Today’s guest is a real estate investor, syndicator and founder of McKenna capital, a private equity company that focuses on value add multifamily, self storage, and other alternative assets. He’s helped hundreds of investors invest in over 10,000 units with a value north of $1 billion.
What You’ll Learn In Today’s Episode:
Number one, an advantage of passive investing is diversification. You can spread smaller amounts of money and participate in multiple deals across multiple markets. Even if you’re an experienced operator in a specific market or strategy investing passively allows you to diversify your focus and get exposure to other sectors.
Your sponsor experience is key. Have they been through a downturn? Real estate, goes through market phases and they’re not all as easy as the unprecedented expansion phase we’ve seen for the last several years, ask to see completed deals and past performance. Ask to speak with other investors.
Remember, you’re investing in a sponsor. If not more than the actual deal itself, proformas can be skewed, tweaked, fudged, and completely baked. So make sure you trust your operator. Are they experienced? Are they honest? Are they willing to tell you the truth? Even if it may cause you not to invest with them, you must demand unflinching, honesty and integrity.
If you are passionate about real estate, enjoy networking, talking to people and bringing value. Then fundraising for syndications can be a rewarding way to participate in this business. If you’re interested, here’s what you do. Build your network. Learn how to vet deals and sponsors. Make sure the deal is solid and make sure the operators have experience and know what they are doing.
Know what they’re doing because your reputation and livelihood depends on the skill and integrity of the operators you have partnered with. If your sponsor lacks experience or has overly optimistic pie in the sky, or their underwriting lacks transparency.
“Most investors who get in for the first time, just a little nervous and not sure what to expect, but then after they do their first investment, it becomes a strategy and a longterm plan and is put into place. And you just kind of can rinse and repeat that process. And you’re basically building out like your own private equity, real estate portfolio.” – By Ryan McKenna
Resources In Today’s Episode:
Book Mentioned In Today’s Episode:
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