Risk mitigation is an incredibly important part of any deal. While passive investors may not have direct control of this, they need to understand how operators analyze their deals to prepare for any potential negative outcomes. This is why passive investors must know how to vet syndicators, and today’s guest, Hans Box, Senior Direct at Old Capital Lending and Principal at Box Wilson Equity, joins us to share insights on how to see if the operator is right for you. In this episode, we hear Hans’s story about leaving his W-2 to go into full-time real estate, the first deal (that nearly wiped him out completely), and how he met his current partner.
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We then move onto sponsor vetting, where Hans highlights what passive investors should look for, including transparency, deal value-add articulation, and scenario analyses. Sponsors should be able to readily share all of this, and Hans gives us guidance on the best questions to ask operators to ensure they are honest. He also highlights what passive investors should look for in the operating agreements. We wrap the show up by looking at what the next 12 months could hold for real estate, why syndication newbies need to be patient, and much more. Be sure to tune in today!
Key Points From This Episode:
- Hans’s background, his transition from the corporate world to multifamily, and what he’s up to now.
- The incredible story of Hans’ first deal, where he got thrown into the deep end.
- How Hans realized that he could not depend on a W-2 as his only source of income.
- What gave Hans the confidence to ultimately leave his W-2 to pursue syndication full-time.
- Sacrifices Hans made when he gave up his job at the same time his wife went to law school
- Some of the most important things to consider when vetting a potential sponsor.
- The best questions to ask to gauge an operator’s level of transparency.
- Hear some of Hans’ deal criteria like having a preferred return first and fees.
- The importance of looking at the operating agreement and understanding how distributions are handled.
- Hans’ preference for industrial real estate and why it is a great investment, especially now.
- The hardest part of syndication and how Has prepares for a downturn.
- Some of Hans’ predictions about what is in store in the next 12 months for real estate.
- The likely developments in the lending landscape over the next six months.
- Hear how Hans has cultivated his discipline over the years to succeed at the level he has.
- Daily habits that help Hans succeed and what he would do differently on his first deal.
- A recent business improvement, meeting new investors, and the number one contributor to Hans’ success.
- The way Hans likes to give back and how to get hold of him.
[bctt tweet=”A good sponsor can turn a bad deal into a good deal and a bad sponsor can buy a great deal and destroy it. — Hans Box” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Hans Box
Hans Box is a Principal in Box Wilson Equity and a Senior Director at Old Capital Lending, a top provider of commercial capital solutions in the Texas market. His background is in the accounting, business strategy consulting, and real estate industries. He has been directly involved in the acquisition, investment, and management of over $350MM in multifamily and self-storage assets and has asset managed ~3,700 multifamily units and has invested in or had equity in ~4,300 multifamily units and ~2,000 units of self-storage. In his role as Senior Director at Old Capital, he assists commercial real estate investors in finding debt solutions for the acquisition and refinance of their properties. As an avid investor himself, he understands how to look at deals from an investor’s standpoint. Old Capital specializes in loans from $1MM+ in all the major real estate asset types. Box Wilson Equity is a private equity firm specializing in placing equity in cash flowing real estate. They have invested over $30MM since 2013 into multifamily, self-storage, mobile home parks and distressed debt.
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