All Forum Posts by: Taylor L.

Would echo what @Brian Burke said about sponsor selection. I've been involved as an equity partner on a syndication which did not hit return goals at ALL, due to alleged malfeasance by one of the sponsors.

Now that I'm on the sponsorship side, I take the reputability, ethics, morals, and so forth, of my fellow sponsors very seriously.

Have you gone to the local REIA to find people's recommendations?

They always say nobody gives up the name of their good contractors. I've heard Jason Bhattacharya has helped others with recommendations, but that's via the grapevine. He always seemed like a helpful guy.

@Anthony Cecena those are great, and other quality sessions have been mentioned. I would add Michael Blank's events, they're quality.

This year I'll be attending Jake & Gino as well, I've heard great things about that.

@Amir Khan

I think the key missing component is no value add. Good deals can be done at lower cap rates if you have a substantial amount of value add. Higher cap rates are great, but market caps are where they are right now. Deals I do and look for typically have a 15-17% IRR and 8%+ Cash on Cash return. These returns require some amount of value add, you won't get that just buying an asset and hanging out with the existing cash flow.

Regarding passively investing, your options depend on your situation. If you are accredited, you can invest in publicly advertised syndications & deals on crowdfunding platforms, plus private, non-publicly advertised deals. 

If you are sophisticated & not accredited, you can invest in 506(b) syndications, which are not publicly advertised and require you to have a pre-existing relationship with sponsors.  I do these types of deals & I have a pre-existing, substantive relationship with my investors.

Either way, in my opinion, having a pre-existing relationship with sponsors is a great idea, since you're signing up to invest your hard earned money with them. You should get an understanding of their character, responsiveness, values, strategy, and more.

I started in syndication as a passive investor with my Self Directed IRA. Feel free to reach out if you have questions!

@Reid Mathews I think it depends on your values, strategy, and goals. I both actively do syndicated deals and invest passively. For my passive investments, I prefer to evaluate each property individually, and choose to invest based on my own understanding of the team, market, property, upside, etc.

Upsides: Grant has made it very easy to invest, with his $10k min. Deals I do and see typically have a $50k min or more. Grant does have a good amount of experience in the space. He's a smart guy who works really hard and has a track record of success.

Downsides: You're in a fund, and you don't get to consider each property individually. Most of the investors in the deals don't seem super sophisticated, which is concerning. I also don't like the fact that he's suggesting people leverage themselves into the investment. That's straight up irresponsible.

With the downturn already here, my concern is how his fund will deal with rising interest rates and (possibly) falling occupancy & rent in his A class assets. I'm staying out to do my own deals.

Absolutely! You can roll it into an IRA and use those funds for a number of investments. I accept funds from my investors' SDIRAs, and I invest my own SDIRA in apartment deals as well.

HOWEVER - if you roll it into a Roth IRA, you do have to pay taxes on it. I made the decision to roll mine into a Roth and pay the tax.

I use Quest Trust company for mine. Happy to talk more via PM if you'd like.

If you're looking at SFRs, you could find someone experienced in your market who'd agree to review deals with you, perhaps for a fee. I am far from being an expert in the DC market, but I'd expect cash flowing opportunities out there to be few and far between at this point in the cycle.

Have you considered syndicated deals, if you're going the passive route? You can partner with experienced investors, get tax benefits, earn cash flow, and diversify across numerous tenants, properties, and markets.

@Jason Etheredge how did you get in touch with the potential seller? Mailer? Something else?

Welcome to BP! Some great names for you to look up in the multifamily space are:
- Joe Fairless

- Michael Blank

- Michael Becker & the Old Capital Podcast

- Rod Khleif

These guys put out a lot of free (and paid) multifamily content you can use to get started. Do you think you want to syndicate/bring in investors?

 I haven't gotten my copy of this book yet, but I would register that Grant's sales books are fantastic, if only for inspiration. He does give a lot of actionable advice, but his sales content does need to be changed a bit based on the industry you're in and the buyer type.

Re: his syndications and Reg A fund, I would only be concerned with how the assets will do in the long run, since he seems to be focused on owning the nicest property in the neighborhood.