Let's do a deal deconstructed
all the way from choosing the

deal to do all the way through
to getting it closed and funded.

This is a video I recorded about
two years ago, with a very small

group of new syndicators. It's
kind of the kind of work that I

do a lot of times with my
clients today that we don't

offer the coaching program
anymore, I hope you find it

useful.

Basically, what we're going to
be doing is we're going to be

doing a deal deconstruct it. Now
we're gonna go from beginning of

the deal all the way to the
close of escrow. You all can see

my screen, I suppose. So I will
go ahead and get started. So how

do we do this. So we've got a
syndication that's for, you've

decided to start looking for
properties, you've got your fit.

And your fit is, basically what
you're looking for is you're

looking for medium to low risk
properties, you've decided

you're looking for properties
that are something like mixed

use or something with some sort
of retail component to it in not

a areas, but maybe those B and
C, maybe even D if it was the

right opportunity. But that risk
level needs to be moderate to

low, you're looking at, for a
first deal somewhere in a price

point of a total cost of between
3 million and 5 million. And

these are just a scenario. So
this isn't me telling you what

you need to do for your own
founder investment theory. This

is just the scenario that we're
working with. So let's start

oops, with the fit. So you're
you're looking at moderate to

low,

make it a little bit finer
point. moderate to low risk,

better.

You are looking at between three
to 5 million to start in total

cost.

You're looking at B to see maybe
the areas and it should be mixed

use flax and have a retail
component.

All right. Does that all make
sense? That's sort of the basis

that we're going to be going
through. So to do this, you do a

survey of the area and you
identify three properties. So we

have the first property here.

We'll call this one Wilson. You
have another property here

call this Xavier.

And then I realized when I was
taking my notes I skipped why.

So this one's

Zapier.

We don't have a why. Maybe you
thought maybe you saw why but

you immediately rolled it out.
So what are these three

properties? These are three
properties that kind of made it

into your bucket to kind of
check out because all you know

every day you're you're doing
your base hits, you're going

through properties, you're
meeting with investors, and you

are just trying to find things
that are worth looking a little

bit deeper into. So let's start
with Wilson. So Wilson is a

Flexbox Wow. Okay, Wilson is a
flex building. Oh, digressing

for one quick second. If for
those people who watch who are

watching this live on workplace,
just FYI, we've noticed that it

that workplace doesn't really
stream it in a very good high

quality image. And so this will
be while we upload this as the

better image so you'll be able
to see it more clearly. It's

just a because we're trying to
stream through zoom and then it

gets priority over going to
workplace that's why it happens.

So it will be uploaded. So sorry
about the digression. So Wilson,

it is a flex building it is out
at 3.3 million

at a 8.5 cap

and it is so it has

eight tenants in it has

a billboard

and a cell tower.

So, I should also say one of the
things you're always that that

you're really looking for on Fit
to is your strategy. And I

forgot to write that down here.
So our first strategy here is a

value add strategy.

And so your guests have the
location is a c plus, and you're

guessing whatever your play is,
would be probably somewhere

around a five year old. So let's
actually have to move these

oops,

let's be a little bit over make
a lot more room.

Okay, so Xavier is a is a triple
net development project. So it

kind of crosses between maybe
retail a retail use, but it's a

triple net project. It's a
development project that's come

to you from a developer that you
know, and the total amount they

need to raise is 4.5 million.
There's no cap rate because this

is a development deal. So they
don't know but your best

estimate is that it probably be
about a 30% return. So that's a

really good return obviously it
is in a B location. And it would

be a three year hold. This oh I
should add would be a move put a

moderate risk. This will be a
very high risk. All developments

tend to be high or very high
risk. Zapier is a multi tenant

retail. And these are all
properties that I've

underwritten before to I've just
modified to slight things about

them. So they're their
properties I've done I've worked

on there they are. They are
real. So we're working with with

pretty live data. So Zapier is a
multi tenant.

Retail

it is priced

at 5.2. A eight cap the location
is a c minus

10 year hold. Now the location
is a c minus here because it's

in the middle of nowhere. So
it's just there's nothing really

around it and it's a multi
tenant retail space. It is a

tenure hold. And you might think
it because it's a multi tenant

retail, there's not really and
there's no real added value

added component to it, that it
would be fairly low risk. But as

you look at it, you know,
everything is kind of just

pointing to just risk of being
in the middle of nowhere risk as

to its actual how it's seated,
risk. All just feed in and make

it clear. This is a high risk
project. And it doesn't even it

doesn't really have a it would
be categorized as a cash flow

property on your different
strategies. So just to remind us

we're talking about

on the complexity versus time
continuum.

We're looking at So the greater
the complexity, the higher the

risk in a fairly low time is
your value add, you could

certainly hold it for longer,
but the maximum juice will be

fairly short. The a development
project is very, very high,

you're stabilized add value

is just has that longer time
horizon, but has that high

amounts of complexity because
really, what you're trying to do

is you're trying to identify
what the below market rents are,

and then you're trying to also
go to you're trying to make it

so that you normalize that
normalize the vacancy to bring

people up. on your, on your less
complex deals, you've got

undervalued properties, this is
almost like a flip. Except you

wouldn't be making any
improvements. And then, much

more complicated is a cash flow
property, I mean, much more time

intensive as a cash flow
property. Where you're just

waiting for appreciation to take
hold. So these are the the basic

strategies. So we've got three
deals here. And we've kind of

outlined what we've got a bit
now. I have my own beliefs on

what, what way we should go with
this. But let's open up so

anybody want to go off mute and
say which one we think this is

better for our fit? And then
we'll go from there. Anybody go

off mute? Have somebody? Triple
Net? Okay, triple net. But what

about the fact that it's a very
high risk, and you're fat,

you're fit scores of moderate to
low risk? Strategy.

welcome you.

Well, so thinking, close that
what it says very high risks?

Yeah. I just been, I guess a
little more partial bias towards

triple net developments, because
it's a new construction.

Therefore, you're not dealing
with too many headaches when

terms of maintenance, you know,
complete tenant responsibility.

Be location sounds decent.
That's why I'm not really

understanding the very high
risk. And then it's a

development Yeah,

well, it's a development deal.
So it's very high risk. So

you've got you know, anything
can happen during that

development cycle, you've just
will probably come into it with

a lease that's been put in
place, but hasn't really been,

they haven't even moved in yet.
So they may decide never to

occupy it, because it doesn't
exist, right? It's just ground.

And what happens when the city
decides not to give permits, or

they like to slow things up,
it's not high risk in terms of

they're gonna lose all their
money, because that's probably

not too likely. But that three
year old can become a five year

old or a six year old, which
just kind of quashes your return

down. And suddenly you look like
a chump for telling your

investors they'll get the money
back in three years. When it's

now been six years. Does that
make sense?

Yeah, you're saying that well, I
mean, that's that's true I to an

extent, but at the same time, I
feel like if you just hold it

longer, you're just you know,
still getting that cash flow.

It's not the worst position to
be

sure. That's that's a valid
thing. Does anybody think

another property would be good?

And I'm assuming story that the
triple net development has

signed tenants already in place

Yeah, yeah, he wouldn't look at
it if there wasn't anyone else

have a opinion Wilson Xavier
Xavier

Wilson Wilson's All right.

Wilson's All right. Yeah.

What do you like about it?

I liked the lower risk. The cap
rate seems pretty high going in.

You don't have to raise that
much money compared to the other

two. Yes, a desirable product.

Yeah, I would say I mean, if I
were choosing I I would choose

Wilson. And I actually have
underwritten that Wilson for

this project. So Wilson is the
correct answer, but they all are

actually, they're all correct.
Except Zapier, I think it's a

terrible property. So Wilson is
a is actually the one I would

recommend based on a couple of
things. So it'd be based on its

its moderate risk, which matches
your founder investment theory.

So what the point I'm trying to
make here is, this is a great

return that you get with this,
but it's also taking you very

much outside of your, your, your
founder investment theory. So

you've got now a high risk
product. So you've spent all

this time cultivating these
investors. And when you're

trying to match them up to it,
suddenly, you're bringing them a

very high risk product, it's
gonna be hard to make the case

that they should go into it when
you've been telling them, Hey,

we're all about low risk or
moderate risk. And, and

suddenly, you're bringing this,
this development piece, which is

going to be hard to convert, the
dollar amount is a concern,

because it's, as you said, it's
it's four and a half million on

Xavier. And it, it just isn't
quite there. What also I think

is important is that you've got
this, these eight tenants with a

billboard and a cell tower,
because there's probably a value

add component to this.

So oops,

get my so what we do with this
from this point is so now we've

we've identified these three
properties. And what we've just

done, is we put them through a
funnel. And so first, the first

thing we've done is we've looked
at them through the lens of how

do they fit with your founder
investment theory. The next lens

we look at it through is we do a
basic underwriting. And then the

last fit, the last step is
probably to survey some

investors, you know, the people
in your list is this something

that they would be interested
in, you're gonna cut out a lot

of the making mistakes about
doing something that you think

is right. And I think what would
happen is, if you were to bring

Xavier to them, you probably
find out that you have a problem

with your risk Matt, with your,
your risk profile for the

investors not matching up with
the investors. So out of out of

this, you know, ultimately,
you've got a shiny new property

that you've identified.

That's a training.

And so let's share the other
screen, let's share my

spreadsheet. So the just a basic
underwriting, we'll probably go

through underwriting in part two
of this because I want to get

kind of through the whole deal
first, and then come back to

the stock the share, go, and
then we'll share it again.

And then I'll share again, what
the then what we'll go through

and go through more detailed
like projected cash flows and,

and how we got to where we got.
So let me make this a little bit

bigger, because I know the
screen is probably a little

small on your side. So not that
big.

Okay, so this is one way to do
it. This I'm actually rebuilding

these sheets, so that y'all can
see them a little bit better,

and use them better. So these,
this is the original version

that I have of how I calculate
projections, and do my very

basic underwriting and then but
we are going to rework this to

make it more useful for you. Now
it'll be in the next couple of

weeks. We'll have nice
spreadsheets for that. So but

basically, it starts with your
acquisition cost 3.3 million. I

build in a reserve account, but
for pretty much any kind of

investment to make sure that we
can cover costs. 50,000 is

probably a little low for a
property like this, but we'll

we'll use it for the time being
the cost of startup this is

really just your filing fees for
the entity This is the main

basically making sure you get
reimbursed for the things that

have been out of pocket, like
like the filing fees or your

form D is is free, but your
filing with your local state

does cost money or you know,
getting an accountant or your

your printing costs, etc. Your
cost of financing really is just

loan points in in this
particular scenario. So you can

take point, you can take cost of
financing and add that to your

your costs as well to that would
ultimately go to the syndicator.

But for what here at what I'm
using in this scenario is a just

a very simple calculation that
shows just the loan points and

that's just a 1% loan point plus
$10,000 to cover any additional

costs, like your appraisals,
etc. You've got your acquisition

fee. Now this is just your
brokerage fee. So this is

getting a 2% brokerage fee on
the on the purchase price. So

the cost to fund this is
basically takes into account all

of these costs, and then it
subtracts the loan amount here.

So this is the amount of equity
you ultimately have of money

that you ultimately need to
raise. So I'm did this based on

$1,000 a share. So 1303 shares,
and then giving you as the

syndicator at 20% off the top,
if you're buying this property

at a good IRR. And we'll go
through this in the in the next

video about the next call about
that balancing about the IRR is

that you think would be
acceptable and you're getting

paid as much as you can, I think
that you could take 20% off the

top and I've done it. So that's
why I think you can whether you

could take more than 20%. I
don't know on a project like

this probably not. But you could
probably take 20% Off the top as

your equity. So that ultimately
looks something like that

they've got a VAT, your total
number of shares in your company

itself is 1564. And then
ultimately, it has an IRR of

18.7%. So that's that's a good
IRR, it's actually on the high

side for that moderate to low,
moderate, low risk profile. And

I think you would do that by
basing, you're making sure that

your investors know that where
the risks are, and what that

does really does kind of more
categorized under that lower

risk. And we'll go through that
too, again in the in the next

call.

So let me stop my share.

All right, does that make sense
so far about the underwriting

piece? And how we get through
the fit? And we've ultimately

got a good selection to go
forward with Are there any

questions at this point?

Actually, I do, but it's to play
around with the math of how

everything's calculated just
remain the same, but I think

it's gonna take some time. So
maybe

that's what we'll do in the
other in the next call. So then

we'll go, we'll go much more
deep on the underwriting so that

way, you can see how that all
works out and how you kind of

play back and forth and make
those numbers work for you. Does

that make sense? Yeah. Great.
All right. Any other questions?

Okay, great. All right. So now
let's share

so we're back here, you've got
this big, shiny new building,

and you know, it's the right
one, what is the next step, the

next step is to commit.

So you need to make a
commitment. You need to make it

happen somehow you need to lock
this property up because it may

not be forever in existence
forever. Now, if this was a

property that was on the market,
you would need to put it into

escrow. If it's not on market,
maybe you could just lock it up

with maybe an option to buy
whatever works for you. Now,

typically, we're putting 3%
down. I'm not telling you

anything you guys don't know
that that property. And so three

point, you know, we're talking a
significant amount of money here

we're talking, you know, over
$90,000, that is going down for

that property. And so the answer
to the question that we get a

lot is what happens if I don't
have that $90,000. The, the way

to, the only way to get around
that issue is, is one of two

scenarios. So you could either,
as you were surveying your

investors, and seeing if they
would be very interested in a

property like this, you could
elevate one of those investors

and bring them into a deal that
basically has them front the

money for the 90,000 down, in
exchange for some kind of

increased return to stay in the
project, maybe it's something

like, okay, they give you the
90,000, they put it in there,

you put a contract that makes
sure they get their money back,

if it falls through, but that's
going to count as $100,000 of

their investment, and you'll
just take that part out, or of

the of your earnings, that
additional 10, that bridges the

gap from 90 to a to 100,000. So
that would be one way to do it.

Another way would be to borrow
it. And so to find somebody who

will, who will do a loan to you,
it's gonna cost you, but it

won't cost you 90,000, it'll
cost you less, it, if it's a

property you're committed to,
and you know you're getting it

are going to be closing on that
property it's been, it's

probably worth the risk to
borrow that money for a short

period. Because you know, at
least you're getting your

brokerage fee, in addition to
that money, and so you could

use, that's the money that you
could use to basically pay that

pay that borrowed down. So you'd
get that 90,000 Back in the

deal. But you'd also get
whatever the costs are to

finance that through the deal,
you could also get it to have it

just be part of your cost of
financing in the deal as well.

So, ultimately, you get to
finally make a commitment. Now,

let's go to the side. So, you
now go down a path

I have to give myself enough
room here

where you have are doing two
things at the same time,

on one hand, you're syndicating.

On the other hand, you are

running a transaction

so because you are the buyer,
you're you know obviously in

that transaction mode, but
you're doing more than that,

right? Because you are trying to
you're syndicating it as well.

So let's go through the the
syndication steps in order that

that we first need to get done.
So the first thing we need to do

is we need to form that entity.
And so we need to form an entity

that will be the syndication,
basically the the company that

has membership units, that gets
to that your investors are

buying into in order to go in
order to become members of that

is the syndication. So most of
the time, this is going to be an

LLC. There in there are a few
exceptions, primarily if you're

doing pools, we may not do an
LLC. But if you if this is a

single property most of the
time, that's just going to be an

LLC. Now, the next part and the
next thing that you're going to

have to decide is what I
consistently call the alphabet

soup. And I think we've talked
about that here and it's

certainly in the Knowledge
Library to the alphabet soup is

that decision on how exactly
what exception to the SEC rules

you're going to come under. Now,
I'm going to go under the

assumption that for this
property, you are bringing in

some investors that you've
talked to over here in a A

survey investors, and you're
bringing some investors that

you've been building up just in
your investor, you know, on your

list that are likely to come in.
But I'm gonna guess that you're

probably going to fall short a
number of people. And hopefully

it's a small number. But it may
be more than a few number. So

which means we've got to
advertise, which means we don't

have time probably to do a reg a
offering. So because that's

going to take a minimum of six
months, probably nine months in

order to get through, we don't
have that long. So the only way

really to get around this, or,
or we could put it to a reg CF.

But then we've got the entire
issue of we're building on a

portal, and we don't really own
the investors. And then there

are costs associated with the
reg CF. So I'm going to go with

an assumption that you've
decided that this is a that it's

going to go under Reg 506 C,
which means you're going to need

accredited investors. But you
can advertise and that will play

into the rest of the things that
we are doing so that it's an

important decision because you
kind of need to know at the

outset of setting it up. Not for
the entity though, but for the

next step, which is building

your ppm.

So PPM stands for private
placement, memorandum, its

purposes, a few things, and I
should just kind of Asterix,

technically, under a 506. C, you
do not need to do a PPM, I think

that would be a really huge,
gigantic mistake. Because of all

the things a PPM gives you. So
what does a PPM give you? Well,

first, it's a platform where you
can tell the investors all the

risks that are associated with
the property. So that's

everywhere from this as a new
company. Real estate is

volatile. I mean, it's not as
volatile as Bitcoin but it's

certainly volatile. It is a that
the risks are inherent in with

the business risks of the
tenants things like that. And

there is so the there is the the
PPM video in the Knowledge

Library should be uploaded. Bye.
Bye beginning of next week. So

there this will have that all in
great detail there. But this is

just to give you an overview of
what it is. So it gives you it

it's to tell everybody, okay,
these are all the risks. It's

who the manager is,

which is you and I cannot spell

who the manager is you how you
get paid.

Which means that really what
you're doing here is you are

disclosing everything you can
possibly think of. I like to

think of the ppms job is this
first it is its purpose is for

to disclose and to make sure all
the risks are on the table. But

I think that it is would be
unfortunate to not do the

opportunity to market using your
ppm. So I would think of the PPM

more as a think of it as a
marketing tool that is suddenly

inserting these things into it
not like in tiny print, but it's

in print that is so long and
boring that probably your

investor may not necessarily go
through in as much detail and it

certainly isn't as compelling or
as interesting as these because

none of these are really
surprising, ultimately. But if

there's ever a disagreement, and
you ever get God brought up and

to say, well, they never told
me, you can be easily pull out

your PPM and point to it and
say, I told you, it's right here

in in your ppm, I gave it to you
signed you in acknowledged you

got it. So that's the role of
the PPM, so it's not mandatory

under a 506. C, except to me, it
kinda is, I would not even

consider doing one without it.
So the next thing that you're

doing

is your operating agreement.
Now, this has many, many, many

things that are in the PPM. It
has not your disclosures, but it

has how you get paid how votings
done, things like that. And in

fact, you could also look at the
PPM as the

summary

or the

plain language

version of that operating
agreement, because it really is.

And so the operating agreement,
though, is the ultimate

controlling thing. It's the
contract, it's how your company

runs. And it ultimately becomes
first it starts off as the as

the contract between the company
that doesn't really exist at

this point, but the company and
you and sets up all those rules.

So it's that it's more than the
constitution of the property, it

is the, you know, every law of
the land about how the company

works. And so you are, you start
off as the only signer to the

operating agreement. Unless,
then I'll just do another aspect

unless you did this where you
got your, your investor to put

up the down payment, he's
probably going to be a signer on

the operating agreement as well.
And then, out of the op, so you

sign. So we're just gonna put
you for right now I'm just gonna

make that assumption. And then
the last step that you need to

prepare is the subscription
agreement. So

because the operating agreement
is signed at one point in time,

so you're the only person in
existence when you're putting

this together, so you're the
only one who could sign it. What

the subscription does is it
says, Okay, I agree that I'm

going to be a part of this in
exchange for money. So, this is

what your investors will sign.

Okay, now, this, look, this
series of steps here, this is a

sprint.

Actually, I'm gonna add one more
step.

And that is your marketing
material. Because this is stuff

that will set you up to look
like a pro and help the investor

see that you know what you're
doing. And so that could be

anywhere from your brochures,
you should have your sales

funnel, which you should have,
maybe it's on your website,

which you should have all those
things that are necessary to

market it, you know, for
marketing. So this is a sprint.

You are, and this is all under
the under the core. Remember the

core company operations, rally
and exit. This all falls under

operations. Its ups, rally and
then form. So that's that

hierarchy, right. So it's the
operations underneath

operations. Or I'm sorry.

The rally is its own thing.

So it's under rally then form.
So it's a sub topic of rally. So

now we've got everything that we
need everything set up, and

we've sprinted to get this done.
I mean, you've got an escrow

that's going to take place in
very little time, you need to

get it done. And so this out of
the way

you've got an escrow that's
going to close in, say, you

know, say you were able to get
90 days, that's not a lot of

time, because the clock's
ticking, you've got to get your

one point, almost Oh, almost 1.6
million funded and in your bank

account before that day, right
now, if this all fell apart,

you're still getting your down
payment back, you just went

through a great deal of process
in order to, to get done, but so

the longer you're taking on this
sprint to the finish the sprint

to get to the form, the worse
off you're going to be. So

that's why we want to really
just get it done as quickly as

possible. I wouldn't necessarily
even wait for your getting your

entity paperwork back. I
wouldn't wait until doing it, I

would just get everything going.
Because ultimately, you're going

to need to get it done. And
actually, one thing I wanted to

mention too, is once you have
your operating agreement, you

can take that to the bank, not
in terms of actual getting money

from them. But in order to open
that bank account, because you

need a place to put that money.
And I'm gonna go with the

assumption here that you're
going to just deposit investor

money into your account versus
putting it into an escrow

account. Most of the time, it's
not been an issue with

investors. And if it is, then
you could always do it through

an escrow account if if that's
what's necessary. So you've,

you've gone through this now, at
the same time, you've got stuff

you're doing to close your
transaction to, I mean,

primarily you're working on, how
are you going to finance this,

right? So you are making your
you're getting your loans,

you're getting to loan
commitment, you're doing what

you need to do on that on that
piece. And that still actually

has an interplay between the PPM
and the finance and those loan

Docs. So it's going to change
how things work, it's going to

change what the loan terms are.
So there are things that are

going to be changing back and
forth, as you're committing now.

And that's okay, that your PPM
changes. So let's say it takes

you 10 days to finish a PPM from
the start of the process. It's

okay that on day 15, suddenly,
the balls shifted and you need a

different amount of money or you
need a different thing. You

basically can reversion out your
ppm, anybody who's received the

PPM before before you accept a
subscription agreement, you

would give them a new updated
ppm or a summary of this is

what's changed in the PPM since
we've done. So it's actually not

a problem that the PPM changes,
your operating agreement

probably isn't going to change.
But your subscription agreement,

I mean, but your ppm, it will
probably change through this

process. So you're doing
everything you need to do in

order to get your loan. You're
also doing all of your due

diligence. And I would include
in maybe in my marketing

material, certainly all the good
news, I would include in my

marketing material I've
uncovered through due diligence.

And I probably would put
anything that was surprising or

bad, I probably would put in an
appendix in the in the operating

agreement, so you're making all
these disclosures. I'm sorry,

not the not the operating
agreement. In the PPM, so that

way, you've been making
disclosures, you don't want this

deal to go down at the end of
the day and then say, well, you

knew that this had dry cleaner
on it before and there was

possibly a risk of, of
environmental and you didn't

tell me you don't want that. So
you want Gonna be communicating

and the good news, make it real
front and centered. The not so

good news disclose it, but you
don't have to broadcast it like

it's the greatest thing since
sliced bread. So we've got, now

we've got the so this, this
sprint to the the sprint that's

been taking place here is now
done. The next thing we are

doing is what we talked about
last week. And that is our

investor, target lock. Now I
have something to give the

investors who have invested
money with me, right? So now I

have all these things. So when
they say, okay, great, I'm

interested, I'd like to sign up,
I've now suddenly told them,

I've got, you know, okay, here's
my ppm, here's my operating

agreement, here's a subscription
agreement when you're ready, and

Oh, and here's all my marketing
collateral as well. So that way,

you're looking like you are
ready to do this deal. Now,

you're going to get to different
kinds of people that are part of

the investor target law. You are
going to get people from your

list from the people that you've
already identified who you want.

And then you're going to get the
people who you just don't know

yet. That is why you did a 506
C. So that you could get those

people that you don't know yet,
even if they don't join with

you, you are going to add them
to your list. Because they may

still invest in the future. Now
under our investor target lock.

What we're trying to do is get a
yes. I want to invest. So we

start first with our communicate
our message, you've got to get

their attention. And that could
be setting up a meeting, it

could be somebody symbols that
doing a phone call, whatever,

we've got to get them a message.
You could also send a broadcast

email, it's just probably not
going to actually get read very

quickly. But you could, I would
follow it up with phone calls,

whatever you got to do, you've
got to communicate that message.

Next, you've got to capture
their permission to talk about

it in detail. Because if they're
not open to hear it, you're not

you're wasting your time. So
capture that permission set a

meeting, get a time to actually
talk with them. Most of the

time, you're going to do one on
one meetings in order to talk

about the deal, make them feel
appreciated, make them

understand what the deal is.
Answer any questions. Can we

create Kari asked, Can we create
an entity beforehand? Sorry, you

probably asked that earlier.
Yes, you absolutely can create a

entity beforehand. So if you
think your entity so if you're

ready to, if you want to just
MIT set up this entity,

absolutely, you can do it, it
would just it because most of

the time, the the entity can be
whatever, you may not know the

name that ultimately you would
ideally pick for it. Because for

those entities, we tend to use
either the address or the name

of the property, but it doesn't
really matter. You could choose

like your, whatever the name of
your company is, and you could

put investment one. So it could
be you know, XYZ investments in

XYZ properties investment one,
fund one would be a totally

valid entity name. And that way,
you're just marking it out. So

just from a marketing point,
it's kinda nice when you know

the name, but you can form that
immediately so you can get

started faster. So after
captcha, convict permission, we

need to convert the mindset and
that's making a case of why this

property is the best property
for them to go into. And

ultimately, we are looking to
get Yes, that's that's the goal.

So you've gone through now
you've talked to all your

investors, you've got a bunch of
people who are starting to say

yes, the next step for each
investor is a three step process

that we refer to as the latch.
And there, the first step is to

accredit. This takes a couple of
days, because you're coming in

as a 506. C, they need to be
accredited investors, they need

to be investors that either have
the million dollars of net worth

over. But so aside from their
family residence, or that have

$200,000 in income, if they're
just counting themselves 300,000

for them, but somebody needs to
accredit them and give a third

party certificate. So we use
early IQ, I'll put the link to

them in a in one of the lists,
you can use them, you can use

whoever you want in order to get
that accreditation, but it

should be a third party that
really does this accreditation

that issues a certificate,
because that certificate is what

you're going to hold on to to
say that you did your job. After

we accredit, we accept that
money. And so that's giving

wiring instructions and making
sure that it goes in I would

probably always recommend you
use wire have rather than check

checks do have a greater
potential for fraud than wire

instructions than wiring. Even
though there is a lot of news

about wire fraud, there's there
is a lot of rights that are

given to people who have checks
and fraudulent checks do exist

and can basically put you in a
really bad spot. So I would say

wire is the best way. And
there's a very nice audit trail

and you're never touching the
money, which is great. Until

it's in your bank, then you have
we have a test. And this is the

circling back to the investor
and let them know Okay, here is

right where we're at. So

so this is communicate.
position.

So they have X number of dollars
received. We are closing on such

and such date. And we'll keep
you informed of anything that

goes on. And the purpose of here
is, it's not required, but it

would be a big mistake not to do
it. Because you're you've got

somebody here who's probably
given you at least $50,000. And

they probably are little bit
shaky about having done that.

And you don't want that
shakiness to go forward in time,

that for them always to have
that if you communicate right

away and make it clear that you
know you've got their money it's

received, everything's looks
good from your end there,

they're going to be happy in
their mind, they're going to be

putting put to rest. So as you
build up your bank account, I

mean, ultimately, probably looks
fairly faint right now.

Ultimately, you've got a big
pool of money. Your quote

winding down, you transfer this
money into escrow, for those of

you in non escrow states for
where lawyers do transactions,

for us all escrow tape, or for
most for maybe more than half of

the states. Most as what we do
through Escrow is we put all of

our money into a third party who
holds that for us and they close

the transaction, whereas in a
non escrow state, oftentimes

you'll lodge that with a lawyer
and there's an actual formal

thing that takes place over a
table in order to complete a

transaction. So when I say
escrow, I'm being very general

in terms of, we just put it into
this transaction into this

bucket until it's ready to be
distributed. And so we'll even

draw a little bucket there. And
then finally, you get to the

close. You've closed the
transaction, and you communicate

that to your investors. This is
So this is kind of the point we

got, we went from small to big.
So we started up here. With a

few properties that we
identified, we sorted them out

in using our fed and by
underwriting and then ultimately

surveying our investors to
finally find which one we're

going to choose. Once we commit,
at that point, we're really up

against the clock. And so
that's, that's where your heart

starts beating a little bit
more, because you want to get

this deal done. But you also
don't want to lose your money or

invest your money. So we've got
the two paths going on, you've

got the syndicating path where
we're sprinting at first, to get

everything in place. So that
way, then all we really have to

focus on on the syndication
side, is getting the investors

lined up through the investor
target lock. And then, of

course, we're just too close
working through at the same time

to close the transaction. On the
other side, you're always

probably going to be trying to
get as much time as possible,

because you would much rather
you be in the driver's seat in

order than the then the seller
in the driver's seat in order to

get there. But ultimately, you
raise the money, you get the

money all into the bucket, and
you close the property. Now,

there's probably questions from
that. And I know we went really

quickly through a lot of these
things. So any questions?

Okay, any questions yet? No, the
lot to digest.

So it's very overwhelming. I
don't know what to ask about, I

will need to review everything
again, I guess.

Yeah. And that's why I wanted to
do it this way. Because I wanted

to show I didn't want to get us
to get into a position where the

where the forest was being lost
through the trees I wanted it to

be. So you have an idea of of
all of the steps that take

place. And then as we go through
each module becomes a little bit

more makes a little bit more
sense as to how it all fits in.

That was really the purpose for
I think we did that here. And

then next time, what we're going
to do is sort of twofold. It's

going to be more about money
than anything else. So I want to

do first I want to go a deep
dive into just how we do

underwriting to see if this is a
deal. That's going to make

sense. And then also how much
are we going to make because

we're doing this to make money?
And then the second half of that

would be to go through exactly
how that works. Now that we've

underwrite it written it, how do
we do the transaction after it's

closed? How do we run the
property, so manage the asset

from from the point of closing
to deciding when it's time to

sell, and how the money works
along the way for you and

ultimately, for your investors?
And so there's that has its own

things that take place at the
same time. Does that make sense?

Yeah, that's perfect.

Are there any other questions?
Did you find this useful? So it

was I say it wasn't say helpful
exercise?

Yes, very much. I wasn't aware
of everything that is in the

back of all of these activities,
planning and all the points that

need to be touched. It's, it's a
lot. Good.

Great. Great. Thank you.
Christian, Carrie, what do you

think?

I think you're great.

I know. Great work. Thank you.

Carrie, Was this helpful?

Yeah, we had a problem. Getting
unmuted there. Yes. Very

helpful. I guess, for me, just
not clear about all the steps on

commercial real estate, that
transaction. So maybe later on

Yeah, we could maybe go into
that a little more.

Absolutely. Yeah, it's very
similar. But there's Yeah, we

can easily outline all of all of
what that is. That make sure

that that is quite

right. And just I guess how to
lock it in and the time and

money and all that so but this
was very good. Thank you to

them.

Excellent, I appreciate it. All
right. Well, thank you all. I

think we had a great session
today and next week, like I

said, we're gonna go through the
second part of the deal be

constructed. So that way we can
see just how the money works for

us and for our investors.