Realty411 Magazine Featuring Lori Greymont | Page 51

A Lesson In
Why ESTATE
Dallas / Ft. Worth is One
REAL
of
the
Best
Metros
in
the
US
Syndications
I
by Tom Wilson
Are there markets that porate revenue
don’t
recommend
being
a
have
weathered the down- •Most affordable housing of top 20 cities
by Tom K Wilson
real estate investor…un-
turn well, are superior in ($116,000 median Q3 2011)
less you have a well-de-
many of the parameters •Central location in the United States at-
WHAT IS
A strategy,
REAL quantitative
ESTATE
fined
above, and have had rela- tracts companies desiring time zone and
SYNDICATION?
goals and are dedicated to go by
tively calmer waters dur- distribution competitive advantages
burden of acquisition, operations, and disposition. One gets
the numbers and not by unsup-
ing these past few tumulus •DFW airport is the third busiest in the
the expertise, management and borrowing power of a team of
eal estate
syndicat-
ported advice
or emotions.
years?
world
proven
experts.
ing is crowdfunding
My engineering
training and
Indeed, my experience •One of lowest cost of living major MSA’s,
before
crowdfunding
30 years of
experience
manag-
in more than 1800 unit yet above average household income
Tom Wilson
WHO
IS INVOLVED
A REAL
ing high tech
profit
centers
transactions
over 35 years WITH
for real
estate
ever in
was a term. Basically,
•Highest
millionaire growth rate in the
ESTATE
SYNDICATION?
Silicon Valley
me how and
to analyze
for has
that
Dallas / Fort
Worth is one United States
both taught
syndicating
crowdfunding
are revealed
the
the best return
on of
investment
in any
of the for
best real The
estate
first investment
ingredient markets
for a real estate
is a (95%
“syndi-
•Strong syndication
rental market
occupancy Q4
pooling
capital with
other mar-
individuals
ket.
in the
States; (also
that is
why “sponsor”
I chose or
2011
for single family
homes)
called
“promoter”).
This individual
a common purpose or a common goal.
In United cator”
Today,
principles
of analysis
it for
most of or
my company
personal is portfolio
long
•Very landlord
in charge
of finding,
acquiring friendly
and managing
real estate,
that the
common
purpose
is the remain
purchase of
a real
the
same.
Anyone
can
do
it,
however,
one
term
holdings.
Yes,
economy crisis has
the real estate. They have a history of the
real national
estate experience
property of any kind, including multifamily residential,
needs
to
be
very
disciplined
and
educated
The
strengths
of
Dallas
/
Ft.
Worth
are:
affected
even
DFW,
but
not significantly
and the ability to underwrite and perform the due diligence
on
or commercial such as retail, office, medical, industrial,
about
the
submarkets
and
products,
or
ride
•Business
and
financial
capital
of
the
compared
to
other
MSAs.
Texas
the real estate. The other party is the investors. These are
the is the sec-
warehousing and more.
the coattails of someone who is.
South.
ond syndicator
most populous
state,
so there are in-
individuals who invest with the
and own
a percent-
In it’s simplest traditional example, a chef wants
to have
The primary parameters for selecting the •The highest rent
per
invested
dollar
for
a
deed
many
home
foreclosures,
age of the real estate as a result. They get all the benefits of especially
a restaurant and has the experience and willingness to put
best investment markets are:
major economic center in the United States, since there is such low housing costs and
property ownership, but they are not involved with acquiring
in the sweat equity but hasn’t sufficient money. He then
•Rent to purchase price ratio
and therefore, the highest cash flow
consequently a high percentage of govern-
the property, arranging financing (if there is a loan on the prop-
finds •Population
a partner who
has
no
experience
or
desire
to
run
the
growth and inward migration
•One of the lowest risk and safest harbors ment backed loans, but in spite of this, the
erty), doing the day-to-day management or disposition at the
business
but has the
money
and
desire climate
to reap the in benifits
•Employment
growth
and
business
the United States for real estate
Texas delinquency and foreclosure rate is
end of the hold period. Professional management is crucial to
of ownership.
A
formal
professional
syndication
reflects
the
•Housing affordability
•Lowest decline housing price from peak; relatively low compared to other states.
successful
commercial met-
or multifamily
is usually
same •Location
intent on a larger scale with more players. It the
indeed
only US single
digit depreciation
I believe ownership
that these and
factors
are another
provided
by
the
syndication.
is generally
synergistic win/win
•Cost of a living
ro
strong indicator of whether a metro has hit
relationship.
•Rental market
•Fourth largest and one of the fastest grow- bottom yet, and that many cities and states
IS THE
PROCESS
OF the lowest
•Current and projected market conditions
ing MSAs (Metropolitan Statistical WHAT
Area) have
farther
to go, so selecting
THREE
SYNDICATION double
Now that speculative investing for fast in the United States. Projected to A
risk metro is as important as seeking high
SYNDICATION?
profit
gone the way
of the last super- population to 12 million by 2030 There are current
cash flow.
many moving
parts to a commer-
WHY
DO has PEOPLE
INVEST
model,
the
wise
investor
is
focused
on
cash
•Broad-based
economy
that
has
had
double
During
the
last
two decades
cial
or
multifamily
acquisition,
opera- the appreci-
IN REAL ESTATE
flowing assets and safe harbors.
the employment
rate growth of the tion,
United
ation
average
was
about
5% per or year. With
1)
ORIGINATION:
planning,
and
disposition.
In
a
multifamily
SYNDICATIONS?
States during
the past decade
a 5 syndication
to 1 leverage the
with
80%
loans investors
due
diligence,
acquiring
prop-
commercial
due
diligence
Most investors do not have the
•No. 1 and
ranked
got a 25%
return
on
their down
payments
erty,
satisfying
registration
and
loan
process
steps
are
enough
to
choke
time, knowledge, or experience to
business
cli-
in
addition
to
the
high
cash
flow.
disclosure rules, and raising the
a horse. Hundreds of hours are generally Histori-
search hundreds of properties to
mate
in
the cally, the last economies to slow down, are
capital for the investment.
invested
by the syndicator and his team to
find a gem to acquire and under-
United States
the first to go back up.
secure
the
product including the research
write. But there are real estate
•No state in-
I don’t know when DFW will start ap-
2)
OPERATION:
the
sponsor
and
projections
for the regional market
companies who do this for a living.
come tax
preciating significantly again, but I believe
usually
has
the
expertise
to
op-
economics,
the
specific
product business,
By getting involved through a good
• L e a d i n g it will be before many other areas, and our
timally
manage
the
property.
the
demographics,
many
inspections,
and optimally
real estate syndication, investors
MSA for cor- window of opportunity
to invest
bids
for
any
improvements.
Then
there
is than we
have access to larger and higher
porate head- in any leading area may be shorter
3)
LIQUIDATION
OR
DISPOSI-
the
legal
process
and
finding
the
best
loan
quality investments than they could
quarter relo- think.
TION: resale of the property at cations source
with the
extensive
and and terms
on their own and gain the ability
In this along
economy
I prefer
to invest in
the
end
of
the
hold
period.
application
and
qualification.
It
makes
expansions
homes over commercial and multifamily
to invest in real estate without the
•Second lead- products because homes have more liquid-
Realty411Guide.com

PAGE 51 • 2015

reWEALTHmag.com
ing MSA in ity, are generally lower
risk, appreciate
US for For- faster, and one can build a “mutual fund”
tune 500 cor- by buying in various neighborhoods rather
COMPONENTS
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