All Forum Posts by: Spencer Hilligoss

@Evan Oxenhandler - congratulations on building a solid portfolio... without outstanding debt!

Now is the time in the cycle to "harvest the equity" from your properties. Personally, if I were in your shoes, my first thought would be to refi, since rates are so strong right now. If the properties are located in strong markets and pencil out as performing rentals for the forseeable future, I would hold on to them. Pull the cash out of those properties with refi's, build a warchest for investment once the impacts of the next correction take hold.

@Larry Caper - sounds like you've built an incredible education foundation. well done!

Here is another thread on the topic of multifamily and syndication coaching programs from just a week ago or so. Here's a comment I left on that thread, that speaks to a strategy I found incredibly effective, from when I first got started:

"I'll share my personal experience on this topic. When I was getting started, I used both strategies in combination:

• Strategy #1: Invest as an LP in an experienced operator's multifamily syndication
• Strategy #2: Partner with mentors/coaches. I used multiple coaching programs and still subscribe to a couple actively, on-going."

I found this approach to be highly effective. Even though you aren't looking for a mentor program, i'll still recommend that you consider it."

Agree with @Nick B.'s comment, above 

@Steve Veen - established operators will often opt-out of allowing any Sophisticated investors on 506(b) offerings, simply because they don't need to. To @Brian Burke's point above, if they have an established base of repeat investors and consistently find strong deals, they can look to 100% Accredited LPs for all their projects.

In my experience, Sophisticated investors are often smart, hungry and eager to learn.. but also come with some inherent risks to the deal:

* drop-out of deal at a higher rate, for a variety of reasons

* expect more hands-on support (phone, text, email)

* are investing a larger % of their total net worth, so are typically more nervous about deploying the capital

Disclaimer: I am not an attorney, and strongly recommend you connect with a qualified SEC attorney for advisory on this topic, and certainly for creating/structuring a 506(b) offering.

To the point that @Tj Hines made above, it's worth noting that up-and-coming operators will allow for Sophisticated investors, out of necessity, since they are still building their network (e.g. mentees in coaching programs, who are syndicating "student deals" with the co-sponsorship of an established operator).

@Kyle Marcotte - love this call out on cap rates! 100% agree.

what are your "must have" KPIs that you include in deal criteria for your projects?

@Holly Williams stated a perspective that aligns closely to mine, on this topic. I wish I'd found LP syndication investing 15 years ago. Hindsight, 20/20.

I'll share a quick, recent story I heard... related to the one Holly shared:

3 weeks ago, I shared a Lyft with a friendly, real estate-savvy part-time retiree. He told me that he and his wife lost 60% of their nest egg just as they entered retirement years. Their nest egg was held almost entirely in stocks. He drives a Lyft now, because he has to. He said they aren't in dire straights or desperate for the income, but it's a fundamentally different version of their 'golden years' than they had originally planned.

The Lyft driver proactively said that if he could go back in time, he would have invested his nest egg primarily in real estate, in stead of stock. At the end of the ride, he asked for a stack of my business cards, "so he can give it out to [his] business passengers in suits who think they have it all figured out." I obliged. [end of story]

Folks approaching retirement can invest in assets that remain whole while generating income to live off, simultaneously. Aka - real estate.

Note: I still believe in diversification and do hold a % of stocks in my own portfolio, but I have a ways to go before retirement age.

@Matt Nettles - run a quick search of "Sumrock" on these BP forums and you'll find a healthy number of high-quality threads on this topic. good luck with the search!

@John Allen - i think @John Corey just hit the nail on the proverbial head, dead-on.

In our own journey, my wife and I work challenging W2 'day jobs.' We maintain these careers while also managing multiple a thriving, active real estate business. The excess capital generated by the real estate business is used to passively invest in real estate opportunities.

Sure, this model is a lot of work... but to exactly John C's point above, i'm not in a rush to leave behind a career that I enjoy, find fulfilling and pays for more than 100% of our lifestyle ... only to 'retire' before the active real estate business has started generating at least as much as the primary day job does.

Clearly, each person has their unique circumstances and decisions of this size should be taken in context, with lots of deliberation and discussion (for all i know, I could be eating my words on this topic 12 months from now!). That said, I have now heard at least half a dozen very established real estate investors admit regret that they shouldn't have quit their day jobs cold turkey to go straight into active real estate investors. If they could go back in time, they said they would phase it over many months, even years.

@Jevon W. - congrats on taking the next step! you asked for feedback, so here are guiding questions that come to mind when reading your goals. I think you did a great job.

• 1) Target market - this is a great foundation to start with. How much more specific do you think you can make this? Maybe challenge yourself to say, "target market," defined as sub-market and even... neighborhood(s)? This will challenge you to stay focused until you get to a target market that is actionable
• 2) Team building - team building is tough, but hugely important. A key step that I missed when I first started this process, was creating a set of criteria for what i'm looking for in a partner. Maybe you could think about what you are looking for in a team member, and your 90 day goal is simply to crystallize those parameters in and find one team member? That would you'd have a blueprint on how to find the rest? That would be more achievable, given that relationships take time.
• 3) Get in shape: How do you define this? For me, that would be losing some love handles (which is tough, given that I have a raging sweet tooth). Are you looking to hit a certain personal record for cardio, lifting? % of body fat? 

You will probably notice a theme here: honing goals down to the point of being measurable is the key to making SMART goals super effective. Good luck! awesome start

@Mike Elaridi - I opted for Michael Blank's entry level underwriting program a few years ago and thought it was incredibly helpful. $129 Syndicated Deal Analyzer + $50/month for access to the private Slack channel with underwriting feedback on real deals. It's a frugal choice and exclusively focused on underwriting. I'm sure it's evolved since then, and likely gone up in price.

Later on, when I was considering 1:1 private coaching, I interviewed 8 different coaches, including Michael Blank's program, but decided that at the $xx,xxx the price tag would only be worthwhile if I got to interact with "the man, himself." I think his team is excellent, but that was just my personal preference.

I think that the selection of a coach is a process that comes down to alignment on communication style, learning preferences and your goals. Tough to weigh these all apples-to-apples since they have different business models.

@Austin Works - the smart folks on here have already nailed it - @Greg Dickerson @Alina Trigub @John Fortes @Kim Lisa Taylor @Chris Tracy.

I'll share my personal experience on this topic. When I was getting started, I used both strategies in combination: 

• Strategy #1: Invest as an LP in an experienced operator's multifamily syndication
• Strategy #2: Partner with mentors/coaches. I used multiple coaching programs and still subscribe to a couple actively, on-going. 

I found this approach to be highly effective. Even though you aren't looking for a mentor program, i'll still recommend that you consider it.

I captured some of my learnings from mentee perspective in this Forbes article. Hope you find value in it: Trust Your Guru: Three Ways To Vet Real Estate Investing Coaches