10 Rules of Successful Multifamily Investing through Syndications · 2018-07-25 · 10 RULES OF...
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Transcript of 10 Rules of Successful Multifamily Investing through Syndications · 2018-07-25 · 10 RULES OF...
10 Rules of Successful MultifamilyInvesting through Syndications_________________________________________________________________
by Vinney Chopra
TABLE OF CONTENTS
Title Page. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
Copyright . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06
10 Rules of Successful Multifamily Investing Through Syndications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07-19
1. Educate Yourself. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08
2. Dream Big . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
3. Buy in Emerging growth Markets & Location. . . . . . . . . . . . 10-11
4. Look for Momentum Plays and Value-Add for consistent Cash-Flow every quarter . . . . . . . . . . . . . . . . . . . 12
5. Build a Totally Transparent Business Model . . . . . . . . . . . . . 13
6. Create New LLCs for each Multifamily Community & get extra Insurance Coverages to mitigate risks . . . . . . . . 14
7. Diversify Across Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8. Use Professional Property Management or better yet- self manage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9. Build an Awesome Presentation and Credibility Kit. . . . . . . . 17-18
10. Leverage Your Investment Capital, Time and skills – Syndicate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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COPYRIGHT
Copyright © 2017 by Vinney Chopra
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission from the author.
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INTRODUCTION
If you want to know everything you need to start investing in multifamily syndications, look no further. Vinney Chopra is ready to share his wealth of knowledge and success with you if you’re ready. Vinney has been investing in real estate for more than 40 years and has completed over 25 syndications. His newly formed company, Moneil Investment Group controls more than 2300 units worth 132 million in just 2 years. What you’re about to read is what Vinney practices daily and has helped lead him to be the successful multifamily syndicator that he is today.
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ABOUT THE AUTHOR
Hi, I am Vinney Chopra, i have successfully done 26 Multifamily Syndications. It’s exciting to note that we are sending about 550
quarterly cash flow checks to our valued investors worth $500,000!! I have put together 10 rules of successful Multifamily Syndications over my many years of successes and failures. These are the same rules I follow today and share with
investors and students.
Vinney Chopra “mr. smiles or mr. enthusiasm”
925 766 3518
www.multifamilysyndicationacademy.com
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10 RULES OF SUCCESSFUL MULTIFAMILY INVESTING THROUGH SYNDICATIONS
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1 - Educate Yourself
Spend the time and money upfront to relieve yourself of as many mistakes as possible. Just one big mistake can wipe you out.
To excel in any field - my thinking is that we need to get obsessed in learning it in depth - all the intricacies, foundations, procedures, systems and the structure of the business. Knowledge is power.
It’s great to find the very best role models in that field, discover what methods they are employing and imitate them.
Try to find a great mentor in them, get a coach or a mentor, especially in the
beginning. See how you can contribute to their organization.
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2 - Dream Big
Set Realistic Concrete Goals with deadlines and expectations for massive action daily, weekly and monthly.
A goal is different from a wish; you may wish to be rich, but that doesn’t mean you’ve ever taken steps to make your wish come true.
Setting clear and specific investment goals becomes your road map and action plan to becoming financially independent. You are statistically far more likely to achieve financial independence by writing down specific and detailed goals than not doing anything at all.
Your goals can include the following:
▪ The number of units you need to acquire each year.
▪ The annual cash-flow they generate.
▪ The type of property.
▪ The location of the emerging market.
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3 - Buy in Emerging Growth Markets and Location
Always invest with a long-term perspective in mind. Never speculate on quick short-term gains in appreciation, even in a heated market experiencing double- digit gains. You never know when a market will peak and it’s usually 6 to 9 months after the fact when you find out.
As a syndicator, you want to do extensive research and decide on an emerging market that will bring lots of jobs. You see, you will need to sell that market to your “Valued Investor”, who would look at all the reasons to invest in your opportunity.
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The best approach:
1. First is to choose your city or town based on the health of its housing market and local economy (unemployment, job growth, population growth, etc.).
2. From there you would narrow things down to the best neighborhoods (amenities, schools, crime, renter demand, etc.).
3. Finally, you would look for the best deals within those
neighborhoods.
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4 - Look for Momentum Plays and Value- Add for consistent Cash-Flow every quarter
With few rare exceptions, always buy investment property with a positive cash-flow. Do extensive due diligence and stay true to your standards and the assumptions in your elaborate Underwriting.
Don’t fall in love with the property; fall in love with numbers.
Remember, you are building a strong foundation to provide excellent Quarterly Cash flow returns to investors, so that they can give you more referrals and talk nice about how good you are as a syndicator.
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5 - Build a Totally Transparent Business Model
This has been our foundation at my 4 companies. Remember, the investors need to feel secure and confident about you and your business ethics before they give you $50k or $100k or $500k. It’s their very hard earned savings.
Treat their investment as gold and do everything in your power to preserve it and make it grow.
In all our companies, the investors can ask to see ledgers, invoices, bids, bank statements, rent rolls, all financial reports, Capital Expenditures reports, balance sheets... well any and everything. That builds trust and makes them comfortable with your organization.
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6 - Create New LLCs for each Multifamily Community & get extra Insurance Coverages to mitigate risks
Always put each property in its own LLC. Make sure that all insurance, property, wind stream, flood and umbrella insurances are in place for your assets. Read and educate yourself the “SEC RULES AND REGULATIONS” thoroughly.
Find the best RE Attorney and Syndication Attorney who you can build relationship with. The operations go smoother by getting help from them. You underwrite their fees in calculations, so don’t try to take a cheaper route, it may come to haunt you.
I have been extremely blessed with Kim Lisa Taylor,www.SyndicationAttorneys.com. She and her team is amazing, efficient, cutting edge with laws and very professional. I would highly recommend working with her. She has done all our 26 Syndications.
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7 - Diversify Across Markets
Focus on one market at a time, accumulating from 3 to 5 income properties per market. Once you’ve added those 3 to 5 properties to your portfolio, you would diversify into another prudent market that is geographically different than the previous one. Typically that means focusing on another state.
One of the underlying reasons for diversification within the same asset class (real estate), is to have your assets spread across different economic centers. Every real estate market is “local” and each housing market moves independently from one another. Diversifying across multiple states helps reduce your “risk” should one market decline for any reason (increased unemployment, increased taxes, etc.).
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8 - Use Professional Property Management or better yet- self manage.
We decided to manage all our Acquisitions from day one. It gives so much control on the day to day operations.
We can take immediate steps:
▪ To rectify problems
▪ To get better bids
▪ To reduce costs
▪ To implement strong marketing techniques for high occupancy.
Never manage your own properties unless you run your own management company. Property management requires a solid understanding of tenant-landlord laws, good marketing skills, and strong people skills to deal with tenant complaints and excuses.
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9 - Build an Awesome Presentation and Credibility Kit
Remember we have only first 7 seconds to make a great impression with Investors, RE brokers, Loan Brokers, Bankers, Landlords and others. It pays big dividends to get professionally designed business plan, an Educational Simplified PowerPoint presentation. I would highly recommend practicing your scripts for each meeting, rehearsals are necessary.
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10 - Leverage your Investment Capital, Time and skills - Syndicate
Real estate is the only investment where you can borrow other people’s money (OPM) to purchase and control income-producing property. This allows you to leverage your investment capital into larger multifamily properties than purchasing using “all cash”. Leverage magnifies your overall rate-of-return and accelerates your and investors wealth creation.
It’s much easier to manage and bring about great rates of returns with larger multifamily communities.
Focus on accredited and sophisticated investors.
You are in a very good profession by being a Syndicator, you are doing a great job of helping lots of entrepreneurs, doctors, lawyers, managers, high net worth individuals, retired businessmen and so many more, who just don’t have the time and skills to effectively syndicate and bring about great returns.
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We can provide a Rich Lifestyle and Independence by providing high returns in monthly or Quarterly along with the equity gains returns upon sale of the assets.
So get excited to embark on this great journey to become financially independent to bring the kind of things you want to bring to you loved ones.
If you would like to talk to the author: VInney (SMILeS) ChOPRA; please text “Mr. Smiles or Mr. Enthusiasm” as he is often called at 925 766 3518 or email [email protected].
You can also reach him at www.multifamilysyndicationacademy.com.
460 Highway 332, Lake Jackson, TX 77566
P 925 766 3518 E [email protected] W www.multifamilysyndicationacademy.com
VInney (SMILe) ChOPRA founder | CEO
