All Forum Posts by: Spencer Gray

@Nate Marshall 

The platform would be a vehicle to connect vetted sponsors with pre-approved and qualified investors. We would not be raising funds although funds raised on the platform would flow through a 3rd party escrow. Think of it as a marketing platform and transparent marketplace that allows the investor and sponsor the choice to invest directly via the platform, or just make the connection and invest/communicate directly. The sponsor owns the relationship of the investor.

The group I'm working with has in house council in addition to engaging a securities attorney. We definitely want to dot all the i's and cross all of the t's!

@Ben Leybovich good point and that makes sense, although CF doesn't necessarily mean you have to target the $1-5k investor. 

I see investing digitally as a major part of the future of real estate syndication. I think the traditional way of raising funds will always be there as many high net worth individuals and family offices require that personal connection - but many don't. As millennials get older and have disposable income to invest how do you think they will prefer to invest? Just look at Robin Hood, Coinbase, etc. 

@Ben Leybovich that's a great position to be in!

There's a couple of scenarios where I think CF could be a useful tool for established sponsors:

1.) Alternative to bringing in an institutional JV partner on larger raises

2.) Create another class of equity with different terms

3.) Another funnel to bring on new LPs and feed the pipeline

4.) Finishing out a last minute raise

5.) Brand exposure for your firm

I've been in the situation, I know many others have as well, where you have the opportunity to take down a larger than normal size deal, you get multiple large deals under contract at once or are doing a lower leverage assumption/deal and the equity required is double or triple a normal raise. The solution is usually to JV with another equity group, often an institutional partner. The downside is obviously for writing the big check they want every major decision under the sun and consider it their deal and you the operator taking orders from them. Not everyone loves this relationship (there are some great institutional partners out there but they are few and far between). This is where I can see having another tool in the box, such as crowdfunding, being a useful alternative to giving up control of your business.

This all assumes that the platform itself is relatively hassle free and can deliver.

I agree with everything @Brian Burke said besides the only difference between a 4% pref with whatever waterfall structure after and a straight 8% pref is that that you don't accrue the pref between 4-8% with the former. If it's a low yielding deal, you don't have as much pref catch up with the 4% pref. That being said the preferred returns I see are in the 6-10% range, mostly 7-9%. 

Other than that I think the waterfall hurdles are too compressed in the 4-11% range. I can see this making sense for a new development or a major reposition / rehab, but i don't see the advantage to anyone for a more vanilla buy and hold deal. 

@Shahad Saffar I have to echo what @Bjorn Ahlblad said. I would first exhaust every piece of free material (like BP, podcasts, webinars, YouTube), low cost (books, online courses) before I would pay someone $15k to be a "guide". Also why don't they refund you if you DON'T get to $500k? 

Are you currently networking across your market? I would exhaust attempting buy lunch/coffee/beers for every operator, broker and attorney before paying $15k (that's a lot of nice lunches!) All it takes is one successful individual to agree to stay in touch and then for you to know the right level of contact to not annoy them! Good luck.

Sponsors and Sydicators -

Who all is using or has experimented with crowdfunding as a tool to raise all or a portion of your equity stack?

What do you like about whatever platform you are using and what turns you off of other platforms?

What features do you like, what do you not like?

For those who have not jumped in but are considering it what features / terms would make you pull the trigger?

I'm consulting with a group building a new CF platform with the goal of being a transparent and open market-place to connect pre-qualified sponsors with pre-qualified investors. I'm curious with the proliferation of CF platforms what everyone's experience has been?

Thanks in advance!

I was with a mentor of mine who controls/manages about 10,000 units and had never heard of Uncle G. Too busy 10xing it on his own to go down a YouTube rabbit hole apparently! He had also never heard of Bigger Pockets. Most of the bigger players could care less. 

Like other's have said GC is a big player in relation to the average multifamily operator on BP, but in the world of Private Equity Real Estate and institutional investing he is a small player. 

But like he says (paraphrase) - "There's always someone bigger than you just appreciate what you've accomplished." - Said while comparing his G550 to a 737 lol! 

https://www.nmhc.org/research-insight/the-nmhc-50/...

https://www.nmhc.org/research-insight/the-nmhc-50/...

@Chris Perry Welcome to the team! I find that what you get out of BP is about equal to what you put in. It's great to be able to learn from those who have been there before and to help those who are where you have just been.

Good luck!

Thanks, @Danny Randazzo . That is similar to what I'm seeing as well, maybe slightly less earnest money. 

BP Team -

As the 10 year treasury hovers barely above 2% MF yield spreads have expanded from the dark days of the end of 2018 and early this year. This environment gives a ray of hope and encouragement to the enormous amount of dry powder sitting around waiting to be deployed. In this scenario terms and price are getting even more competitive. With that being the assumed reality I thought it would useful to me and the community to do a quick testing of the waters out there.

What kind of terms are you currently offering for larger (100+ units) MF assets? (DD time, earnest $, any waiving of contingencies?)

If you're currently selling what are you seeing?

Let us know what markets you're active in as well.

Thanks in advance!

@Nate Anderson I'm pretty active in the Indy (home base) and other Midwestern markets and always happy to connect.