March 30, 2022
Joe Fairless

JF2766: 5 Tips for Transitioning from Syndications to Funds ft. Ken Gee


 

Ken Gee is a longtime multifamily syndicator who recently started his own fund. Ken tells us what his journey has been like, what he’s learned, and what advice he has for other syndicators looking to make the same transition:

  • Retain your syndication investors when you make the switch. Ken was told it wasn’t possible, but he was able to retain 90% of his syndication investors as fund investors by designing the fund terms to remain as close to syndication terms as possible and waiving commitment fees. 
  • Deploy capital responsibly and in a timely manner. Ken recognizes that he now has time constraints. It’s his responsibility to deploy investors’ capital without taking too long because every minute his investors’ capital sits in a bank account, it’s earning nothing. 
  • Make sure you know what you’re doing before handling other people’s money. Investors are going to ask you tough questions, and you need to understand your business well enough to be able to answer all of them. If you’re not in that position, Ken says, then you probably shouldn’t be trusted with other people’s money. 
  • Total transparency is the key to attracting investor capital. The number-one thing potential sponsors need to know is whether they can trust you. Ken recommends creating a profile on a site called Verivest, which vets all of your deals to ensure the investors who visit the site know you’re credible. 
  • After closing a deal, sit on your hands for a bit. Based on personal experience, Ken recommends taking 30–60 days after closing a deal to get to know a property before launching into renovations. This way, if you need to reallocate your improvement money, you can do it in a smart way. 
  • Do the work and play the long game. When it comes to purchasing apartments, Ken says it’s imperative to thoroughly understand the numbers, the neighborhood, and why people want to live in your property. Doing the work and playing the long game in this business, he says, is the key to success.

Ken Gee | Real Estate Background

  • Founder of KRI Partners, part of the KRI Group of companies, which is a real estate syndication and real estate private equity firm that specializes in the acquisition and management of multifamily apartment assets located in the South.
  • Portfolio: 
    • They have completed 16 deals (10,000+ units) worth ~$50M. 
    • They invest as LPs in all their deals, and Ken has personally invested in two deals as LP ($100,000).
    • They focus on B/C class value-add multifamily between 100–250 units. 
    • They are GP of several syndications and one blind pool fund. 
    • They also do some third-party management.
  • Based in: Cleveland, OH
  • Say hi to him at:

Greatest Lesson: Sit on your hands for 30/60/90 days after buying a property to make sure you know everything you need to know before spending your renovation budget. This hedges against spending all your money only to discover problems you didn’t know about.

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