All Forum Posts by: John Mazzella

An LLC is not necessary when investing in syndication. The syndication LLC is created and you purchase shares of that LLC as part of your investment, so you are already protected.

@Vivan Bhalla I would say what you should do is dependent on the type of return, liquidity and control you want over your investment. Here are a few ideas and where they fall on the spectrum.

You can do a single-family value-add rental. It requires less capital to purchase and you can do a hard money loan to purchase and fix up and then refinance out at a higher value and pull your money out. Also known as the BRRRR method, that can produce high cash on cash return, decent liquidity, and complete control over your property. The only downside is that you can have a much lower return due to vacancy because it is only a single family.

You can house hack by purchasing a multifamily property living in one unit and renting out the other. This will allow you to save more since you won't be paying much for rent. A good option is a combination of the BRRRR and house hack which will allow you to get primary residence loans.

A third option is becoming a limited partner in a syndication deal. They offer high IRR (generally 12%+, with 8% at a preferred return), normally make disbursements on a quarterly basis and tax advantages by using depreciation to offset income from other passive investments.

If you have any questions please feel free to reach out.

All the best,

John

Hi Anne,

I have never invested with Whitehaven before, but I may be able to help you with a syndication deal down the line. I am part of a network of sponsors who are constantly bringing in new deals across the US. Would love to connect and learn what you are looking for in a deal and sponsor.

All the best,

John

Hi Jason,

I have never invested with Obsidian Capital before, but I may be able to help you with a syndication deal down the line. I am part of a network of sponsors who are constantly bringing in new deals across the US. Would love to connect and learn what you are looking for in a deal and sponsor.

All the best,

John 

Hi Michael,

I am part of a network of sponsors with a number of deals we are raising capital for. If you would like to connect and discuss what you are looking for in an investment and sponsor I can show you some of the deals we just closed and maybe we can help you out down the line. 

All the best,

John

Just wanted to echo the points made above, raising rents to the market is the only way to go. By not doing so you are not running your business effectively and anyone you end up selling to will end up raising them anyway. You aren't doing anything wrong by keeping up with the market, best of luck!

@Jeremy Toney for the number of units I would say it is dependent on the amount of capital you can raise. Obviously the larger the deal the more capital you will have to put together. Another part to seriously consider is the deal a high-value add property that needs a lot of rennovation or a decently updated complex that you can just push rents because they are under market, for your first deal I would stick to the latter. 

I also support jumping to syndication right out of the gate, I know plenty of individuals who have skipped right to syndication. It is important however that you leverage the mentorship and/or partnership of someone who has done it before. You will not be able to raise capital, get a loan or likely have an LOI excepted with 0 experience on your team.

As for markets to look at I can't tell you exactly which markets to look at but I suggest looking up Neal Bawa on youtube, he explains the best indicators to look for and how to determine what part of the cycle a market is in. He also has a free Udemy course which can be helpful as well.

If you have any other questions please reach out, good luck!

@Barry McCamant how is your real estate syndication business going? If you are still interested in learning more about syndication I am always happy to connect.

The first steps I would take are:

- Learn to underwrite a deal (especially a quick and dirty analysis as you will be looking at 100's of deals)

- Pick 3 markets you want to become an expert in (factor in population growth, job diversity, landlord-friendly, and new developments vs net absorption to start)

- Build a team of individuals who can bring skillsets that you are necessarily strong in. At a high level, the main parts of the deal are sourcing and underwriting as a part of the acquisition, capital raising, and asset management.

Hope this is helpful!

Hi Ali,

My advice would be to always buy for cash flow first. This will allow you to survive economic downturns and unforeseen expenses. With that said if you can buy for cash flow in an appreciating market that would be even better. You mentioned this is your second rental, if you have a team in place in your current market you may be better off continuing to grow their instead of starting from scratch in a new market. Hope this helps!

Hi @Benjamin Cohen, it sounds like you are ahead of the curve at 22. I would suggest continuing to post and network on BP and attend or even start a local meet-up.

One thing that might help with your networking is being hyper focused on the types of properties you are looking to get into. The networks you will find success would vary depending if you are trying to purchase 5 unit building vs syndicating 100+ unit apartments.

Hope this help!