The Hands-Off Investor: An Insider's Guide to Investing in Passive Real Estate Syndications

The Hands-Off Investor: An Insider's Guide to Investing in Passive Real Estate Syndications

by Brian Burke

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Overview

Finding an experienced syndication sponsor matters now more than ever. By learning to select the right sponsors and properties, you’ll find the best deals and mitigate risk during times of economic instability!

Want to invest in real estate but don’t have the time? No matter your level of experience, real estate syndications provide an avenue to invest in real estate without tenants, toilets, or trash—and this comprehensive guide will teach you how to invest in these opportunities the right way.

Syndications are like the stock mutual funds of the real estate world—multiple investors passively invest into a fund, while a manager is responsible for picking the real estate and managing the portfolio. Author Brian Burke, a syndications insider with decades of experience in forming and managing syndication funds, will show you how to evaluate sponsors, opportunities, and offerings so you can pick the right sponsors and achieve the highest odds of a favorable outcome.

Inside, you’ll learn:

  • The practical skills you need to understand income, cash flow projections, and investor waterfalls
  • How to find syndication investment sponsors and how to evaluate them for the best possible opportunities
  • Red flags to avoid and tricks that syndication sponsors don’t want you to know
  • The biggest and most common underwriting mistakes that sponsors make
  • How various debt options affect risk and return
  • Typical sponsor fees and profit splits
  • The tax implications of syndication investments
  • How to measure alignment of interest, judge performance projections, and more!
  • Product Details

    ISBN-13: 9781947200272
    Publisher: BiggerPockets Publishing
    Publication date: 05/05/2020
    Sales rank: 247,029
    Product dimensions: 5.90(w) x 8.90(h) x 0.50(d)

    About the Author

    Brian Burke is CEO of Praxis Capital Inc., a vertically integrated real estate private equity investment firm. Brian has acquired over half a billion dollars’ worth of real estate over a 30-year career, including thousands of multifamily units and more than 700 single-family homes, with the assistance of proprietary software that he wrote himself. Though he prefers to reposition existing multifamily properties, he has also subdivided land, built homes, and constructed self-storage. Brian is a licensed pilot, so when he isn’t investing in real estate, he can be found, literally, in the clouds.

    Table of Contents

    Introduction 10

    Section I Investing in Syndications 14

    Chapter 1 The Hands-Off Way to Real Estate 15

    Chapter 2 Sponsors and Offerings 31

    Section II Evaluating Sponsors 46

    Chapter 3 The People 47

    Chapter 4 The Process 64

    Section III Evaluating Real Estate 83

    Chapter 5 Real Estate Basics 84

    Chapter 6 Bottom-Up Analysis 102

    Chapter 7 Understanding Gross Income 119

    Chapter 8 Net Income and Cash Flow 136

    Chapter 9 Performance Indicators 156

    Chapter 10 Debt Structure 173

    Chapter 11 Capital Improvements 197

    Chapter 12 Cap Rate and Valuation 202

    Section IV Evaluating Offerings and Structure 218

    Chapter 13 Investment Structure 219

    Chapter 14 Underwriting and Projections 240

    Chapter 15 Sources and Uses of Funds 262

    Chapter 16 Waterfalls 271

    Chapter 17 Fees 300

    Section V The Investing Process 314

    Chapter 18 Making Your Investment 315

    Chapter 19 During Your Investment 328

    Chapter 20 After Your Investment 347

    Chapter 21 Conclusion 352

    Appendix A 354

    Acknowledgments 361

    What People are Saying About This

    From the Publisher

    “For far too long, many of us, including myself, have evaluated sponsors by making a small investment to ‘test them out.’ No matter how small that investment, it’s not going to be less than the cost of this book and a couple of hours of time… I highly recommend this book if you want to learn the right questions to ask to make better investment decisions and become a better steward of your own capital.”

    —Mark Abdou, Securities Attorney, Libertas Law Group

    “This book was extraordinarily well done—clearly written, well organized, and appropriately detailed… A good reminder that ‘passive’ investing in real estate also requires lots of time and experience.”

    —Chris Demetra, Passive Investor

    "I wish this book had been around 10 years ago when I started syndicating. It would have saved me a lot of struggle! Brian is the type of person you wish you could have lunch with once a week to "pick his brain”… But since there are too many of us who want his time and precious advice, the next best option is having access to the wealth of knowledge he packs into this book. It will no doubt help thousands of passive investors make better and more informed decisions on where to invest their hard-earned money."

    —Kathy Fettke, Co-CEO of Real Wealth Network and host of The Real Wealth Show

    “The content [is] very understandable, yet Brian’s knowledge is encyclopedic enough to be used as a text in an undergraduate real estate course or a training course for commercial real estate analysts or lending officers. Wow!”

    —Steve Darby, MBA, Passive Investor

    “I am glad that Brian took the time to write this book for the passive investor community, as it has been needed for many years. I look forward to recommending this book to fellow passive investors, as I have no doubt that most, if not all, passive investors will benefit from reading this.”

    —Jeremy Roll, President of Roll Investment Group

    "If you are going to invest your hard-earned money into passive real estate investments, then you owe it to yourself to invest two hours of your time digesting this book—the ROI will most likely be better than any real estate deal you allocate to. Most investors learn what is taught in this book the hard way… through getting burned, frustrated, taken advantage of, or ignored after their money is taken.”

    —Richard C. Wilson, CEO and Founder of Family Office Club

    “[This book] is full of insights from an industry insider's perspective and digs deep into showing how the sausage is made… Well-organized, clearly written, and comprehensive—but like peeling an onion, with each layer providing more granularity and technical details that keep the reader engaged.”

    —Joe Fang, Passive Investor

    Customer Reviews