All Forum Posts by: Luke Miller

@Zackarias Aitchison who did you end up choosing as a mentor? If you haven't made a decision, I can give my $.02

Hey @Angel Gracia that's a really hard question to ask. You're in the commercial section, so that means 5+ units and there are different answers for both. with residential, it's much more locally focused. You need to make sure you are well positioned for a potential down-turn. For example, when it's a 'renter's market' you need to be in a good location with competitive rents. 

I don't think anyone is going to do the research for you and pick a spot for you to invest. 

Besides, one person's perfect area might not fit your criteria. I'd focus on what you want out of the investment (cash-flow, appreciation, location, possibility to redevelop, etc.) and then find out which markets are right for you. 

The "real estate guys podcast" just did an episode on market selection, i'd listen to that. 

@Ricky R. The problem with all calculators and spreadsheets is that it should never be used as a calculator. Multifamily is incredibly complex and if you don't understand the metrics or calculations behind it, you're going to get burned. if you're just plugging numbers in until it "goes green", you are either going to miss out on deals or buy something you shouldn't. You want the ability to create your own spreadsheet even if you never do. 

@Chad Kirchner I was in your position a while ago. I wanted desperately to leave my job. The only regret I have after leaving was that I didn't hustle harder on the side while I still had stable income. It's a romantic idea to leave your job, but it's also scary. You are the decider of your day. It's really easy to under work and over work. Feel free to reach out with more questions. 

@Dominic Dilello be careful using spreadsheets as "calculators". Meaning, you should really understand the calculations behind the metrics before pulling the trigger. The worst thing you could do is plug in numbers, get the "green light" and assume you're going to succeed. Unfortunately lots of people are doing this right now and they are going to get burned.  Like @Theo Hicks said, i'd try making your own first and then look into other spreadsheets. 

As a syndicator, I don't really understand this model. If i'm using an institutional partner for capital, why would I also accept individual LP funds and not require them to raise everything? Unless the money partner is trying to stay under the 50% rule to avoid being underwritten, I don't get why the sponsor would go through that much effort. Can someone smarter than me explain this method? @Greg Dickerson

Hey @Tikvah Schlissel To answer your question, you can find several syndicators here on BP, but the best way to learn is to read books, listen to podcasts, listen to people who have done this for years, etc... 

Like others have said, $50k is usually the bare minimum syndicators will accept. However, one of my initial questions when talking with folks is "what will happen if you lose this $50k?". If your answer is something along the lines of being devastated or going bankrupt, I won't accept your investment. I need people in deals that understand real estate is not guaranteed and there is the possibility that you'll lose money. 

In my experience one of the least understood fees is the acquisition fee. I've heard other syndicators stumble through trying to explain it to an investor and it's because they hadn't actually done a deal yet. Once you see how much work goes into finding, underwriting, researching, funding, and getting a deal across the finish line, you'll easily be able to articulate why this is necessary. I've gone so far as to break it down to an hourly wage on one deal and it really put it into perspective for investors. 

@Amanda Tompkins I would take a step back and first figure out who you want to get involved with. There are a lot of great operators, but there are also a lot of lousy ones. You need to thoroughly vet anyone you're going to partner with. 

From there, you can raise money for someone's deal, you can put down an earnest money deposits, you can sign on loans, you can put together investor presentations, etc... All these things need to be done and if you can get good at it, GP teams will reward you with equity. It's all about finding where you can fit in and contribute to a deal

Hey @John Aliasso I'm in Denver. I've done flips, rentals and now large apartment communities. Let me know if you want to chat! I know that @Dan Mackin hosts a meetup in Erie if you're looking for a place to network.