All Forum Posts by: Tj Hines

@Joseph Henderson look on loopnet to connect with brokers who have the most listings/inventory in your market. Get them on the phone. Let them know exactly what you're looking to accomplish. One thing is, you can't sound like a newbie. Brokers are trained to sniff newbies out. This topic comes up quite a bit on this platform. I'll be creating a post addressing this specific situation with a script you can use to give yourself instant credibility

@Kent Ritter, never show any signs of desperation! Always let them know that YOU want to take it one step at a time to nourish the relationship so that it can flourish. It's all about educating them to make sure they fully understand how your business model works and how it will benefit them.

Also, let them know that YOU don't work with everyone. It's about figuring out what their needs or wants are, so you can see if you have to offer may fit their needs. Hopefully this helps. Good luck

@Shamus Gamelo, first and foremost figure out WHY the homeowner wants to sell. Are they distressed? They need to get out now? Relocating maybe? The deal may not make sense depending on what they're looking to do. Are they looking to sell retail turnkey? Would that fit your business model? A lot of questions need to be asked before even determining it's worth buying or not. Of course we don't know whole the situation. You do. But if you don't, take the time to figure the situation then create the solution. Hopefully this makes sense. Good luck.

@Levi Floyd, it's a transient tenant base. So it makes sense if it's in a college in town. Figuring that your maintenance expense will be well above average because of the demographic, as well as unexpected turnover when dealing with such a transient tenant base. Me personally, I prefer more predictability. Stable tenant base affordable work force housing. 

@Robert Zazac

Through research, some things that have come up are portfolio lenders,
commercial loans, partnering, co-signers, Personal lines of credit, and
creative financing. 

(This is your answer to your own question, if you personally don't have the entire DP to bring to the table)

@Kent Ritter

For those passive investors out there, which matters more to you - That your sponsor has money in the deal or that he/she has a successful track record?

Both preferably! Yes and Yes. With that being said there are new operators that have surrounded themselves with a team with all the credibility they need to run the ship. I think the biggest thing from a passive investor standpoint is the character and credibility of the sponsor.

Do the sponsors have any previous business experience? Were they successful? Do they have any skills or traits the sponsor can easily transition in this space?

Track record and skin in the game is good, but at the same time credibility and character are everything.

@Markus Jackson

haven’t completely mastered the craft of Structuring private money deals. && I don’t want to risk losing their interest. I believe I should at least offer them a sample deal (which I am learning)of what could be beneficial to them in the near future(1- 2 months when we find a deal)

(Having a sample deal package ready when you're meeting one on one with investors preps and seasons them for future opportunities that may come down the line when you're ready to lead a syndication on your own with your partner. Since you have access to high net worth individuals maybe you and your partner should considering partnering with experienced operators and bring those resources to the table and now what happens is ... you go bigger and further now. You learn much more by being with an experienced operator. Not only that but you use their credibility to help sell the deals to your investors. You use that deal as marketing tool to attract more investors. It's easier to sell what you're doing if you're actually doing it. Plus as i just mentioned you will attract more eyes this way.)

Are there any suggestions or things I should mention or look out for in various initial interactions to cultivate a strong investor list.

(It's all about the investors never about the sponsor. This is the mindset you need to have going in. Find out what their needs are? Are they investing in anything now? Is it working for them? Are they happy or just merely satisfied. Can Markus show the investors something that can be just as or more beneficial that can work for them? Can you educate them on asset allocation and diversifying into alternative investments such as syndications? The questions you ask will give you all the answers you're looking for to know whether you can assist them with their financial goals.)

@Jon Guy if your strength lies in the area of sourcing and finding deals - whether you know it or not. It's super valuable. Most people don't have the time as being the boots on the ground and compile all the research to make an educated decision to move forward with the deal or not. Try networking at local real estate clubs in your area. Build relationships with those who are looking to partner with others that are more active in the business. These become good prospects for you to nourish and cultivate the relationship for you to do business with in the future. Good luck on your journey

@Scott Morongell It really all depends on the deal and the operator. There's no one specific way. We prefer the 70/30 split with a 7% pref. and if the deal can't work with those metrics then we may see what a 75/25 or 80/20 split looks like with the 7% pref. You'll see a ton of different structures spreadout across the board including waterfalls. I do like @Ola Dantis and the structure he explained. That's pretty unique. Essentially you want to make sure that the investors interest are more aligned with a performance based model. I've also seen no pref models, but the sponsors tend to contribute half of the capital in the deal.

@Forrest Baker I have a few contacts in the market of San Diego. Feel free to PM me and I will connect you. There are a few meetups out in Cali that focus on out of state investing because of the same reasons you listed.