All Forum Posts by: William Kyle Walker

You post leads to a lot of questions.  

What is your closing window? 

Do you have it under contract? 

How much EMD do they need?

What grade would you give the neighborhood (A-F)?

Why are they selling? 

Do you have contractor relationships that will handle the interior renovations?

Do you also need someone to sign for the loan?

Have you had your mortgage broker vet the deal and financials yet? 

Have you modeled it?

The company that I work for has been investing in Multi-Family for several years. Track Record is a few thousand units.  As we look to grow faster and scale we are now starting to consider letting outside investors come into our deals. If you are considering investing as a Limited Partner, what are the main things you are looking for? 

I assuming since you're here on BP, you would want to learn a lot about the business. 

Preservation of Capital is probably the next thing. 

The rate of Return is probably third. 

What else would you like to get out of your investment? 

It also depends on what resources you each bring to the deal. Who will manage it, if not self-managed, who will manage the manager, who knows the contractors and will manage the rehab, the attorneys, the CPAs/accountants, who knows the mortgage brokers, who is going to sign the loan?

 The deal is worth a lot but there are other relationships that are worth a lot as well.  

@Alan M.

Hi, 

We are starting to allow some outside passive investors into our deals. We like to focus on the "P" in LP. We like partners that can bring more than a check to the deal. We currently are raising about $750k 12-24% IRR, 18-24 month investment. We have $2.5m in it, The total capital stack is $18M.

Hi BP, 

Does anyone have experience using Land Vision (digmap.com). If so, have you found that it is worth the investment $5-15K?

Hi Kishore, 

After working in the field (the post is 5 years old) we determined it was more important to look at the incomes and concentrations of adult children because they are the ones that typically cover the bill. They want mom or dad to live close to them so they can go and visit them.  Then if you find an affluent area, demand isn't that big of an issue. You just have the beat your competition with superior service. 

Good Luck 

Wanted to bump this Questions, 

Any Wholesalers in LA, Orange County, Los Angeles, Hollywood, wilshire, venice, that have a good way to find ownership info? 

I have found http://zimas.lacity.org for GIS searching, But the Block out the owner info. 

ANy help would be great. 

Thanks, 

As the process moves along I'll try to update with, clarifications, successes,  headaches, and costs. 

I Had ~40-minute call with my syndication attorney yesterday and needed guidance on how we should proceed with raising outside equity for our deals. I mainly was needing help deciding on whether to start a fund or raise equity on a deal by deal basis and where to start raising funds (HNW individuals, RIA/placement agent, Family offices, PE, Institutions) 

Below are my summary notes. Sorry if they're not super clear.  Hopefully, this can provide some clarity if you're looking into syndicating your own deal. Consult with your own attorney for your specific needs.

-More sophisticated the investors the less documentation and compliance we need.

-Institutional investors will do their own due diligence

-Investors unknown to us = more disclosures and nuances.

-506 B offering = Investors we know

-506 C offering = General solicitation to accredited investors only = More steps to disclose and more steps to verify accreditation status

- Don’t need to be licensed, we file a “issuer exemption”, as long as the person on our team does more than just capital raising and their compensation isn’t based on how much they raise. Can only file this exemption once per 12 month period. Many companies file this more often but they are bending the rules.

- If we use an RIA (registered investment advisor) it adds a layer of insulation if we were to get sued but it also adds a "mouth to feed". They will raise the money for us and will be compensated for the amount they raise. 

- She can introduce us to a few RIAs that she would recommend. Also knows someone that knows a lot of RIAs but then again that is 1 more “mouth to feed.”

- Each crowdfunding website will give us their own checklist of compliance documents that they require.

- Most crowdfunding is really just a 506 C offering that has a “web-enabled” mass marketing platform.

- True crowdfunding to unaccredited investors only allows for $1 million raise per year. 

- The difference between a fund and single deal raise is 

1. how we market it

2. the extra scenarios for disclosures included in fund papers

3. Disclosures for each scenario for fund. Single deal raises are easier to “sell” because we can clearly articulate the situation.

-Legal doc prep costs associated are not going to be drastically different between a small single deal raise and $100m+ fund raise.

- Unless we have deals lined up and a highly predictable deal flow we can raise the fund but only do capital calls once deals are under contract. If we call the capital to early we still have prefs that we owe accruing.

- If we do a capital call and investors “default” aka (don’t wire the funds that they told us they would) we make consequences. Like kicking them out of the fund. Make sure to cover these scenarios in the offering documents.

- It’s better to start with a small fund and have it sell out than to start a huge fund that doesn’t fill up, Just better for our track record and marketing. It’s better to do a 10m fund, sell out, then do a 15m fund and sell out. Instead of doing 25m and taking forever to fill up.

- We can add language to the documents that allows preferential treatment to large institutional equity. Like participation in asset management fees etc. 

@Joe Fairless thanks for the detailed reply and peek behind the curtain. I guess you could say that I am the first higher for our company. But we do have a goal to get an admin hired by the end of October. 

With deals being your biggest challenge I assume you have the equity piece figured out. Do you think you will continue building your equity list and eventually start placing equity into other sponsor's deals? Similar to @Michael Blank Nighthawk Equity? Would you guys JV on the right deal?