All Forum Posts by: Percy N.

@Jenny Zhang what size (#units) apartments are we talking about?

We have seen 30yr and recently even got a 35yr amortization with 3yr IO, but the term for these large commercial loans (typically $15-$25mm) are generally 5-10 years with some extensions available. The longer the term, the more "yield maintenance" or defeasance will be required if you sell in a shorter timeframe (e.g. you get a 10yr term but sell in 5yrs might cost you 2pts on exit).

@Gabriel Hall, that is like asking which stock is better. As usual, the answer is - "It depends" on a number of factors.

Are you looking to manage these properties yourself?

What resources (financial, systems, personnel, etc) do you have in place?

Many of our investors (and ourselves) started out with Single Family but when we wanted to scale, switched to Multifamily. Our most recent acquisition was a Built-for-Rent community.

Each of these sub-asset classes will have its own mini-market cycle and will also depend on the local market.

Happy to chat and share what we are seeing in our markets (underserved markets in the Sunbelt) and why our investors are switching from SFR to Multifamily.

@Thomas Lebens for a syndication, each deal is in its own entity and should be treated separately, so the costs would be incurred again.

There may be some negotiation with 3rd party service providers on things like legal or tax prep, etc but generally, you see the economies of scale with a fund if you plan to do a lot of syndications.

The costs of the fund also depend on if it is an open or closed-end fund.

My recommendation would be to do a few smaller syndications before taking on a fund that has other admin complexities and it takes a bit to convince people to invest in a blind pool fund even if they know you and have done other deals with you.

@Thomas Lebens typically, the term syndication refers to a vehicle for a single asset investment and a fund refers to a vehicle for investments in multiple assets.

For a "typical" syndication, the cost could run anywhere from $15k-$20k with a $5k-$10k ongoing yearly charge. Blue sky filings can be in the $3k-$7k range depending on how many investors you have and where they are located.

For a Fund, it can range from $25k-$50k for the initial setup and $25-$60k depending on whether you use a Fund Admin, Auditor, etc. 

Reg CF or Reg A+ can range quite a bit.

As others have indicated, there are also other costs like marketing (for a 506c or Reg CF/A/A+), deposits for the deal and lender, etc which can run several hundred thousand into the millions depending on the size of the deal you are pursuing.

First, what is your definition of Private Money? Everyone seems to have a slightly different take on it these days.

The typical Private Money Lender can be found almost everywhere. The trick is you need to be able to identify and talk to people about the right opportunity.

I would start at your local REIA meetings and even BP has many PMLs.

Raising capital for equity investments is a whole different game and you should follow SEC regulations.

@Matthew Armstrong what was the specific challenge with you being outside the US?

Is the syndication raising capital for US based investments? Where are the LPs based?

SS&G are fund admins who like most admins have their own investor portals as well.

Fund admins are not cheap and can run $25-$50k/yr based on the services required.

For the loan, talk to local lenders and if the purchase price is between $1mm - $5mm, look into a small balance agency loan.

Smaller multifamily (< 75 units) has its own challenges like property management and making sure it can absorb any vacancies since you do not have significant benefits of scale.

Many revenue management solutions such as the ones we use leverage "AI technology" to dynamically price the leases based on market rents.

We have used AI for RE content, adwords, etc.

Next few years would be interesting as AI works its way into the real estate industry which has not traditionally been an early adopter of technology.

@Jim Pfeifer may not say it but I would also recommend checking out his group/community, Left Field Investors.