All Forum Posts by: William Kyle Walker

Great job man!

Great feedback @Michael Acosta, as there are good and bad markets in every country there is going to be some opportunities in niches in Venezuela. If people are selling for pennies on the dollar someone else is buying.  But as they say in trading, never catch a falling knife. We should probably wait for the dust to settle there. I have an Airbnb guest right now from Ceracas and she said it is really bad right now and the people don't have the same mentality as Americans when it comes to home purchasing and selling. Her boyfriend is coming to visit her and to hopefully find work. She has been able to save money and send some home. Although the government is trying to crack down on that, she has to send it in alternative ways. 

I read today that Venezuela is in a deep recession right now. Can we look back at 2008 as a roadmap on markets we should be looking at in Venezuela? Are there any local experts that could give advice on property rights in Venezuela as a foreign investor?

Welcome, We all got the real estate bug and that's why we ended up on BP. I guess the first thing would be to determine what your end goal is. Do you want a stable 5-6 FIgue income or to build an empire? Do you want to be supper involved or more passive? Should you use leverage? That depends on your risk appetite, I would suggest yes because that will magnify your returns. Since you will be on the road a lot I would download some investing podcasts. Bigger Pockets has one, The Real Estate Guys Radio is good, and I also like The Commercial Real Estate Show with Michael Bull. If I where you I wouldn't play with residential houses, I would start educating myself on commercial and multi family. Because the profession your in you will have the opportunity to build a rolodex of people that have funds to invest. This means you can take down bigger project threw "syndication".

I came a across a syndication deal that sounds a little fishy. At first it loos like the sponsor is putting in $440,0000 but after further DD it looks like he has no skin in the game at closing. He is raising $7.7m for an $11M purchase. He is charging a 1% acquisition fee and I am okay with that. The fishy sounding part is where the other $330,0000 is coming from. This is an off market deal. The sponsor is a licensed broker. He negotiated with the seller to pay him a 3% commission and just told them to inflate the purchase price to pay for it. I know he has $100,000 because he put that up as the earnest money deposit. He will be making ~$20,000 per year for an asset management fee on top of his equity position. 

Is this an acceptable practice? Is this violating any SEC regs? 

Wow, 

Thank you for all the great feedback. It sounds like the main thing Is, I need to have appropriate reserves in each LLC to cover a big dip in occupancy. If I didn't have enough in reserves to weather the storm then this is a possible solution but must be made with high caution.

Hi Bp, it's been a while since I asked a question. My question is, if I have a fund with let's say 10 LLCs that hold one property each. If one of those properties starts to become low in occupancy and can no longer service it's debt, can I borrow from the other LLCs that are within the fund to pay for the struggling asset?

Hi private equity folk,

This question has 2 parts 

1) How much cash do I need to contribute to the $1,875,016 of equity in order to get it funded by a private equity partner? 2% 5% 10% 15% 20%

2) How much is acceptable to get back as an acquisition fee?

Outline of the deal:

SF: 93,461

PP: $4,050,000 ($43.33psf)

Capex: $508,000

Title & Survey: $16,000

Broker's Commission: $101,250 (2.5%)

Total Acquisition Cost $4,687,654

Equity $1,875,016

Loan Amount $2,812,593

Loan Costs 1.00%

LTC 60%

Interest Only

Interest Rate 3.50%

Going-in Cap: 7.73% at 66% occupancy

General Vacancy: 8%

Market Rent Growth: 3%

Exit Cap: 8.5%

3 Year Hold

Residual: $54.64psf

Unlevered IRR: 9.1%

Levered IRR: 15.5%

Equity Multiple: 1.47

Hi Bp, it's been a wild since I asked a question. My question is, if I have a fund with let's say 10 LLCs that hold one property each. If one of those properties starts to become low in occupancy and can no longer service it's debt, can you borrow from the other LLCs that are within the fund to pay for the struggling asset?

I know this one is old but I want to bring it back up. I am looking for a PM in McDonough, GA. Any suggestions are greatly appreciated.