All Forum Posts by: Theo Hicks

Personally, I would focus on 4-units. Best of both worlds (multiple units under one roof with a long-term, fixed rate residential loan).

As others have said, larger investors focus more on capital preservation whereas the smaller investors focus more on the upside.

Create a landing page on your website for passive investors. Once they sign up, have them automatically added to an email list. Then, send that email list content on a consistent basis (weekly, biweekly, or monthly) that educated them in syndications and apartment investing (assuming you are wanting to raise money for apartments). Content can be as simple as an article about a new business coming to your target market or as complicated as a podcast or video you created.

@Charles Soper @Todd Nurnberger @Mike Taravella @Account Closed Thanks for the website, book, and Syndication School recommendations! Always great to hear that those are adding value to multifamily investors' businesses

@Chris Tracy @Mike Taravella Thanks for the book shout out! Glad it added value to your business!

@Brandon Williams yes, based on the money you have in the deal. But the 1% rule is just a quick "back of the napkin" calculation. I would recommend using the BP cash flow calculator to determine what the cash flow and ROI would be if you were to rent the property based on the current expenses and what you put into the deal initially.

Of the syndicators I know off the  top of my head that DIDN'T do a multifamily deal prior to syndicating their first deal:

• Three SFRs then a 160+ unit apartment syndication
• Raise money for other syndicators
• Worked for a large equity company
• Worked as an agent selling residential real estate
• A doctor who Invested in and ran the medical offices

My point? Doing a multifamily deal first is a plus, but not an absolute requirement. You just need to have proven yourself as a successful entrepreneur in some other real estate or non-real estate related field and leverage that success and the skills acquired to execute the syndication business plan (plus educate yourself on the process). 

And @Matthew Baltzell, thanks for the book shout out!

As @Alina Trigub mentioned, we need more details. Since there is a fairly signification upgrade, will the property cash flow from day one? What is the hold period? 

Typically, passive investors are offered a preferred return and an overall profit split. 6% to 8% pref and a 50/50 to 70/30 profit split (GP/LP) is common.

You would have had more success renting out the first deal than the second deal. It is hard to know without knowing how much rent you can demand, but if it is less than $2.6k (per the 1% rule), it probably won't make sense. I would consider selling and taking the proceeds to invest in a small multifamily (2 to 4 units).

Agreed. Mentorships are for those who are already in the real estate game and want to take their business to the next level or transition into a new niche they aren't familiar with.