Ask tommy2 about Real Estate

[DrewDevil]

tommy, how would you go about syndicating an equity group to buy an apartment complex?

[tommy2]

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tommy, how would you go about syndicating an equity group to buy an apartment complex?

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Hire a securities lawyer to put together a Private Placement Memorandum and educate you on what you can and can't do. Most of the best of these guys are at bigger law firms, but not always. How expensive is the project?

[DrewDevil]

[ QUOTE ]
[ QUOTE ]
tommy, how would you go about syndicating an equity group to buy an apartment complex?

[/ QUOTE ]

Hire a securities lawyer to put together a Private Placement Memorandum and educate you on what you can and can't do. Most of the best of these guys are at bigger law firms, but not always. How expensive is the project?

[/ QUOTE ]

Just theoretical at this point; I think I'd like to find something in the $4MM range.

I am a lawyer and I know a guy who could do the private placement; I guess I meant how would you find your equity investors?

[MasterLJ]

Great Thread (I know it's old). In a past life I was a Project Manager for a Residential Developer.

If there's anything I can answer on the Residential side, I'd be happy to ask (if I remember to check the thread).

I can also answer questions on how young people can get such a position.

[entertainme]

We live in a rural community in the midwest, (small towns and lakes), located about 2 hours from the nearest major metropolis. Genrally the resident population is low income. There's been a glut of properties for at least a year.

While the problems with sub prime make buying to rent attractive, we're not the landlord types and I'd be concerned about tenant quality. (Wouldn't it be fun to be a landlord for a meth house!)

So I'm thinking land. We could reasonably buy land and hold onto it for 20 years as an investment. Or we could possibly buy a residence on a lakeshore and just do weekly rentals to the city dwellers in the summer.

Any thoughts or advice?

The Poker Mom

[fuzzwonder]

what is an approximate buy price percentage for foreclosed properties (relative to similar re in the same area)? and the average build up costs to bring it within spec? i know this question has a lot of dependencies, but i'm trying to establish a gap between buying legitimate vs. foreclosures.

are there resources available to identify foreclosures since they aren't the kind to be listed in the mls site. will this be a cold calling the banks effort?

and finally what is your feeling about foreclosure rates on the coasts specifically Cali and the NE? sharp increase? seeing as how the bubble has primarily effected these areas.

[Predator314]

This is more of a "Getting Started Gameplan" I would like an opinion on.

In my area (southern WV), houses are very cheap these days. I am looking to buy a 1200-1500 sq ft home that needs some work (I have several on my list that I'm looking at right now). My plan is to move from my current home and move into the house. I would then proceed to do most of the work on the house myself over the course of 2-3 years (enough time where any capital gains would be tax free). Then I would try to sell the home for a profit.

Meanwhile, my existing mortgage on my current home is really cheap. I could rent it out and have a positive cash flow the entire time.

Would you recommend this gameplan for someone just dipping their toes into the real estate game?

[tommy2]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
tommy, how would you go about syndicating an equity group to buy an apartment complex?

[/ QUOTE ]

Hire a securities lawyer to put together a Private Placement Memorandum and educate you on what you can and can't do. Most of the best of these guys are at bigger law firms, but not always. How expensive is the project?

[/ QUOTE ]

Just theoretical at this point; I think I'd like to find something in the $4MM range.

I am a lawyer and I know a guy who could do the private placement; I guess I meant how would you find your equity investors?

[/ QUOTE ]

If you don't need accredited investors, then WOM mostly. I know some guys who raised $2m just cold calling strangers and wandering around office complexes asking people for $25,000 a piece. Hard to believe it, but they did it.

I'd start with some brokers, maybe they might even invest, often they know some guys who know some guys etc. Its a somewhat humiliating, low batting average type thing. Once you do one, its much much easier.

[tommy2]

[ QUOTE ]
We live in a rural community in the midwest, (small towns and lakes), located about 2 hours from the nearest major metropolis. Genrally the resident population is low income. There's been a glut of properties for at least a year.

While the problems with sub prime make buying to rent attractive, we're not the landlord types and I'd be concerned about tenant quality. (Wouldn't it be fun to be a landlord for a meth house!)

So I'm thinking land. We could reasonably buy land and hold onto it for 20 years as an investment. Or we could possibly buy a residence on a lakeshore and just do weekly rentals to the city dwellers in the summer.

Any thoughts or advice?

The Poker Mom

[/ QUOTE ]

I like both. Land is easy to own and if you buy in the path of development, profitable in the long run--but no short term cash flow. Is your area a popular vacation area for the city folks? If so, the lakeshore idea has upside on the land and cash flow front.

[MasterLJ]

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I'd start with some brokers, maybe they might even invest, often they know some guys who know some guys etc. Its a somewhat humiliating, low batting average type thing. Once you do one, its much much easier.


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In a lot of cases, brokers are wannabe Developers.