Multi-family investing is a team sport. Sometimes, we can get so caught up in “the deal” that we forget that this business is really about people.
I always encourage active investors to establish their team early on, before they even start to look for deals. For you, the passive investor, the key is to partner with an experienced operator or syndicator. One that has already been in the weeds to evaluate the market, sub-markets, and the properties within those markets.
This is why selecting the right operator is the #1 most important part of passive multifamily investing. You need to have confidence in the team that you are putting your money behind. And if you have a great operator, you can trust that the deal will be done right, even if you know very little about the deal itself.
After all, isn’t that the reason you’ve chosen the path of passive multifamily investing? To reap the rewards of real estate investment while riding on the backs of experts?
If you’re new to passive investing in this space, I am going to show you how to vet a quality syndications team.
Evaluating the Team
Passive investing is all about partnership. When evaluating the team you’re considering investing with, it’s important that you look to both the team as a whole, as well as the individuals that makeup that team.
- Things to consider:
- How many people are on the team? Who is in charge?
- How many deals have they done as a team/individual?
- How aggressive/conservative is their underwriting style?
- How much capital have they raised and deployed to date?
- How many investors do they have in their syndication?
- What’s the average rate of return for their investments?
- What is their experience investing in the multifamily space?
- What is their experience investing in a particular market or sub-market?
Take Nighthawk Equity, for example. Nighthawk has built a strong record of over 1,100 performing multifamily units, with a portfolio value of over $44.2 Million. We are conservative underwriters that have evaluated and purchased properties in markets across the United States. And we have a team of people that are dedicated to key development areas:
- Investor Relations
To see the deals we’ve got brewing, join the Nighthawk Investors Club.
Taking on Green Teams
Obviously, it’s ideal to partner with a team that has years (or decades) of experience and a solid track record. But every team starts somewhere, and I don’t think it’s necessarily a deal breaker to partner with a newly assembled team.
In today’s environment, there are new partnership opportunities that spring up all the time. A fairly new investor may have access to a property deal or to a capital raise. At Nighthawk, we will take on these investors as joint ventures. So, while these partnerships may be young, that doesn’t mean the value isn’t there.
The way I look at it; just because someone doesn’t have a track record as a multifamily investor, doesn’t mean they don’t have a track record in life. Consider their related or unrelated professional experience. What has their career been? Do they have a track record of success? How have they dealt with difficult situations?
This is especially applicable for friends and family investors. At the end of the day, you are investing in the person. (Remember, this is a people business!) There is certainly value in knowing and trusting the person you are doing business with.
Now, it’s up to you to determine if you’d prefer to stroke a check to a group you don’t know well, but trust their investment track record. Or, invest with a person that you know and trust, but may lack experience in multifamily investing. In either case, don’t just trust your gut. Do your research and ask the tough questions to make sure they’ve done theirs!
Building Long-Term Partnerships
The most successful passive investors are literally able to quit their job and live off their passive income. And that’s really the goal at Nighthawk; to enable passive investors to quit their day job, if that’s what they wish to do. Or, they can keep that full-time job and let their investment income compound over time for an even more comfortable retirement later.
Regardless of their personal long-term strategies, the most successful investors typically have one or two operators (maybe three at most) that they invest with. We’ve recorded hundreds of podcasts now, and this is a recurring tactic of the ultra-successful investors. Like us, they look to build long-term relationships.
The average investor might put in the minimum investment of $50,000 into Nighthawk just to see how well the group performs. And that is a great way to test the waters. But we are looking for long-term partners as well. We know that if we like the partnership, we communicate well, and we do what we say we’re going to do, we’ll have a great shot of being that investor’s main operator.
Because, ultimately, if an investment performs well, there’s really no reason why an investor couldn’t or wouldn’t invest with the same operator, over and over again. It’s a win-win scenario to build a long-term partnership. One where both parties can establish trust AND a track record of success.
We do encourage you to check us out and invest at the minimum level, to see how we do. Just know that we are looking for long-term relationships because that is how we are going to build the business and keep our investors happy.
If you’re still new to this and not quite sure what to do next, I’ve put together a report that compares the stock market to a multifamily real estate investment strategy. It’s a great report and totally free. I think you’ll find it eye-opening.
If you already have a deal under your belt, or you are ready to get started with passive deals, you’ll want to get on our deal list. To see the deals we’ve got brewing, join the Nighthawk Investors Club. After joining, we’ll schedule a call to get to know each other and see if makes sense to work together.