Tag: #syndications
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An example due diligence investigation on a facility (part 3/3)
This week, I want to give you more insight into how we evaluate a facility to determine whether or not to put in an offer. This is based on a real opportunity that we looked into and ultimately decided was not a fit for us.
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How do we evaluate a property to decide if it is a “deal”? (part 1/3)
In 2023, we looked at over 70 properties and made an offer on only 1 of them – and for that one, we weren’t able to come to terms with the seller. The overwhelming majority didn’t meet our investing criteria.
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How to use arbitrage effectively
Most people are aware of the concept of financial arbitrage – borrowing money at one rate and then using it to generate income at a higher rate, pocketing the difference between the two rates as profit – as this is what banks do. Banks borrow money (your deposits) at a low interest rate then lend…
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8 tax advantages of real estate
If you talk with real estate investors, you will often hear about the tax advantages of real estate investing. People will often talk about them as a silver bullet that makes real estate investing more lucrative than other investments. But it isn’t always clear what tax advantages they are talking about. And, in some cases,…
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Will $1Trillion in interest payments force lower rates?
In Q4 2023, the interest on the federal debt surpassed 1 Trillion dollars [1] for the first time. That’s almost double the amount we paid in Q4 2019 ($565B), and is truly an unfathomable amount of money to be paying simply to cover the cost of maintaining our deficit (not to pay it down).
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Do your homework so you can take advantage of a deal when it appears
While getting wealthy in real estate is a long-term game, there are times when you need to be able to move fast. Sometimes really fast.
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Hands off investor book review
I am often asked if I can recommend a book for a Limited Partner to gain a better understanding of syndications, including how to better understand a deal. I am happy report that I finally found a book that I can whole-heartedly endorse as a great introduction to syndications for LPs: The Hands-Off Investor, by…
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Deep dive on our values: Reliability
MBC Real Estate Investing is built on 4 core values: abundance, freedom, community, and reliability [1]. I want to go a little deeper into what these values mean to us, so that you have a better idea of whether or not our views align with yours. I believe that understand someone’s values is important to…
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Deep dive on our values: Freedom
MBC Real Estate Investing is built on 4 core values: abundance, freedom, community, and reliability [1]. I want to go a little deeper into what these values mean to us, so that you have a better idea of whether or not our views align with yours. I believe that understand someone’s values is important to…
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Key differences between REITs and syndications
At a high level, syndications comprising multiple properties look an awful lot like REITs (Real Estate Investment Trusts) so a reasonable question is why would you invest in a syndication, where your money is locked up for years, when you could invest in real estate through a REIT instead.
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What we look for in our investors
You already know that not all investments are right for all investors. That also means that not all investors are right for a specific investment.
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Tax Adjusted Returns – understanding how taxes impact returns
When comparing investment opportunities, it is very tempting to just look at one of the common metrics, in particular IRR, and pick the investment with the best projected return.
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Risk adjusted returns – not all investments behave the same
When comparing investment opportunities, it is very tempting to just look at one of the common metrics, in particular IRR, and pick the investment with the best projected return.
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Why I like the Texas markets
Once you know what your overall investment strategy is [1] and have decided on an asset class [2], the next major decision point you need to make as a real estate investor is what market to invest in. Unlike a stock, which is identically priced anywhere in the country, the price of real estate varies…
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Why I like self storage facilities as an asset class
Once you start looking at syndication deals, you will find that there are a huge number of opportunities to invest in a wide variety of real estate – as well as other types of syndications as well (did you know that many movies and broadway shows are syndications?).
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Don’t be afraid to ask the hard questions
I almost got involved in a ponzi scheme. The only reason I didn’t end up losing a lot of money was sheer luck.
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Your lawyer and CPA – don’t invest without them
If you hang around real estate investors for a while, you will always hear the disclaimer that “I am not a lawyer, CPA, or financial advisor”. You will even see it on each of my blog posts J.
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Why do syndicators share their deals instead of keeping them all for themselves?
A common question from people exploring syndication for the first time is, “if this deal is so good, why doesn’t the sponsor keep it to themselves?” It is a very natural question, but misses the point of why someone is syndicating in the first place.
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Yes, you can lose money in real estate, don’t let anyone tell you otherwise.
Interest rates are up. Inflation is high – which means the cost of everything is increasing rapidly. Banks are failing. Rents are no longer increasing at 10+% per year, And it is getting tougher to qualify for a loan.
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Understanding common metrics defining returns: CoC, MOIC, and IRR
When evaluating different investments that would fall into the same bucket within your portfolio, it can be challenging to understand how they compare since they may have very different characteristic such as cash flow and time to completion (to know what your buckets are, you need to understand your personal investment philosophy). To help compare…
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What is a “preferred return” and how does it relate to a “waterfall”?
When you start looking at syndications, you will hear a lot about “preferred returns” (also known as “prefs”), and “waterfalls”. These terms are thrown around a lot but not usually defined. So what do people mean when they are talking about them?
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My (Current) Investment Philosophy
There are a lot of different ways to invest in real estate. The right way for you may not be the right way for me, and that’s ok. Success in REI does not look the same for everyone. It is important, however, that you understand why you are investing in a certain asset class, deal,…
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Where to put your investing dollars: REI vs the stock market – the numbers (2/2)
After reading the previous article, I am guessing you are a little skeptical. I can imagine you thinking “That sounds nice, but do things really work out that way?” I totally understand.
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Why I started this blog – and MBC
Before we go too far into the details of syndications and specific deals, I want to give you more of an idea as to why I am investing in real estate, creating MBC, and writing this blog. I think understanding who I am and why I am here will help you put my advice in…
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What documents should you expect to see as part of a syndication? (An Introduction to Syndications Article 3/3)
Because the LP is a completely silent partner and has no influence over the investment, the SEC considers syndications to be securities [1] as the profit expected to be made (by the LP) is due exclusively from the actions of a third party (the GP). This makes it a very different situation than when you…