All Forum Posts by: Paul B.

I made my first investment into a MF syndication for $25,000. But the sponsor let me in for below the minimum because he knew it was my first time. You just have to build a relationship with the sponsor, which is not only good practice, it's actually required by SEC regulations. Find local MF groups and you can start networking there...even though there aren't many live events happening these days, there are some virtual events, so you can still build contacts.

I agree. I occasionally would hear opinions that 2008-09 was a once-in-a-lifetime event and the next recession will be more mild, plus it will probably be caused by something other than housing, implying that multi-family won't fare as badly as it did back then, which wasn't bad at all for some operators in some markets. Well, this crisis seems to be another "once-in-a-lifetime" thing.....only this time, the people affected most are often the types of people living in Class B/C apartments and paying rent.

Another macroeconomic trend to consider is immigration. It's the reason the population of this country keeps growing, but will it slow down now?  Possible causes for a decline would include travel restrictions, fewer jobs, or just a change in policy for political reasons.  

Brad Sumrok is a good source for education. It's pricey to become a student, but his weekend events are affordable, and you can learn quite a bit and decide whether such a program is for you. There is one this weekend, online.  

It may not be a requirement, but it's a huge factor! I think it makes them much more credible. But still, everyone needs to ask themselves if the advice applies to them, and is it still good advice for today. I invest in apartments. There were many apartment complexes that actually did better in 2008-2010, because people who lost their homes needed somewhere to live. Does that mean apartments are always safe, because they got through the last downturn? No! This crisis is particularly impacting the types of jobs that are filled by tenants in certain classes of apartments. 

I own a condo in an expensive market, where new construction is relatively limited, and I believe there will always be demand for condos there because the price point is less than a house, and there will be people who cannot afford a house.

I would be more careful in a market where there is always new construction nearby, because a new condo will be outdated in the future, which isn't a death knell, but it does mean that you can't count on value or rental income always increasing.

Others have already mentioned the HOAs. A well-managed HOA can mean the maintenance costs are lower (when compared to a house), because there are economies of scale, and the major costs (roof, foundation...) are spread out over many owners. The catch is that many HOAs are not well-managed.

 I may be guilty of that (voting for the heavy hitter more often)....maybe I just am being appreciative that someone with so much experience is taking the time to offer their wisdom. But there are unintended consequences, for example someone might assume they are always right, which is dangerous. 

Ha! There was a good chance I was going to cross that elusive 7-figure mark this year, if the party continued, but alas, with the stock market decline and a few property sales up in the air, it's ain't gonna happen. No big deal, I usually invest in 506(b) offerings anyway. 

A GP who has been through the last recession and didn't lose any properties is definitely an advantage, but as others have said, it still doesn't guarantee anything, and the circumstances here are different than the last downturn. Some areas actually saw apartment rents increase in 2009-2011, due to all the demand for rentals from former homeowners who couldn't pay their mortgage and lost their homes. Today, it seems there may be challenges collecting rent everywhere. April collections looked good at many properties, but it doesn't guarantee May will be the same. 

Since a GP's track record is so important, and many people say the GP is the single most important factor when deciding whether to invest, there is an obvious question: why would anyone ever invest with a new, or less experienced GP? I'll play devil's advocate and give a few reasons:

1. New GP will take longer to raise money than an experienced one, and will have more time to answer your questions and walk you through any concerns, if you are a beginner or just are the type to really dig into the deal (which every investor should do). The most experienced GPs get fully subscribed in a matter of days. Sometimes they get enough verbal commitments in a few hours. 
2. New GP will structure their deal in a more investor-friendly manner, with a larger share for investors and fewer fees. An experienced GP has earned the right to take a bigger cut, or better said, the market allows it because investors are more confident in them.
3. New GP may have a lower minimum investment, which is appealing to a first-time investor who can get their feet wet at a lower entry point. Why? Because a new GP's deal tends to be smaller, so the capital raise is smaller. Also, it will take them longer to raise money, so they will be more flexible on accepting investors. 

I'm not making a case that you should always favor the newer GPs. In fact, I actually agree with the conventional wisdom that the GP's track record is critical. But I have also invested with less-experienced GPs, and I had confidence in them because they were mentored by a more-experienced one, and in some cases even had someone more experienced on the GP team. 

My March distribution on the second fund (10%) was paid a few days ago, but the amount was slightly less than expected. It's supposed to go up a bit each month, since I have it set to reinvest the distribution. 

I haven't received anything on the first fund (12%) and usually that one shows up on the 12th of the month.