Syndication is different from a fund. There are particular circumstances under which it makes more sense to go with a fund. So what are the differences between a fund and syndication, along with the similarities between the two? We answer those questions in today’s #Highlights episode with Brian Hamrick and Michael Episcope.
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Brian highlights the fact that returns from funds will always be different and that it is so important that you and your investors are on the same page. Meanwhile, Michael details how they structure their funds – income plus fund and QOZ and he emphasizes the need to create a better fund structure and meet the market demand. Listen now and learn how to build your fund today!
Key Points From This Episode:
- Brian shares his past experience, as well as his latest venture which he focuses on in this episode.
- The differences between a fund and syndication.
- Some key elements that should be considered when putting together a fund are.
- Make sure that you understand the expectations of your investors and that they understand yours.
- Returns are always different.
- Brian explains some of the different methods used by funds.
- Michael talks about funds – what he uses funds for now.
- The number one rule in investing is don’t lose money.
- Michael shares reasons why a lot of investors use sidecars.
- How are sidecars deal-specific?
- Michael elaborates on the $150M deal they are working on for the fourth quarter of the year.
- Common ways to structure funds.
- Michael talks about their Income Plus Fund and QOZ Fund for investors.
“You want to identify what the asset is going to be. Is it going to be apartments, is it going to be retail centers, is it going to be cryptocurrency? Whatever it might be, identify that but then also think, “Well, what if we’re investing, what if we’re only going after retail but we come across an office building that’s distressed that we can pick up and it makes sense?”’ – Brian Hamrick
“You have to know your investors, what are their timeframes? I mean, I have investors who are in their 70s and they’ve told me, “I don’t want to invest in something for 10 years because I may not be around for 10 years.” Does that mean I need to make it a five-year fund and is that – would that even work with the type of asset that I’m buying under the parameters under which I’m buying them?” – Brian Hamrick
“Rule number one in investing, don’t lose money.” – Michael Episcope
“The wrong deal can take the whole fund.” – Michael Episcope
Links Mentioned in Today’s Episode:
About Brian Hamrick
Brian Hamrick controls over $32 million in the apartment, self-storage, and office commercial real estate, as well as performing & non-performing notes. He has raised over $9 million from investors through syndications and funds, and he also hosts the “Rental Property Owner & Real Estate Investor Podcast.”
About Michael Episcope
Michael is the principal of Origin, co-chairs the Investment Committee, and oversees investor relations, marketing, and company operations. Michael brings 25 years of investment and risk management experience to the company and believes that calculated risk-taking in inefficient markets is the key to building wealth. He frequently shares his knowledge with individual investors on Origin’s blog, Forbes and HuffPost, and his expertise has made him a frequent speaker on real estate investment panels and podcasts.
Michael learned about the physical aspects of real estate in his youth as he helped his grandfather manage his apartment buildings on Chicago’s west side. He began college at DePaul University and a year later was introduced to the floors of the Chicago Mercantile Exchange. He continued to work full-time on the trading floor for the next sixteen years while attending night courses to complete his undergraduate degree. After rising from runner to broker, Michael was allowed to become a floor trader by a Chicago-based hedge fund, Tradelink, LLC, and then had a prolific nine-year trading career, twice named one of the top 100 traders in the world by Trader Monthly Magazine.
With two kids and another one on the way, Michael cashed in his chips and retired from trading in late 2005. His new focus was on managing the wealth he accumulated and enrolled in the Real Estate master’s program at DePaul.
Michael is the former president of the DePaul Real Estate Alumni Alliance and a sustaining sponsor of the DePaul Real Estate Center. He has been a Vistage member for more than six years and lives in Chicago with his wife and three children. He enjoys traveling with his family, snowboarding, and frequents ski resorts all over North America.
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