All Forum Posts by: Ryan McGlasson

Recently since listening to an older biggerpockets podcast on a member who would syndicate large apartment buildings and any other deals they wanted to purchase I was really intrigued by the idea. A large reason because of the ability to start in real estate without any of your own money really. Which is essential because I do not have the net worth or capital needed for loans or investing money. So upon listening to this podcast and a few others I have become extremely interested in the niche. But in my quest for knowledge I gain many more questions! While I do have a basic understanding of how syndication is performed, I am not understanding key details that I do not seem to be able to find the answers to on the forum or the internet so I wanted to ask here for those who are more experienced, or have any experience at all or knowledge to share.

As a sponsor I am not putting money in the deal just putting it together and making the many moving parts work together. I hear often that it is a wise idea and completely possible to start in real estate in multifamily with a 16+ unit as a first investment because the bigger and more units the less of a risk, which I agree with. What I do not understand is how as a sponsor I can get any lender to loan me the rest of the cash. My understanding is to gain a non-recourse loan, the loan minimum would need to be $1,000,000.If this is the case then the downpayment at minimum would need to be over 250k for a 20% downpayment? Or is it 25%? Do i need to include the repair fee and closing cost with the downpayment? 

I have good credit but no liquidity, no 6-9 month reserves for a property that size and no net worth so to my knowledge a lender will never lend me anything no matter how good a deal correct?  Do letters of intent from an investor really do anything to negate not having those requirements? 

The way I have read around this is to have the limited partner be the one to sign on the loan in exchange for more equity. If this is a solution, then how does this change the sponsor-limited partner relationship? If the sponsor is the one who was supposed to sign for the loan but they cannot how does the contract still come together as me being a sponsor? Would they just split the title with the partners name on the mortgage?   Generally I know you wouldn't want to have an investor sign anything like that but this is a family investor who is willing, but still I would want a method to avoid that and have it signed to me if possible and the limited partners both on non-recourse atleast but then it leads back to the issue of how would I ever realistically get bank funding? Should it be avoided completely and look into hard money loans?   

Advice is appreciated and I thank you in advance. Just need a little nudge in the right direction and I am off.

Wow so you put the entire downpayment on a line of credit and did not use a dime of your cash?

When I had first gained an interest in real estate I was thinking the same thing to myself, that I would never invest out of state because I thought it was a foolish idea to not try your own backyard. After spending time on the forums and reading various books and blogs sometimes the market you need is out of state depending on your niche or requirements. Most states you should be able to find something at a 7% cap rate without much issue, just will be a matter of determining a city that meets the vacancy rates and cashflow you desire. Specific cities I am not sure on but some states are on fire more than others in general.

That is quite a large initial downpayment, is it a state law with lenders or a specific reason for it?

 Hello! Just passed by this thread because I am researching the Savannah market, you said your primary tenants are students? I am looking to rent out rooms in the house that I purchase and I was assuming most likely students would rent the rooms. Would you say students in that area are likely to rent rooms in a house rather than an apartment? If so roughly what areas are preferable to the local colleges?  I really appreciate any input! 

 I get the general idea of what you are explaining, I have seen that usually state taxes don't effect it too much but maybe it might be more of a factor with a larger investment. 

 Thank you for the input, I am actually doing an owner occupant loan so I would be leaving california for much more affordable markets for my first property.

I will check out those articles! Thanks again.

Hello everyone! I had a question I wanted to ask the general biggerpockets community because I felt it could not only benefit my self to know but others. When you are getting started in real estate investing or even if you have already invested in a city, what are your methods, strategies and criteria you research and look for to branch out and find new cities across the US to invest in that fit your niche? Not specifically the properties or types, but the cities or states themselves.

Do you have states in mind that you look into individually and then begin to determine potential cities?  Do  state tax rates and other local real estate laws influence where you invest?

What city characteristics do you look for or is it strictly cashflow numbers?  How else do you determine if a city or a rental will be rented out quickly?   Tons of questions I know! Just hoping to get a discussion started :)

 Oddly I was not notified this thread had more replies?!    And yes! That is exactly the plan, owner-occupant fha. 

@DJ S. Hello! From reading previous posts on here over a few months I have seen that many people invest and then get the RE license to get ahead on MLS listed deals or save some money haha. Great tip and it really does give a clue to what kind of agent they are.

 I really appreciate all the tips from everyone who commented! :)

@Alex Franks that is a great way to view it. Most markets are expensive and you just have to find the upcoming potential money makers!   Gastonia, concord, greensboro are all locations I have heard are still upcoming and favorable for investments. I had always heard mint hill was a great find, I think too many people know now to score a deal!