Las Vegas multi-family syndication is a way for you to own a piece of a quality apartment community while sharing in the risk and reward. If your goal is to diversify your real estate investments this may be a good idea to consider.
Hello LasVegasRealEstate.com readers, my name is Bruce Langson, Commercial Realtor and Multi-Family Division Manager with The Woodcock Real Estate Group, Berkshire Hathaway Commercial Division – Nevada Properties.
I have studied RE investment continuously from 1972, built, owned, managed and sold hundreds of my units profitably. I have met many who have hesitated from buying existing properties and in all cases, looking back, they say they should have purchased then, but at the time the big numbers were intimidating. To manage the larger cash requirements of a Large multi-family purchase and to minimize your exposure, you may consider syndicating the property.
Las Vegas multi-family syndication is an effective way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own. The basics of real estate syndication aren’t all that different from two people opening any type of business together.
The 6 steps to starting a property syndicate
1: Find your partners.
2: Agree on your objectives.
3: Work out your finance strategy.
4: Determine the investment structure you are going to use.
5: Agree on your property strategy.
6: Put a legal agreement in place.
7: Execute your strategy.
Las Vegas Multi-Family Syndication: Process of Analysis
Here are some very good thoughts to consider as you work through the process of analysis for a multifamily purchase.
- Be prepared when the deal doesn’t perform the way you have outlined in your Proforma. Don’t just give the keys to the property management company and expect everything will be handled as you would prefer. Set up the requirement for updates on a regular basis and verify the reports.
- Assuming you are syndicating the asset, communicate regularly with your team and investors. Share the good, bad and more importantly the ugly. If you can’t pay returns to the investors because of the XYZ issue, get ahead of the issue and share what happened and your plan to resolve.
- If this is your first deal, raise more money than you think you need. Projects and costs can add up quickly so make sure you have adequate reserves for Capital Expenditures (Capex) and working capital.
- Make sure you partner up with a reputable full-service Management Company. This would be a company that can handle your leasing and rents, lease expiration matrixes, all your facility’s needs, accounting, and even your construction and project management needs.
Multi-Family Property Management
It is also advisable that you have your preferred Management Company perform some form of due diligence for you prior to closing your purchase. For example, they would compare every lease to the rent roll and notate discrepancies, walk every unit and notate age of appliances, carpet condition, any evidence of water intrusions, etc.
After the Purchase, make sure the management company sends you weekly updates on the performance of the previous week (that update should include leasing velocity, renewal updates for all leases expiring out 60 days, current reputation data [likes, reviews star rating, etc..]), updates on maintenance requests and construction projects.
Final Thoughts on Las Vegas Multi-Family Syndication
There is more to discuss, but the above should give you something to think about. Your management team will be the most critical component here. Your property manager is the horse you will have to rely on. Make sure they are fully equipped to take on a project the size of your property and already have experience in doing so. Make sure the management team has all the proper systems and procedures in place to run operations efficiently.
With a large property purchase, the ability of your management team is everything. Managing projects of your size are handled every day by qualified quality firms and will minimize your corrective inputs.
Feel free to contact me with your questions and comments about the purchase and operation of a large multi-family property or the prospect of organizing a syndication for the purchase of a property. Preferred Partner: Commercial Realtor
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