April 9, 2022
Joe Fairless

JF2776: 7 Things Experienced LPs Look for in a GP ft. Bryan Miller


 
 

L.A.-based musical composer Bryan Miller knew he needed a retirement plan, so naturally, he started buying and investing in real estate as both a GP and LP. He was so successful that he now co-owns Capital Stack Investments while still working as a composer for TV and film. After sharing how he got into development and how he develops build-to-rent deals in LA, Bryan took some time to explain in detail what he looks for in potential GPs:

 

1. They’ve been in the business a long time.

Bryan Miller wants to see track records when evaluating a GP. In fact, he prefers to work with those who have been in business since before the economic downturn in 2008 so he can determine how they handle stress and uncertainty.

 

2. They produce consistently high returns.

Bryan advises against chasing asset classes that promise high returns. It’s a better bet to seek out an operator that has produced 10%–20% returns consistently over a long period of time. 

 

3. They’ve been recommended by someone he trusts.

Bryan tries to leverage investment groups and advice from other people to find quality GPs. Ideally, he prefers to know the operator or receive a glowing recommendation from a friend who has had a positive experience with them.

 

4. They have investors they’ve been with for 5+ years.

Bryan recommends talking to these investors to determine how the GP acts when times are tough and how well they stick to their word.

 

5. They have deep pockets.

One multifamily deal Bryan was a part of wasn’t doing well, so the principal lent the project $1 million to keep it going. “If you don’t have a partner that has some deep pockets with the ability to weather some storms … then it’s a really tough position,” he says. 

 

6. They stay out of legal trouble.

With GPs who don’t have a long track record, Bryan examines other aspects of their lives — for example, do they have a lot of litigation in their background between partnerships? Do they have any bankruptcies or divorces? These can be indicators that the GP doesn’t perform well under pressure.  

 

7. They plan for the worst.

It’s a major red flag when the success of a deal relies on the hope that the market will improve in the future. Bryan sticks to GPs who underwrite conservatively. 

 

Bryan Miller | Real Estate Background

Greatest lesson: Be ready when opportunity strikes. Timing can be life-changing. I ran into the burning building of real estate in 2009 when everyone else was running out and was scared and made 1000%+ returns.

 

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