All Forum Posts by: Theo Hicks

Hi Zack,

Great advice in this thread so far. One thing I would add is to determine if you are going to do everything yourself or if you are going to bring on a partner. As you learn more about the syndication process, figure out which roles you want to fulfill based on your interests and past experience. If there is something you don't want to do or something you don't think you would be good at, you will want to partner up with someone. For example, maybe you have experience asset managing deals, finding deals, and underwriting deals but have no idea and no interest in raising money, then you will want to partner up with a money-raiser - and vice versa.

Hi Zack,

Are you looking for a paid mentorship program or someone to mentor you for free? The approached are different. Ultimately, someone will only mentor you if you are able to add value to their business. For a paid mentorship, that value is money, so finding a paid mentorship will be easier. A lot of active apartment syndicators on BP also have their one consulting programs. Finding someone to mentor you for free is a little bit more difficult because you will need to find a way to add value to their business besides paying them. 

In regard to what to look for in a mentor (paid or unpaid) is that they are actively doing deals, are one of the main GP (not someone who has a minor role in a deal), offer a proven system for you to follow, and offer the connections you need to complete a deal.

Hi Dawn. As you mentioned, the why is important. But your experience (or business savviness), risk tolerance, and time availability are also relevant. 

If I had little to no time available, I would passively invest with a seasoned investor (like in an apartment syndication). If I had a lot of extra time on my hands and have proven my business savviness, I would take a portion of the $500k (maybe $100k to $150k) to acquire a multifamily with a 25% down loan and manage the property myself - this is sort of how I got started. After a year of success, I would acquire another property.

Ultimately, you need to first determine if you are going to be active or passive.

If I saw a T-12 with an expense ratio of 25%, I would assume something is wrong. 40% to 60% is more likely.

Yes. You can acquire the deal for 3.5% down and have a place to live.

I would work with a mortgage broker rather than a bank. They will go out and find you the best loan program based on your experience, the deal, and your business plan.

Out-of-state investing requires a strong boots-on-the-ground team. So, once you select a location, the next step is to find a realtor to find properties and a property management company to manage your properties.

Turnkey investments can be great or horrible. All depends on your goals. 3 units for $79,000 doesn't sound like a turnkey property though. Would need more information. 

Unless you are doing 506(c), you aren't allowed to cold call investors. And even if you are doing 506(c), if you haven't done a deal before, why would a stranger invest with you. The best way to start raising money is from family and friends with which you have a pre-existing relationship.

I've heard of a property destroyed by a fire or weather event (can't remember which one) and the insurance company didn't payout.