All Forum Posts by: Theo Hicks

I don't fully understand the question, but I would consider figuring out what info you need, making a Google Form, and sending to sponsors. Google creates a live spreadsheet with everyone's responses. Won't fully fix the problem but should help.

Call a local commercial real estate broker and get a Broker's Opinion of Value, or ask for current cap rates based on the Class of property.

 Agreed. My point was, best case scenario, you barely make anything.

Hey Treasure.

Best bet is to search "off market deals" using the BP search function (magnifying glass at top right of screen). Thousands of threads and blog posts!

Let's say you get your 5% appreciation and sell after 1 year. You will be hit a 6% agent fee. $420,000 sale price is a $24,000. So $396,000 is left. Pay off mortgage of $320,000 and you are left with $76,000. But you put $80,000 down. So it's a $4,000 loss at sale. Plus the $6,000 in negative cash flow, so a $10,000 loss.

Sale after two years at 5% appreciation per year is a $441,000 sale price. 6% agent fee is $26,460. So $414,540 is left. Pay off mortgage of $320,000 and you are left with $94,540. You invested $80,000, so $14,540 profit at sale. Plus the $12,000 in negative cash flow, so $2,500 profit. Which is a 1.5% ARR.

And that is best case scenario. Doesn't account for vacancy, unexpected maintenance, incorrect underwriting, etc.

 Great questions! Thank you.

Cold outreach: direct mail, cold email, cold texting, cold calling

Get a list, scrub list to get contact into (depending on how you will communicate), reach out, follow-up to the 99/100 owners that aren't interested every few months

Cold calling will have highest conversion but lowest volume. Cold email and texting will have lowest conversion rate but highest volume. Direct mail is somewhere in-between.

Just pick one outreach method and grind at it for 12 months, putting in the work no one else will.

I'm sure your you can get access to a list through your brokerage.

Make sure you have a good tracking system in place to follow up.

Start with a script, use script at least 100 times, track KPIs and objections, then make improvement to script and repeat.

Once they are interested, you'll need the T-12 and rent roll to get started on creating the OM. 

What are some tips for analyzing "rescue capital" investments as an LP? Assuming you did not invest originally.

To clarify, I am coming across some opportunities where a sponsor is in the middle of the biz plan, their loan is reaching maturity, they need extra capital, and they are attempting to raise the extra capital from other LPs rather than or in addition to a capital call.

They are offering "rescue capital" investors pref equity that is ahead of original common equity investors.

There are two ways to pay for a mentorship: money and effort. Pros and cons to each.

Sounds like you are leaning towards the "effort" approach.

Attend a local meetup in New Jersey. Identify someone you would want as a mentor. Research them (through conversation and online). Come up with a way you can add value to their business based on their needs and your talents. Actually do the thing that would add value and give it to them for free. If they like it, add more value to them for free. 

You will learn a lot through the process of adding value to their business + you may end up getting hired. 

-Start attending local real estate investing meetups

-Go in with the purpose of identifying real estate investors who are in the niche you are interested in

-Do research on the investors (based on conversations and their online presence)

-Brainstorm ways you can add value to their business

-Instead of offering to add value to their business, do it first and then offer the value

This is actually how I get started working for a syndication company. I met a syndicator at a meetup. Learned he had a podcast. Looked at all their podcast reviews, categorize them based on what people likes and didn't like, then emailed him my results + a plan to improve the podcast + that I would implement the plan for him for free.