All Forum Posts by: Steeve Breton

@Gino Barbaro is modestly not self promoting.  Great stuff on his site.  Also check out Michale Blank and Rod Khleif's sites.  Both have books, training, coaching, etc.

@Jillian Sidoti , Excellent response.  All the right actions to take so that when it's time to syndicate you've already built some credibility.  

@Nick Love,  its been a week since you posted this question.  I hope you've solved it and are making progress.  As many have said, lots of ways to bring in a partner or two, who aren't passive, to take down a smaller property and avoid syndication.  

If you do plan to syndicate I highly recommend paying for some quality education... this runs the gamut from spending $1,000 with Michael Blank (gets you his video course and a solid underwriting tool) to spending $20,000 for some of the coaching.  There are a few coaching/ courses offerings in the $5,000 range so shop around.  Best of luck!

@Jay Hinrichs  excellent perspective and a good reminder for all of us to be careful.  While most of the bloodbath was in single-family there were no doubt some multifamily casualties as well.   I am currently only investing in projects with value add and 10 year debt.  Force appreciation and time should carry us through the next downturn.

@Torey Chumbley I paid off my mortgage about 10 years ago.  I was so happy and it felt like a huge accomplishment.  When I began investing in real estate in 2012 my level of financial/investment sophistication dramatically increased and I grew to regret having paid off the mortgage because I realized it was an emotional decision and not the best financial decision.  I feel its better to carry a mortgage at 4% and invest the rest >15% all day long.  The return, which is easily achieved via a good syndication, is [almost] passive and would likely cover the interest payment on your mortgage and then some.

Hi All,  just saw this post at John has brought it back to the forefront.  I've invested in 13 syndications (1,100 units) and last year launched my own Syndication business.  Closed on 106 units in March.  Prior I've had a dozen properties (up to 6 units) that I managed myself.  Have begun selling them.

@John Britt happy to jump on a call about your Memphis opportunity and getting started in general if you want to email or PM me to setup a time.

Mi'esha, in my experience there are plenty of syndication sponsors who are accepting non-accredited investors (under rule 506b).  The problem is if they're taking non-accredited investors they cannot advertise.  So you won't know about their deal unless you build a relationship with them in advance... this is actually true for most syndicators in general.  So you're first step, to post here, was great.  Next step is to private message those who respond and start building your relationships.  I'm always happy to jump on a quick call.

BTW, here's the SEC definition of an accredited investor:  Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year...  OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).  But as I stated above, I'm not sure it matters much with regard to your question.

Best of luck! 

David is spot on with these metrics.  MF and SF are two different investment types with different risk profiles.   Holly's point on jobs and population trends is key when underwriting any deal you're looking to invest in.  You should know how to research this for yourself so you can check the sponsor's data points (happy to help you with that). 

I would say that a solid C class is just as safe as a B class property in terms of weathering the storm.  When people start losing their jobs vacancy rates are highest in A class, then in B class.  C class property vacancies have the least impacted in a down turn.  

Also, we're underwriting our deals right now with 10 year Fannie/Freddie debt and only looking at deals with substantial upside/value-add which also further improves your LTV once your Capex plan is executed. This gives us time to weather whatever the next few years may bring.

Lastly,  be sure to do a comprehensive check on anyone you invest with.  Run background checks, get references, and validate that they personally invest in the multifamily deals they sponsor.  

Happy to jump on a call.  PM me if you'd like to further discuss.

@Brunno Goncalves  Congrats on creating a great forum for us Boston-MetroWesters to engage with like minded individuals and support eachother in our investing goals.  I've had a great time at these meetings and look forward to another great year ahead.

@Ryan Hebert Alexandra's post is right on.  I've lived in Natick for 18 years.  Prices here have skyrocketed since then but certainly over the last 5 years.  Framingham is surrounded by great towns and by no means too far from Boston.  Just over 1 hour commute by car most days and the train is very reliable.  Metrowest in general is also very desirable.  Framingham jobs and population growth support the increasing rents. I was also speaking to the Framingham fire inspector and building inspector last week and they shared lots of info on new developments going in downtown.

I own 6 units in Framingham.  Recently sold some in Framingham and already regret it.  Many investors here feel like Framingham is going to pop one day and prices will soar.  I like the cash flow and will take the appreciation as icing on the cake one day.

@Kevin Nguyen   I actually met the sponsors (Three Pillars) of this deal at a meetup in Boston a couple of weeks ago and had a call with them to dig into the details.  They are looking for a few KPs to help with Net Worth and Liquidity.  They personally have little experience but do have a friend/relative with investment and property management experience so they won't need your involvement there.  I did my own underwriting of the deal itself, using the rent role and actual expenses, and it is solid. Could be a great success. My concerns were threefold:  

1. At the time they were planning on using a recourse loan.  If the deal goes south for any reason the bank will come after any/all KPs looking for the full $6mm.  I have too much to lose.  At first they were pretty flippant about this concern but softened when I explained that both of my mentors told me they'd never get their investors to sign on a recourse loan. 

2. Sponsor's compensation is heavily fee based.  It is also font loaded.  This does not align well with investors and the long term success/profitability of the project. 

3. KPs would not be adequately compensated for the risk.  

I told them if they can correct these 3 issues I'd consider signing on as a KP.  I wouldn't say "stay away" but certainly "buyer beware" on this sort of thing.  As with all things in this space, you have to do diligence and then decide for yourself if the risk/reward is worth it.