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
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 notes 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 – https://www.amazon.com/Third-Door-Uncover-Successful-Launched/dp/0804136661
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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