All Forum Posts by: Lanny K.

Safety first.  That said, my San Diego rehab is still under construction as my contractors practice social distancing.  One works on the second story with another on the first story and another outside.  The inspector is slower to respond but said he will be available this coming week.  I also pre-order the materials and have them ready for pickup before my runner gets there.  Hope this helps give you some ideas to keep things moving on your project.

@Erica Red cross I'm also in the middle of a multifamily rehab and initially the inspectors stopped working. However, last week inspectors were deemed essential in California so just keep calling. It may take longer to get the inspection done, but don't give up. Best of luck.

Hi @Connor Ryan,

Welcome to BP and to San Diego! Seems like you've already started down a good path. As a seasoned out-of-state investor I'd recommend you only invest in areas that you're comfortable with and have solid relationships. For your first few investments you'd be well served to focus on that. Also, for awareness, we seem to be near the top of the market so I'd caution you to only buy something that you're okay holding through the next down cycle.

Regarding San Diego, there's no way around it, it's expensive here compared to most of the rest of the country and we are taxed very heavily on top of it. That said, I've found owning a S-Corp and having rental property deductions help a great deal with the amount of money I'm able to keep in my pocket. Since you'll be renting your first year I recommend you find a good real estate tax preparation person and look into the specifics of your situation soon. See www.markjkohler.com for great informational videos.

Feel free to connect with me if you'd like to discuss this further. I certainly wish I had someone to help me when I was starting out.

Yours in Service,
Lanny

Hi @David Antunes,

I'm an investor and an active agent. Feel free to review my profile to get an idea of what I'm about and contact me if you'd like to discuss your goals and objectives further.

Yours in Service,

Lanny

DRE #02073062

Thanks for all the responses.  This is my first passive investment for a multifamily syndication deal.  The property is a B class building complex with just over 100 units located in a B class neighborhood in a large metro area with strong employment numbers.  The buildings need some light exterior maintenance and as tenants vacate the units will be renovated and the rents will be raised.  The collective group of partners includes a local multifamily Property Management company with 30+ years experience and multiple other General Partners.  There are two investment options Limited Partner (LP) and General Partner (GP). LP is a silent investor and GP is a participant in the weekly meetings required to manage the building complex.  If I'm able to raise enough funds, then I may earn a GP role where I can attend the meetings and add my vote.

All sponsors have skin in the game and our interests are aligned, and so far what I know is the GP compensation is upon sale/refinance of the property (estimated in 5 years which is likely to be during a down swing in the market).  The downside protection is the positive cashflow and the loan is for 10 years.  Not sure where the renovation funds come from yet, but that's a great point.  I'll look into that.

So far I like the property and the initial numbers, and more importantly the partners that I've met with thus far seem to be easy to work with and have been able to answer all my questions sufficiently. My initial post was intentionally broad because I don't yet know what I don't know about the pitfalls of a syndicated deal. Where do the partnership risks typically lay, etc.  Appreciate all the comments.  Thanks!

Hi BP,

I'm reviewing my first multifamily syndication investment for myself and a few of my investor friends, and want to ensure I properly assess this deal and fully understand the risks.

If you've done a deal like this I'd like to hear from you.  What worked?  What didn't work?  What would you do differently?

Thanks in advance!
Lanny

Hi Meng,

Wise choice to post your scenario here to solicit expert advise!  Given your primary commitment is to the Navy, you should carefully consider this investment and be 100% sure you buy it right.  To that end, given the possibility of getting orders within the next few years and owning an investment property in a down market.  In that scenario your investment could be at risk if you aren't able to make it cashflow after paying for all expenses including property management.

As a former US Marine, active real estate investor, licensed CA agent and property manager I'm able to speak your language and can help you avoid extremely costly mistakes.  Feel free to PM me if you'd like to discuss this further.

At the very least, just remember a real estate investment is only worth what it rents for.

Yours in Service,
Lanny

Hi,

My investment partners and I are in the process of qualifying a deal with multiple residential lots and mobile homes we believe are affixed to the land.  Ideally, we're looking for a lender with at least 20+ year amortization that allows a seller carry for the down payment.

The properties have a history of stable rent and each lot has it's own septic.

Any tips and/or lender referrals would be great.

Thanks!

Lanny

Thanks for the invite.  See you there!

Thanks for posting this, Derek.  Lynda and I will be there.