Nov 1, 2019
Most investors love to talk about their favorite multifamily deal. John loves to talk about his worst. After doing a JV to acquire a 62-unit, all the residents left and they ran into major issues when all the tenants left. They ended up doing multiple capital calls to get the project back on target. He also co-syndicated a 41-unit deal where all is running smooth. John hosts the Passive Investor Show and, on this episode, we talk about the lessons learned between the two deals, why communication with tenants is critical, and why passive investing is the best path to being a general partner.
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Key Insights
- Joint Ventured on a 62-unit, then co-syndicated a 41-unit
- 62 unit became a “dead asset” that is not generating any income
- Emptied out one of the buildings, but then other tenants left out of fear
- Lessons Learned: Clear communication with residents on the plans, proper reserves for renovations
- 41 unit was syndicated and delivering projected returns
- Smooth operations based on renovating as leases expire
- Structured renewals to spread out expiring leases
- The decision to clear out the building was driven by a need to repair decks
- JV deal – all partners are actively involved; Syndicated deal – some partners are passive and only receive updates
- Why a Capital Call on a JV deal is different than on a Syndicated deal
- Streamlined content to be in note form for easy consumption
- Teaches passive investors why and how to invest passively
- The best way to become a general partner is to become a passive investor first
- The fastest way to learn is to invest your money – get paid to learn!
Bull’s Eye Tips:
Most Recommended Book:
The Third Door Alex Banayan
Most Recommended Digital/Mobile Resource:
LinkedIn, Instagram, Facebook, and MailChimp
Daily Habit
Working Out and Meditating (breathing to control his heart rate)
Wish I Knew Starting Out
Communication with tenants
Wish I Knew Last Year
What’s one thing you know now that you wish you knew 12 months ago?
Real-World Advice
Start doing what you want to do as soon as possible
Advice to Ignore
Don’t limit yourself to one thing
Current Curiosity
Deal structures and modeling
Best Place to Grab a Bite
Deed’s Diner - Brockton
J’s Café - Brockton
Cape Cod Cafe
Salero
Connect with John:
Website: Passveinvestorshow.com
Email: john@johnfortes.com
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