All Forum Posts by: Taylor L.

The biggest difficulty owning property in Florida right now is the insurance. Several major insurers have pulled out of Florida and premiums have absolutely skyrocketed. Looking in other areas is wise, I'd recommend focusing as much as you can in just one area to get to know it as much as possible.

It's about the intention behind the offer. Are you trying to squeeze the seller, or are you offering a fair price based on the state of the property? Can you lay out your reasons why you've offered that price rather than asking?

When it comes to biting the bullet and paying tax, also consider depreciation recapture. You'll probably have a healthy bill on that as well.

If I were considering a Lowe's or Home Depot, I'd pay for a call with Ben Mallah. If you search his name you'll find he's a rather bombastic figure and successful commercial real estate investor. He owns quite a lot of commercial real estate in Florida, including shopping centers with big box retailers.

Totally depends on your goals and what you're comfortable investing in. We've done deals with 1031 Exchange into Tenants In Common setups for investors in the past. It all starts with getting specific on what you're looking for.

As a new fund operator, you'll need to demonstrate a track record before a b/d will want to engage with you. I am a b/d rep and I can say with confidence that there are a lot of operators out there looking for help with their capital raises. Experienced operators have a huge leg up.

Do you have an existing database of potential investors? Have you gauged investor interest in a potential offering/deal? Start there, by talking with people you already know. 

You might find that a significant percentage of your prospective investor base is sophisticated, non-accredited investors. In that case, the 506c option may not be best for you.

He very nearly had a stroke in October: link to his IG post

He seems to be doing well now. 

I would wonder about the alignment of interests in this deal. It sounds like you're taking all of the risk and he gets paid either way, whether the deal makes or loses money. Equity (and thus share of profits) should be commensurate with contribution to the deal and exposure to risk.

The price is way too high, no other way to put it.

Take a step back - what is your goal? Wealth preservation? Growth? Cash flow? Define that first and keep it front and center in any decision you make.

Invest in newer, nicer assets in larger, more upward-trending markets. 

Warren Buffett's strategy before he met Charlie Munger was walking around, looking for cigar butts on the sidewalk with one more puff left in them. Charlie got Warren to start looking for higher quality companies and that's when the business really took off. I see this investment model as looking for cigar butts.

Look for alignment of interests. You're providing all of the capital - Then what is their incentive to perform? What happens to them if they mismanage the deal? You're taking on all of the risk and giving up 30% of the deal for your trouble. No way!

I'd recommend you reach out to a gentleman named Josh Satin. He was a MLB player for the Mets and is now incredibly successful in real estate.

I am one of those bd types. Here are a few thoughts:

- Most broker dealers are going to expect you to have your own skin in the game, so they are not going to raise the entire fund for you. Start with a target fund size where you'd be able to raise at least half of the equity.

- Most operators I speak with who have not worked with outside capital providers have unrealistic expectations with regards to the compensation of outside capital raisers (i.e. they want it for free or next to free). Make sure your investment model has enough margin so you can compensate capital partners while making it worth your while. As Chris said, it can be a pay to play market.

- Fund-of-fund managers may also be a good target.