All Forum Posts by: Spencer Hilligoss

just registered. looking forward to it. thanks for setting all this up @J. Martin!

@Brett Richardson - hi Brett! I'm a strong believer in coaching programs for the right student.

If you survey the landscape of coaching program graduates, a consistent theme emerges: those that "make it" tend to have the drive, curiosity, passion, grit, relience and focus to weather the journey...  vs. a high-impact coaching program that makes it a cake walk.

I think this is an important call out and something worth reflecting on, before you (or anyone else) invests $x,xxx-$xx,xxx. I was told that this was helpful when I mentioned it on another thread, so here's a copy/paste. These are the things I did before I paid to join a CRE coaching program:

"Here's how i got started in commercial real estate:

1) read 24 books on the topic

2) listened to 400+ podcasts (starting with BP.com)

3) attended meetups and starting learning the lingo"

I certainly went overboard on the podcasts, but you get the point. I recommend putting in so much work that you can convince yourself that you truly want to walk this path, longerm. Then drop funds on that big coaching price tag.

Happy to chat more offline at some point if you any any insights on the programs i've used in recent years. Best of luck in the search!

@Jeremy Dalatri - hi Jeremy!

Step 1: Define why you want to go big. Example: Looking for a target cash flow number per month? Ok, how much? By when?

Step 2: Define what it means to "go big." "Big" is a relative term in real estate. Example: A quad is 'big' to a single family investor. A quad is 'big' to a large multifamily investor.

If steps 1 and 2 are too challenging to answer (and they should be!), it's a helpful indicator to keep reading to books, listening to podcasts, engaging on forums like this and talking (in person) with members of the community... until you more clearly define your WHY and WHAT. Best to do these before you just into action.

Good luck!

@Yonah Weiss - I was recently pointed toward the works of Keith J. Cunningham by fellow investor I met at a conference.

I'm working through The Road Less Stupid and am enjoying it thoroughly! Makes a strong case for baking in thinking time to your regular work cadence. More thinking time = better strategic decisions.

@Brad Kelly - I think @Todd Dexheimer nailed it. A "good deal" is in the eye-of-the-beholder.

That said, it sounds like you're in the foundational stages of building your education. That's an exciting stage!

Of the 24 books I devoured when I first jumped into this business... there were a few that hit specifically on the topic you're asking about here. This was my personal favorite book on the topic of "which KPI's matter?"

What Every Real Estate Investor Needs to Know About Cash Flow

@Travis Gibson - you sparked a great thread, here. thank you for stirring up insightful discussion! A couple thoughts:

Step #1 - keep the rentals and harvest the equity for redeployment - both @Kevin Dean and @Michael Ealy mentioned this approach. This would be my preference, if I was in your situation. In our case, we focus on multifamily (passively investing and actively closing on deals)... but we have decided to hold on to our modest residential portfolio, longterm. They are cash flowing and we don't see an urgent need to sell them. If they were paid off, like yours are, we would be refinancing right now to take advantage of the rates currently available.

Step #2 - set goals (long term) and specific investment criteria - to your question directly above "1.) How many doors do I really need to gain the necessary MF experience? Would something as small as a Four Plex work?"

• I wouldn't necessarily recommend focusing on this question, initially. But since you asked: No, a 4-unit deal would not be considered relevant experience if you approach potential partners and lenders if/when you decide to take down a 100+ unit apartment building.
  
• At a bare minimum, you would have to target a 5-unit... but if we're focusing on 'how many is too many,' we're kinda missing the point: the first step should be to set goals and then let those goals drive you toward clarity on next steps and property size/type.
  

Regarding investors: I think it's always a good time to build new relationships and strengthen your network, but until you have either a 1) real deal to talk about, or a 2) a model/mock deal that reflects a similar deal you expect to find... then it sounds premature to approach investors about equity capital.

Recommend heeding the wisdom from @John Corey @Lane Kawaoka @Chris Grenzig, above. Amazing guidance.

Good luck taking next steps!

@Johnson Joseph - i'm not familiar with the Glenville area of Ohio, but based on your description of the scenario, it sounds like you may be new to long-distance investing.

If that's the case, this thread from the past week of so may be helpful.  We discuss the considerations when investing out-of-state.

I think you're making smart moves by building strong local relationships, as a key step in your process. Good luck!

@Trellis Alexander - sounds like you're in the brainstorming stage of developing your strategy, which is an exciting time!

I took a look at the Loopnet property you linked above. Have you run analysis on it yet to see how it performs as a rental?

Assuming you have put work into educating yourself on how to analyze rental properties (books, podcasts, dozens of analysis practice runs, digging into the BP forums on similar threads), then the next step would be to run a full analysis on the market+submarket and the deal itself, to see how it performs as a rental. The calculators here on BP are rock solid (in my opinion) and perfectly fine to use when analyzing real deals.

If you run the numbers and it still meets your investing criteria (e.g. monthly cashflow), the next step would be to checkout the property in person.

To your question above: "This should be something I look forward into doing with my friend not having any knowledge in real estate[?]"

I think anyone should be encouraged to jump into real estate if they are willing to put in the sweat equity (hard work) and effort in to educate themselves, first. You "make money on the buy," as they say... and you'll want to know how to spot a good deal and pass on the landmines.

@Stephen Groves - that's a great problem to have!

there are a handful of passive investing strategies. To @Ivan Barratt's point above: educating yourself on the various strategies is critical, so you don't jump into something with a wrong-fit partner/type/market, etc and find yourself down $200k.

a few options come to mind: 

• private lending ("be the bank")
• investing as a Limited Partner in a syndication (most options only open to Accredited investors)
• turnkey rental investing (granted, i think of this more as "semi-passive" since you still have to manage the property manager, requires a phone call or email every other month or so. at least, that's been our experience)

you mentioned "no desire/skills to be come a landlord" and I think that's a reasonable expectation IF, you focus heavily on your skills that focus on the analysis and decisioning at the front-end. said simply: it's likely worth picking a strategy and then focusing your limited time/effort on developing the following: 

• goal - have you set them? what are you looking to accomplish? trying to generate a specific number of monthly income? don't need income from it, but are happy with a killer return by a specific time period? (e.g. # of years)
• your investment criteria - the returns and conditions you would you accept for the deal
• partner vetting questions/criteria - sounds fancier than it is, but this is a list of questions you decide are the must-haves that you'll ask a potential partner you'll be investing with. if they knock them out of the park, you can feel good about the "who" component of your investment choices

i could keep going, but I think that folks tend to get into bad deals when they seek the killer returns of real estate but think that they'll get them at an acceptable risk-level without investment in education on the front-end of the deal. great outcomes require some level of effort up front. well worth it, in my opinion. good luck on the planning!

@Jay Chang - there are dozens upon dozens of multifamily podcasts out there these days. Here are some notes on this topic I put together for a mentee, recently. Broke them into 'intermediate' and 'advanced' buckets:

Intermediate listeners, know "enough to be dangerous": 

• Joe Fairless
  
• Michael Blank (~30-45 mins):  some of the most approachable Multifamily syndication podcasts available
  

Advanced listeners, "ready to nerd out":

• Long-form (~30-45 mins): Old Capital - Outstanding podcast with stellar hosts. It gets technical and goes deep into the financing side of multifamily projects
• Small-bites (~5 mins): Real Estate Espresso with Victor Menasce - Victor covers a variety of topics, but I think that if you are further along in your real estate career, you understand the value of getting a broader education on the economic environment and the macro drivers that impact the landscape upon which we invest

I think the Biggerpockets podcast is a great place to start for beginners. The 60+ minute length was a good fit when I was first getting started, but now it's not as appealing as the leaner ones.