always happy to talk about real estate. Good luck!