All Forum Posts by: Luke Miller

@Rebecca Stuelpnagel was that vendor suggested through your management company? If you're not already a member, look up your local apartment association. If you join, they usually give you a membership book. I would guess that there is a pool gate/fence person advertising in there. Most of the time they give discounts to other AA members. 

If your goal is to scale, don't pay 100% for anything. Leverage, leverage, leverage. It will allow you to maximize that dollar. It's not a fun process doing a 1031, but I would try and put it into one larger property. 

@Account Closed depending on how your city looks at zoning laws, it could be a residential structure with an accessory dwelling unit. If there is no sewer, then I doubt it would qualify. If there is no sewer/shower then it wouldn't be a dwelling unit (what I assume you mean by facilities)

From a lending standpoint, even if they looked at it as a commercial property, they would still pull comps. Something that unique will require a comparable appraisal even if it's just a BOV.

@Daniel Rivera I hate using rules of thumb for things like this. It's okay to get a general idea if you're even in the ball park (price wise), but never depend on it. I've seen markets swing from 45% to 60% expenses (based on gross rents). 

A better method, and not that much harder, is to find a quality property manager or two, and ask them "what is your average annual operating expense for an asset like this". Good PMs know almost exactly what it costs to run a unit on an annual basis. This goes without saying, but finding a PM that specializes in the asset that you're looking at is critical.

For properties that are 100 years old, i'm guessing they are urban, in established and progressive cities, and have complex infrastructure. I would say that you need to determine (in no particular order) regulations on rehabbing, sewer/tap condition, asbestos, mold, whether you're in a historical location or not, landlord/tenant laws, gas line condition, etc... all those things can be detrimental to your expense line.

Hope this helps a bit. 

Looking forward to being there! Glad I got my ticket. 

Hey @Ian Ippolito way to lay it out and give a quality answer. @Bishan C. listen to this. As a sponsor, I expect these questions and any quality sponsor will have answers to this ready to go. If they waiver on any of this stuff, it's a good idea to dig deeper. 

Ian, what do you mean by portfolio matching?

@William Coet what's your reservation about having ill-liquid funds? Is it in case of emergency or you just want to use those funds to invest further? 

If it's in case of an emergency, as @Jay Hinrichs said you can sell your shares. You might not recover as much as you'd like, but at least it's an option.

If you're trying to borrow against the funds to invest in a different way, I doubt you'll find anyone to lend on it. Look at it from a recourse standpoint, how is a lender going to collect? They like physical assets to recover money and you have only shares. 

@William Coet to be completely honest, it can't be easily. This is something that has been a tough hurdle for some investors I've talked to. Frankly, there is a possibility in any investing type that you'll lose your investment - that's something all investors need to think about. There is no way to account for all economic, market, political variables that could play into a large scale syndication. There are guarantees in investing.

However, there are easy and basic steps you can take to ensure you're lined up with the right person. @Brian Burke laid them out very well. 

I would also add that background checks and SEC violation checks are common and, although awkward to ask for, any person of merit should have no problem with this. 

Hey @Eli Mills JV structure is definitely ideal, but it might not be legally viable. Look into the difference between syndication and JV partnerships and pay attention to if your partners will be active or passive. If you're promising returns and they are expecting a passive relationship - it doesn't matter if it's cost prohibitive - you're selling a security. That's how it was explained to me.

@Jonathan M. I feel you, man. I dabbled in small multifamily for a while and it was tough going. The properties were smaller, older, in worse condition than in larger assets (at least the ones i'm looking at). As @Scott Morongell said, getting rid of your limiting beliefs is a good thing! However, equally important is getting rid of the tunnel vision of getting retired as quickly as possible. 

A good way to start in syndication is to raise as much as you can for another sponsor's deal. You'll be part owner and get tons of experience. However, it is likely that you won't raise a ton of money and your ownership will be very small. You'll maybe make a few grand in cash flow per year. That's not life-changing money. However, stack a few of those, start to get bigger pieces of the pie and you'll make decent money. Syndication isn't this secret that will make people rich, in my opinion syndication is so attractive because it allows you to get into professional, more stable, assets that are much lower risk.