BPI Episode #8: Protect Your Capital: The Power of a Strong Investment Team

Welcome to Building Passive Income, the podcast for professionals, entrepreneurs and investors who want to build wealth, diversify beyond Wall street, and create financial freedom through passive commercial real estate investing. Your host is Wayne Courageous iii, a seasoned investor and founder of CREI Partners, a leading commercial real estate investment company. He spent nearly two decades navigating and educating others on the commercial real estate, from multifamily to storage to retail. Each episode is under 15 minutes, intentionally short, easy to understand, and packed with insights that help you grow your income and protect your capital without becoming a landlord or sacrificing your time. If you're ready to learn fast and invest smarter, you're in the right place. Let's get started.

Hey, everybody. Welcome back to Building Passive Income. This is your host, Wayne Courageous, excited to do another episode about passive income. So who is all in a passive syndication investment. So we previously spoke about limited partners, but for this episode, I'm going to go through it again. Limited partners, general partners. The limited partners are passive investors who contributed capital and receive returns without any daily responsibilities. That's in essence what it is. All the hard work from a limited partner is doing what you're doing right now. Listening to podcasts, reading some books, going to conferences, potentially, you know, joining my passive investor coaching free, you know, program learning as much as you can. So you're asking the right questions and doing all the homework up front. So when you sign on that paperwork and you invest in that deal, you are truly passive. And so on the flip side of that, from a general partner, they're the ones who are managing the deal. They're finding the deals, they're raising the funds, they're sourcing, financing, signing on the debt, executing the business plan, doing the communications, monthly communications or quarterly. However they do it, we do on a monthly basis. But they're the ones providing that knowledge, that feedback to the limited partner and running the day to day. So the passive investor, AKA limited partner, can do what they want to do best, whether that's travel or focus on their career or whatever they want to do. You know, that's, that's the benefit of being a passive limited partner. But there's other groups that are involved in as well. Some include, like the asset management team. So the asset management team is typically the general partnership group. Maybe one is taking the lead but supported by the other general partners who are running the asset management calls. And for us, it's like a weekly call with our boots on the ground property management, where we're looking at collections, leases, unit renovations, all these different KPIs that we actually track on a daily basis, but we meet with property management on a weekly basis to go through the upcoming week. How did the last week go? So we're always like adjusting and nimble to the market and making and able to do like adjustments early instead of like oh, we're just going to meet once a month. So that asset management team is really important because they are monitoring the performance, managing the distributions, managing the communications, managing the property managers. They're the ones that are in essence going to ensure the property is going to stay on target or get off. That's a really important thing as a limited partner like yourself is understanding. It's who is doing the asset management, who on the general partner team is the decision maker. Who's that person who's has the experience and the track record to have that good landing at exit and getting you that cash flow and the development, whatever the business plan. Cause there's always different business plans for every real estate deal. But whoever is executing that business plan, who is that person that's going to be on the asset management team? I would say more so it's a very, very important thing for any limited partner to ask is who run an asset management? Now this is different than the property management company. Sometimes a property management company is vertically integrated with the investment company. We third party it or we, we prefer a third party for many different reasons. But they're the ones who are running day to day. They've got a property manager, they've got a regional, they've got a maintenance person. They're the ones that are driving our resident retention, our customer experience, getting in new leases, collections, possibly the eviction process, repairs and maintenance, capital upgrades. Those are the people that are assigned to the property more on a full time basis. Where on asset management. You know our senior portfolio manager at CIA Partners has about eight properties that he oversees and he's able to do that because he's got boots on the ground. Team members that are through these third party management companies. We also have a lot of partners, you know, vendor partners, whether they're vendors, electrical, plumbing, disaster recovery, et cetera. But we also have a lot of legal lending and cpa. So like for us like we have our real estate attorney helps draft the private placement memorandums and sponsorship agreement, et cetera. And then we have attorneys that help us negotiate the purchase and sale agreement, helps if there is one off letters or anything that we need to do. From a legal side, obviously we have our attorneys on team. We also have a CPA that understands real estate syndications understands K1s and maximizing depreciation. Those are things that we are the sponsor you want to know. Like we and whoever you're investing with has that team of support and they're using very professional, high caliber team members. We also have mortgage brokers, you know, people who go out and source loans and ensure that we are getting the best terms out there. That's possible. When a lot of times if you're going to buy your own property, you go to one or two banks. Well, when you're using a broker, especially on a bigger deal, we're able to hopefully use like Fannie and Freddie Mac rate, interest rates, interest only, period, all those type things. It really matters having that mortgage broker, that team on place all these team members and I include limited partners and as part of the team because without limited partners there is nothing, you know, we're, we're not, we don't have a property that we've closed. We need the limited partners, the limited partners, the general partners, the property managers, the asset managers, the attorneys, the CPAs, the vendor partners, who services our properties. This is a team sport, I guess is where I'm getting at and understanding that in a real estate syndication, as we talked about before, it's about pulling money together and buying properties and investments that you normally couldn't do on your own. But it's much more than that. It takes a team to execute on the deal. And as you are investing passively in real estate, it's important to understand again, who's running asset management, what's their experience, who's running the property management? Are they local? Do they have properties in the city that they're managing? If not, that's okay too. But you need to understand like what is their plan of action for when that employee that's on site is out sick or turns in their notice, like who's going to augment that position, right? If the maintenance needs help, who's going to assist the maintenance person? So those are all things to look at when you are evaluating. Evaluating, you know, a passive investment opportunity and understanding the lingo of, you know, all these different terms is going to make you a sophisticated investors, whether you're accredited or not. Being sophisticated and understanding what all goes into these type of deals, it's just powerful, it's massive. Because those opportunities of learning protects your capital because you're looking at and deciding for you if it's going to be a great opportunity or not. If you've got a great team, you can have a great opportunity but not a good team and you're going to have a bad deal. On the flip side of that, you can have a deal that looks a little hairy, but have a great team and really knock it out of the park. So anyway, I just, I hope everyone's enjoying this. Please subscribe. Please, like share with your friends, your family. You know, we're just getting this started and really appreciate y' all listening and being part of this journey with us. We want nothing more than to educate passive investors to help them help you make better investment decisions. So we're all growing together and doing great things from our investment standpoint. Hope everybody is doing well and has a great day. If you need anything, definitely reach out. Definitely check out passiveinvestorcoaching.com free more education. And of course you can check out our website@creipartners.com till next time. Hope everybody has a great day and we'll talk soon.

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