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EP #125 The Mechanics Of Large Real Estate Syndications With Tim Bratz

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Diving Into Real Estate Syndications

In this season 2 of the Alchemist Nation Real Estate Podcast Episode #125, I talk to Tim Bratz who breaks down the mechanics of syndication. He came from a single-family world and you shifted into the syndication world and when I told him that he was a pro in syndication, his response was that he has never read a book or taken a course. I want to know how he got into the syndication world in the first place.

He says that he comes from a single-family as mentioned where he has wholesaled houses, flipped houses, has had a turnkey rental business, built a management company, has had vacation rentals, office buildings, mixed-use buildings, self-storage buildings though his bread and butter is an apartment building. He has 4,288 units and 90% of that are apartments. He bought his first apartment in 2012 by accident where he had private money and the market was at barrel pricing and he then came across an 8 unit building for $30,000 C-Class in Cleveland, Ohio.

The building needed some work but he couldn't pass it up, so he got some private money bought the building, put in another $50K in it, it was occupiable and he was renting it for $500 a door on average and there was a 35% cap rate which was insane according to him. He just did it again, just bought another 8 units, 14 units, 23 units and he just used private money which was other people's money. He gave up almost 67% on equity split not knowing syndication to his private lenders.

Scaling Up In Phases

I wanted to know what Tim looks up for himself for 2021. He says that in the past year everyone was in go mode which is the same case with him. This year is kind of different because of covid, he went on a buying spree in 2019 where he picked up 2000 dollars and allover a sudden covid hit. They were almost done with renovations and the lease-up wasn't there. They really focused on operations and stabilizing their portfolio and if you don't have a deal, you are not going to have 100 unit buildings fall on your lap.

So you're organically going to grow the portfolio where you have to buy the 15 units, the 5 units, the 50 units before you get into the 150 or 500 units. For him, he went through that phase and he bought a lot of small buildings that were under 100 units that got him where he is today but now they're too management intensive. So he is selling off that he has that is under 100 units and everything that is more in a c/c+ area. So he is hanging on all his a and b properties, so it is half of his portfolio that he is selling right now, most of which are under contract.

How Did He Go From Small Deals To $20MM Deals?

Tim has been talking about 10, 15 years and I wanted to know which year did he first buy his first real estate property. He says that in 2009, he bought his first real estate property. I further ask Tim what is the biggest thing he can get from somebody you know for 2021. He says that their thing right now is to try to get a portfolio to the finishing line and essentially they're sourcing some big deals.

He is looking for $20 million per deal, light value adds of 80 to 90 occupancy, has some rooms to bump up rents, needs some cosmetic updating, apartment buildings that are typically 200 units. They are going to launch their fund where their investors get money from all the deals, put some capital there and also bring in some outside debt to invest in the fund. Typically you have 50 million dollars, then you can go to the bank and they give you a line of credit for 50 million dollars, then you have 100 million dollars as buying power for a down payment.

3 Pieces Of Advice

Tim offers 3 pieces of advice to 20-year-old Tim on how to get where he is much faster and happier.

    • Work harder on yourself than you do in business
    • Join the mastermind.
    • Focus on revenue-generating activities.

To learn more check out the blog and podcasts at http://www.GualterAmarelo.com To register for our Saturday live webinar to start your wealth journey, visit http://ibuildmillionaires.com To listen to more episodes of our podcast, visit: https://anchor.fm/alchemist-nation To join the 100 millionaires summit, visit http://ibuildmillionaires.com/summit To get in touch with Tim Bratz, follow him on Instagram: https://www.instagram.com/timbratz/

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