About 10 months ago, my business partners and I closed on a 155-unit apartment deal in Houston. It was my 3rd syndicated deal. My first deal was a 168-unit and the second was 250-units.
In case you missed it, here are the two lessons I learned from closing on that second deal: Throwback Thursday: Closed on 250-units in Houston, TX…2 lessons learned
Here are three more lessons I learned from the 155-units
1. Go farther faster by playing to your strengths
For my first syndication deal (168-units in Cincinnati, OH), I did it all:
I found the deal. I did the underwriting. I raised all the private money. I performed the due diligence. I hired all the team members and was the main point of contact moving forward. I closed the deal. I was the asset manager.
While it was a great learning experience, doing it all myself didn’t set the deal up for optimal success. Quite frankly, I am not an expert at many of those duties. For example, I am not a proficient underwriter. I am competent and know how to evaluate a deal and determine if it is good or not. However, I haven’t spent hundreds or thousands of hours focusing strictly on underwriting deals. Like most things, the more you do it, the better you get.
So on this deal, I learned that I needed to partner with someone who is phenomenal at underwriting large multifamily deals. Actually, I partnered with this person on my second deal – the 250-unit. This third deal only re-enforced the need to do it again moving forward because it will allow me to do what I’m good at and allow him to do what he’s good at. Again, we’re both capable of doing each other’s job, but we wouldn’t do as good of a job.
This allows the business to go farther faster because we are both focused solely on our crafts. Yes, there is overlap (I triple check all the underwriting and review it in detail), but it’s better for someone with lots of experience to be the primary underwriter.
Thought for you: What’s something you’re really good at? What’s something you’re not good at? Do more of the former and less of the latter because it’s likely that you enjoy doing what you’re good at, which is why you’re good at it, and vice versa.
2. Do something consistently on a large distribution channel
If you are a real estate investor, you’re in the sales and marketing business. Fix-and-flippers, wholesaler, multifamily syndication, etc. are all in the sales and marketing business. Perhaps passive buy-and-hold investors aren’t, but I’m sure there’s a creative way we could connect them to it.
Since were in this business, we must have a consistent daily presence in order to gain exposure and build credibility with our customers/clients/leads.
Some large distribution channels (with some ideas for each) are:
- BiggerPockets (official BP blogger, being an admin, posting, commenting, adding value, offering assistance, being insightful)
- com (writing books and publishing them)
- iTunes (podcasting)
- YouTube (video blog, tips, interviews, make real estate music videos…?)
- Facebook (create a community around an in-person event you host and then open it up to a larger audience)
- Instagram (pictures of renovations before & after)
- Twitter (proactively answering real estate related questions)
Whatever you do, do it DAILY.
Do it consistently.
And do it on a large distribution channel.
Many people want the shiny object, the golden nugget, the Super Secret Plan that will let them retire on the beach in Tahiti. I think that’s ridiculous. We live in an instant-gratification culture. The truth is that to make a good living in real estate, you MUST be consistent with strategic, proven actions. That’s it.
3. There is major power in doing a recorded conference call when raising money
This is going to be a super simple lesson and you might even say “duh.” If you do, I don’t blame you, BUT, it’s something I didn’t do on my first two multifamily syndications. I figured if you don’t do it either then it would help you out when raising money.
Here’s the tip: have a conference call with qualified investors to talk about your deal and record it!
When we were in the middle of raising money for this 155-unit apartment community, my business partner and I decided to have a conference call to present the deal to accredited investors. We did a similar call on our previous deal but we didn’t record it.
For this one, however, I recorded it. It was tremendously helpful with raising money for the deal, mainly for two reasons:
- Most accredited investors are busy making money, which is why they actually have money to invest in the first place. This helps them listen to the presentation on their schedule
- The questions being asked are from a group of people, which is beneficial to others who are listening but didn’t think of those questions
Here’s how I record the conference call:
- First, I make sure the attendees have the presentation prior to the call so that they can review it and come up with questions.
- Next, I used freeconferencecall.com (I have no affiliation with them) and simply set up the call.
- During the call, I have the attendees email me questions. That way, I know who is asking the questions, and I can follow up with them afterwards
- At the end of the call, we do a Q&A session, and my business partner or I answer all the questions that are asked.
As you’re raising money, I highly recommend this simple approach. I’ve personally seen a benefit, and I’m confident you will too!
Want to learn more on how to successfully syndicate a multifamily deal, raise and raise private money? Attend the 1st Annual Best Ever Conference February 24-25 in Denver, CO. It’s the only real estate investing conference whose content and speakers are curated based on the expressed needs of the audience. Visit www.besteverconference.com to learn more!
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.