All Forum Posts by: Andrey Y.
Andrey Y. has started 114 posts and replied 1826 times.
Post: Has anyone done business with Four Peaks Capital?
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Originally posted by @Zach Zimmer:
Thanks for the update. I have eagerly wanted to get into this space..
I had a few calls with Sunrise that had some pretty poor answers / or lack of to my questions so was leaning toward Four Peaks since those conversations went better. However based on these experiences still seem too risky versus just going after some of the options with RealCrowd that seem attractive and proven.
Agreed. I don't get a great taste or feeling about the MHP sponsors mentioned based on this. I will stick with large funds of proven operators.
Maybe these are isolated incidents, but operators of MF and other assets seem to be more professional.
Post: Labeling yourself as "PM" instead of "LandLord/Owner" to tenants
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Originally posted by @David Klefeker:
Andrey Y. Thats a great point!
Although if its under an LLC then your protected and hidden. We buy all of our multifamily and single family properties within an LLC. With that said we also have a property management company we own to manage the properties. So we are not necessarily broadcasting that we are affiliated with the ownership.
I've googled property owners before and it's said:
Village Green LLC,
benefactor/under/etc. Joe Smith
You'd be surprised.
Post: How to calculate Passive Cash Flow for tracking your investing
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I was just calculating my cash flow related to real estate for 2019. The entirety of my real estate income and expenses flow through the same checking account. Usually about monthly, I transfer the excess cash to a savings account. So I tally all of these transfers for 2019.
For syndications (round numbers), I had 1 exit in 2019 that produced ~$6K of income and ~$20K of growth on my initial capital invested. My question is, should I be counting the $6K for the purposes of my cash flow, in terms of goal setting and seeing how much cash flow I received?
Should I calculate neither, either the $6K in preferred returns or the $20K in capital growth, or both? My thinking is that the $6,000 at the very least should be included. We invest in active investments and passive syndications for the purposes of generating income, so I think it would be way too conservative (and silly) to assume that none of our investments would produce cash flow in the future.
Sure, we can't exactly predict exactly how much passive cash flow the syndicated investments will generate, however we can be fairly certain that they will generate some cash flow. And, since this income was "realized" in 2019, I am including the $6K from this exit as cash flow for 2019.
Interested in the perspective of both LPs and GPs in syndications.
Post: Labeling yourself as "PM" instead of "LandLord/Owner" to tenants
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Originally posted by @Allie Dickson:
If your tenant/roommate gets saavy they could just look on the county records and see that you own the property. That might make them feel that you are dishonest and then you still have to live with them.
Bingo. All it takes is a google search.
Post: Turnkey is asking to ignore the appraisal value
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Originally posted by @Ahmed Youssef:
I'm I not reasonable for not signing my turnkey contract because it has this condition?
"If the property appraises for $120,000 or more the buyer agrees to purchase the property at the $129,950 purchase price indicated in this contract."
Do you find that condition common in turnkeys contracts?
Ask yourself.. who profits more from a SFH Turnkey transaction - The buyer or the seller ? It shouldn't take a lot of thinking to arrive at the answer.
Post: Calculating Passive Cash Flow for Goal-setting and Accounting
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Bumppp
I realized most people on the Western side of the world are probably sleeping
Post: Calculating Passive Cash Flow for Goal-setting and Accounting
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I was just calculating my cash flow related to real estate for 2019. The entirety of my real estate income and expenses flow through the same checking account. Usually about monthly, I transfer the excess cash to a savings account. So I tally all of these transfers for 2019.
For syndications (round numbers), I had 1 exit in 2019 that produced ~$6K of income and ~$20K of growth on my initial capital invested. My question is, should I be counting the $6K for the purposes of my cash flow, goal setting, and seeing how much cash flow I received?
Should I calculate neither, either the $6K in preferred returns or the $20K in capital growth, or both? My thinking is that the $6,000 at the very least should be included. We invest in active investments and passive syndications for the purposes of generating income, so I think it would be way too conservative (and silly) to assume that none of our investments would produce cash flow in the future.
Sure, we can't exactly predict exactly how much passive cash flow the syndicated investments will generate, however we can be fairly certain that they will generate some cash flow. And, since this income was "realized" in 2019, I am including the $6K from this exit as cash flow for 2019.
Would love your thoughts, guys! Interested in the perspective of both LPs and GPs in syndications.
Post: Paying a syndication sponsor's (high) travel costs
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@Greg Dickerson @Ben Leybovich @Dylan McCabe
Appreciate your thoughts and input, guys!
Post: Paying a syndication sponsor's (high) travel costs
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Originally posted by @Luke Miller:
@Andrey Y. let us know what the sponsor says. I'd be curious. For reference, my travel (before the deal closes) is usually limited to a couple thousand on the high end. For due diligence, I budget somewhere around $100/ unit for inspections and then a certain percentage to do the file audit.
I would imagine that there is a reasonable (in their mind) explanation for their costs, but who knows? I doubt they are using it for nefarious purposes like @Jay Hinrichs insinuating, but i've been wrong before.
That's the beauty of being an informed investor though, if you don't like the offering move on. No one is forcing you to invest.
The sponsor contacted me in private and was very upset that I shared 'confidential information' from the PPM, and they weren't okay with it. So it sounds like I am 'out of' this opportunity.
I was contacted by other players in this space, they said I did nothing of the sort because I didn't state the name of the sponsor nor did I share a copy of the PPM with anyone. Saying "this anonymous sponsor" has $250K fees for travel and DD isn't a breach of anything, and I'm happy that experienced commercial multifamily operators are telling me this.
If someone is totally comfy with the fees they are charging, I think they would be happy to explain it. Out loud. In public, even. It shouldn't be a big secret. This is just my opinion. Others are welcome to disagree.
I don't really want to get into specifics of their answer, as I am afraid this may upset them further. Potentially, people can deduce who the sponsor is if I talk about the types of deals they are doing? Anyway, out of respect I won't post those details in this venue.
I will only say that their justification kind of made sense, but I am still not totally clear that that entire figure is warranted. So, if I am going based on what @Omar Khan said above, definitely would pass on this particular opportunity.
Post: Who is buying in this market?
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Originally posted by @Mike Dymski:
Cap rate and return are unrelated (even if buying with cash).
Return comes from cash flow, principal reduction, and appreciation (and tax benefits).
Prices are inflated by artificially low interest rates. If we buy for cash, we pay the high prices without getting the benefit of what caused the high prices (low cost of debt). I am not referring to the cash vs. leverage debate. I'm talking about the total cost of REI (price + the cost of debt).
Many investors are buying and have mid teens for return requirements for passive investments and mid twenties and above for active investments.
Exactly. The biggest nonsense peddled on BP and by Turnkey companies is "high cap rate! 10%! 10% return!" Ughhh, no. High cap rate means lower quality asset, more risk, and more management headache.
Can't believe people still fall for this marketing. The higher the cap rate the quicker I run.
Lately, I have seen 15-18%+ returns on a favorable risk-adjusted basis, investing passively in syndications. Looking to liquidate my active SFH portfolio pronto. Not worth it to deal with tenants and property managers.