All Forum Posts by: Sam Silverman

I personally use and refer Corey to all of my investors https://www.claconnect.com/dir...

1. Track record -- what is their history of performance, see full cycle exits in terms of actual returns vs projections. 

2. Have they had to do a capital call ever? This is asking investors for a second round of funding after closing the deal.

3. Have they ever missed a distribution?

4. Distributions and reporting -- monthly/quarterly

5. Fee structure (acquisition fee, asset management fee, disposition fee) -- what do they go to? If they are a one man stop, far less compelling to pay than if they have a full time staff where this is going to salaries and future ernest money deposits to win more deals in a competitive market. 

6. Preferred return and GP/LP splits (along with any additional hurdles based on performance)

7. What is the worst deal they have had? What did they learn from it?

8. What % of the capital stack is from the GP?

9. What type of loan product are they using and why? 

10. How long until first distribution?

11. What percent of their investors are repeat investors? If they haven't had a chance to have repeat investors it may be too soon.

12. How do they evaluate deals and with what assumptions? Rent growth, economic vacancy, renovation budget, exit cap rate etc

13. Flow of cash -- is there pref equity, different classes of shares etc

14. Always ask for references -- happy to help if I can 

Parker, most HELOC are based on the prime rate + some level of a premium -- this may be anywhere between 4.25-5% right now total depending on various factors.

The nice thing is that most products will allow you to pay interest only on the capital that you borrow -- this is very doable to cover interest with cash flow from an investment. In turn, all the principal balance growth becomes your profit and you can then reinvest that to truly make cash flow on top of the interest you are paying.

With $400k+ of equity, I would look to invest passively into fractional ownership of larger multifamily projects. 

In terms of cash flow, achieving 4-5% year one, scaling much quicker is doable, all the while your principal balance is aggressively growing during the reposition of the property. 

Your return on equity is slowly dying while remaining tied up in this property. An alternative would also be to get a line of credit or cash or refinance to then reinvest that capital.

If you are concerned with the liability of investing and owning property outright -- have you ever looked at investing as a limited parter?

This would allow you to be in a more recession resistant asset class and not have any liability outside of your cash contribution.

You won't need to file within the state as you likely have enough depreciation in the investment to counteract any cashflow that you received. Once that is more than the total depreciation or you exit the project, you will then have to file taxes in that state.

Send me a DM if you are looking for a CPA referral.

With $400k+ of equity, I would look to invest passively into fractional ownership of larger multifamily projects. 

In terms of cash flow, achieving 4-5% year one, scaling much quicker is doable, all the while your principal balance is aggressively growing during the reposition of the property. 

Your return on equity is slowly dying while remaining tied up in this property. An alternative would also be to get a line of credit or cash or refinance to then reinvest that capital.

I'd invest passively into multiple asset classes with the following breakdown:

50% Class B value add multifamily -- this class of asset has some of the highest stability and most institutional cash flowing into it. As home prices rise and interest rates rise (even if nominal and still below historically numbers), individuals budgets are being maxed out and they are forced apartment rents. I expect vacancy to continue to go down and cap rates to further compress.

20% Mobile home parks and self storage -- these classes of assets can typically produce higher cash flow than the above. Cap rates also have more room to compress as institutional capital will continue to flow here to chase yield. People may also look to sell off larger houses for a gain and downsize/trade into multiple homes.

10% Class A apartments with a value add component that is focused more so on smart home technology and amenities than complete unit renovations. Amenities should continue to be worth more and more to residents as work from home grows.

20% Luxury Airbnb rentals -- this would be both a lifestyle play and permanent cash flow. The goal here would be to hang on to these assets with fixed long term debt that can provide 20%+ cash on cash returns and the ability to spend a week or two in each area.

I am looking for local credit unions or banks that will lend 90-100% LTV on a second home in Arizona. This is a new purchase that I would prefer to not refi, rather a line of credit -- any recommendations?

I’m currently looking to meet with a few self storage syndications or operators. Ideally 1000+ units under management. I’d like to personally invest then potentially build a partnership on future opportunities.