All Forum Posts by: Omar Khan

@Diane Davis At the 6-unit level you don't need a cost segregation study. In all likelihood, the costs do not outweigh the benefits.

@Richard Lovering I wholeheartedly agree with @Joel Owens. For such low duration, it is not worth your time chasing 1-2%. E.g. on $100K, 2 months of interest at 1% is $166.67 or @ 2% is $333. Honestly, not worth the time, hassle and loss of brain cells. 

@Josh Thomas You're going to have trouble finding a good PM at that level. City Gate is used by a few friends and they recommend them a lot. But these are 200+ unit assets. 

@Jared Carpenter Great response, as always, by @Brian Burke. 

I wrote a blog post about this exact topic recently which should be helpful: The Promote – How the Real Money Is Made In Real Estate Private Equity

This should answer all your questions plus provide you with a working solution to compare/contrast different types of promote structures. 

I would say a fair number. I'm a GP on a number of deals especially because I run some of them :)

Entities can, have and do invest in syndications. Apart from the reasons the OP mentioned, some other reasons include: confidentiality, tax and estate planning, portfolio management, etc. 

As long as a managing member of the entity is accredited, the entity is considered accredited. HNW individuals, families and groups use this to transfer wealth, help their kids and/or introduce their network to opportunities which they wouldn't otherwise have an option to invest in. 10-20 years ago these deal were affectionately called "country club" deals because that's where they happened.

There is no gray area and neither is an investor being dishonest. 

I do agree with Brian LaPorte's articulate response. Just because you can do it, doesn't mean you should considering that the OP is not married.

Most sponsors have spots for sophisticated (but non-accredited) investors. These are usually given to folks whom they want to develop a long-term relationship with. Best bet: Develop that relationship, follow up and follow up again, assess them to see if they are a good fit and go from there.

The BF's father could cosign or be the managing member of an entity which invests in projects. There is nothing dishonest and illegal about this. A lot of people, especially those with more affluent parents/family, do this to invest into private deals where accredited investors are required. There is a reason why rich keep getting richer. 

@Samantha Miller There is a big difference being charitable and conscientious in one's personal life and running a business/investments. Your proposed solution would effectively end up bringing us to the same end point as @Neal Bawa solution of having a healthy diversity mix and avoiding war zones. 

Our role in contributing to a healthy society differs from our role as investors. We have no legal obligation to invest in areas where we do not get the maximum ROI.

Neal is only pointing out reality and what astute investors should be doing anyways. No matter what way we cut it, the end goal is the same: maximizing the ROI.

@Kevin Seder You don't have to like an area to invest in it. If the #s work and it is an upcoming area, do your research and pull the trigger. You don't have to live at the same place forever. Do your research but get started!

@Darren Mesibov These are all big markets and very easy to find lenders. 

You might want to check this blog I wrote on how to select the right markets: Choosing the Right US Market To Invest In: The 4-Step Guide to Success