Side Hustle LP
@SideHustle_LP
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Following
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Statuses
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tl;dr: 98% of investors are better off buying index funds
Joined February 2011
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Pinned Tweet
Even as a child, I knew my father wasn't great with money.
He spent it on beer and cigarettes. He was a gambler. And I'm pretty sure he refinanced our house without my mom's knowledge.
My parents divorced when I was a teenager, no small part due to money issues.
So naturally,
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Your eldest child is 13. She's a good kid.
Has been going to sleepaway camps since she was 10. You trust her implicity.
Her best friend's family invites her to spend a full week in Hawaii this Thanksgiving. It will just be the grandparents, bestie, and her.
Do you let her go?
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Allow me to re-introduce myself.
By day, I manage $3B+ in equities for a major financial institution. By night, I invest for my own account, most often as a Limited Partner in real estate opportunities.
I made my first LP investment in 2012 for $28,530. Four years later, that
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This is Flash Shelton, the Squatter Hunter.
For hire, he takes an unorthodox approach to evicting squatters illegally occupying homes.
His favorite tactic starts with getting the legal homeowner to draw up a lease making him an official tenant.
Then he moves his belongings
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@kenzianidiot
My wife is now setting a talking agenda for the next time she goes out with the girls.
Apparently there are a lot of topics to cover.
Thanks for the inspiration! 🙏
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Just got off the phone with an impressive young GP.
His goal is to buy assets with a heavy value-add slant, refi and hold forever.
But the traditional LP/GP model of 70/30 over an 8% pref incentivizes selling in years 2-5, as opposed to buy-and-hold.
Experienced GP's, is there
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@bobbyfijan
Our concerns exactly, Bobby!
Not worried about her. Worried about everyone else and not being around in case we’re needed.
If the bestie’s parents were there, we’d let her go. Still 50/50.
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Just spoke to a GC buddy of mine.
Has a client who owns a home that rents for $25K per month. Tenant owns a Bentley and a G-Wagon.
Refuses to pay rent and won't move out. Court date set for 6 months from now. Can't do anything in the meantime.
Isn't being a landlord fun?
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LP's, have you ever invested in a deal with a GP from Twitter/X?
I'll go first.
I've invested with 8 different GP's from Twitter since early 2021. I followed them here for months before reaching out via DM/phone and met with 7 of the 8 in person
@REconveneLA
before investing.
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@girdley
In group business meetings, everyone has a laptop or their phone out
Direct eye contact not even a requisite anymore
Not all progress is progress
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@realEstateTrent
Less than a 4% acceptance rate.
Which means 1 out of 25 get admitted.
And that's for people who should generally qualify academically.
Easily $300-500K per seat.
Rich parents would come out of the woodwork to buy their unmotivated kids "credibility".
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Today is my 45th birthday.
Instead of writing a cool list of things life lessons, allow me to share the story of what I'm most proud of in 2023. Non-business/real estate material ahead.
HOW MY 12 YEAR OLD EARNED $1240 IN 3 WEEKS TO BUY HER OWN SMARTPHONE
Earlier this spring,
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If I had to allocate $1M to ReTwit GPs today, here's my HYPOTHETICAL diversified portfolio.
Not investment advice
25% to
@realEstateTrent
- neighborhood retail
15% to
@fortworthchris
- industrial, incl mezz debt
15% to
@SievaKozinsky
- SMB/HoldCo exposure
10% to
@DallasAptGP
-
You've been gifted $1,000,000 on the condition it has to be invested with anyone from RETwit or SMBX.
Who ya got?
Can't choose yourself. Maximum of 8 GP's.
Bonus points if you allocate percentages.
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A couple years ago, like everyone else here, I invested in an HVAC/plumbing company.
Deal closed for $30M at a 6x EBITDA valuation.
Base case projections for 2024 were adjusted EBITDA of $6M and FCF of $5.2M.
Goal was to sell at 7x EBITDA down the line.
The pitch seemed
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I'm convinced 80% of you won't ever fully "retire" even if money were no longer an issue, myself included
You'd get too bored
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@ShaanVP
Arranged piano lessons for my mom, who has never had formal training
Teacher just shows up same time every week
My mom, who is anxious about spending money, doesn't even know how much it costs
Taking over her medical and financial situations was a bigger task
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@sweatystartup
My kids save their candy and eat it over the next 12 months. One per night if they earn it.
We still have some from last year that we’ll throw out tonight.
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@sidecarcap
My shop was top 5-6 holder of Clayton Homes at the time
We knew we got robbed
Had no power to fight back
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I've invested with 8 GP's that I've met through X
How many were through inbound communication or cold emails?
ZERO
Just my two cents, but if you're looking to grow as a GP on socials, share your knowledge & expertise
Do it well for long enough and your audience will find YOU
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@foodiedhillon
@LasVegasLocally
Always cab out of the Vegas airport. That line is always moving 🚕
The extra $3 is worth avoiding this hassle
It’s just a 15-min ride
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One small downside of RE cost segregation studies:
Invested as an LP in an apartment deal two years ago. Performed a cost seg analysis. Deal went sideways and now exiting at essentially our cost basis.
Will have a tax liability this year due to depreciation recapture, though we
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GP Appreciation Moment 🎉
So many things have to go right in order for an attractive deal to cross an LP's desk.
Assuming it's a deal-by-deal structure,
a GP has to:
🔹find an incredible opportunity that pencils
🔹complete due diligence
🔹fund all the upfront costs
🔹do all
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Thanks ReTwit for a fun and engaging afternoon 🍻
This was less than half the crowd so next time someone please remind me to take a photo sooner!
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Yesterday I learned
@mu2myoc
actually carries a rubber mallet 🤣
Easily the most entertaining conversation I’ve enjoyed all year
@ReconveneLA
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How Simple Waterfalls for Single-Asset SPV's Work (for Dummies)
Let me preface this but saying I am not a lawyer, but rather a lowly LP for whom simple waterfalls are intended.
For the expert version, pls refer to the epic thread called How Investment Fund Carried Interest
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Had lunch with one of the largest owners of Single Family Rentals in the country
They are exiting California
The company was founded in CA
The chief executives were born and raised in CA
The weather is better but the money isn’t
California is not a business-friendly state
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Word association for 101 ReTwit members in 4 words or less:
Let's do this!
@moseskagan
- unlevered yield on cost
@sweatystartup
- stiff drink threads
@stripmallguy
- dry cleaners & HOA's bad
@fortworthchris
- RE's best podcast host
@mhprvpmvp
- anal bleaching, of course
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Fun times. Two capital calls due this week.
Neither GP is on Twitter/X.
One is to buy an additional two years of term on our loan for a value-add multifamily project in Los Angeles. The property was purchased in Dec 2017 and was derailed by the pandemic. Never found its
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Can't believe I just hit 2,000 followers!
Thank you all, this has been so much fun.
Some new followers here, so let me re-introduce myself.
Personal
I'm 45, married and have two amazing daughters.
One is five years away from college. I am painfully aware of how little I might
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Dusting off my dormant account in advance of
@ReconveneLA
Looking forward to seeing some similar faces and meeting new ones!
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Would you give money to this private equity manager?
Since 2004, they've exited 12 investments and returned 7.0x net MOIC to investors. The average holding period was 5.4 years.
In other words, if you invested $100,000 in each deal, they'd return to you an average of $700,000
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The very best GP's are extremely disciplined with their underwriting and will wait patiently for the right deal.
It's not uncommon for some to go an entire year or two without buying an asset.
The big money in RE is made on the purchase.
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There are dozens of factors to consider when investing in a real estate deal as an equity LP.
Here are some of first things I look for when evaluating a potential deal:
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I began my professional career at a boutique hedge fund during the dotcom era. I was just getting introduced to the stock market and I soaked it all in – internet stocks, small caps, options, even leverage.
CNBC was on every TV. Everybody had a hot stock tip. It was a wild time.
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Time to run it back!
Save the date for Los Angeles RETwit meetup Part 2
Friday May 17th from 1-4pm in Culver City 🍻
40+ strong last time, comment or DM me if interested!
Moses, if you can attend, we'll move it to K-Town
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The best GP's are usually more constrained by opportunity than by capital.
Capital always flows to where it is treated best.
With a strong track record, the limiting factor will be deal flow.
Create real alpha and you'll have more capital than you'll know what to do with.
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@ramit
12+ years of LP investing with a 20+ year career in finance
Invested in over 100 private deals incl real estate, credit, SMB, venture, you name it
Can confirm that simply investing in S&P index funds outperforms 98-99% of alternatives, incl whatever rich people have access to
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Just finished an introductory call with a prospective GP
Worst one I've had in a long time
I finally stumbled upon a syndicator that targets well-heeled doctors and lawyers
Offenses?
🚩 LOW ENERGY - sounded half asleep, no enthusiasm
🚩 inexperienced - got into the space
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Thanks everyone for making it out today!
Incredible turnout at 40+
Had a fantastic time. Hope you met some cool people and enjoyed it as well.
Let me know in the comments if you want to run it back in late May.
@EllliotttB
@CohenSite
@HealthcareREguy
@TAYVAY_
@atnissly
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@nikitabier
Service in the US feels downright barbaric compared to Asian countries, especially Japan and Thailand
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GP friend owns a troubled asset in Los Angeles.
They finally missed a payment on the loan and got assigned to a special servicer.
Said they should have been it a long time ago.
According to him, the servicers are overworked. Let's say they're handling 20 cases when they should
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Spent some time last week with some successful GP's.
One of my takeaways was that the better their track record and the more scalable their business, the more likely family offices and institutions have found them as well.
So even if you've been a loyal and regular investor
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The typical private real estate deal just doesn't look all that appetizing right now given the cost of debt, the probability of higher rates for longer, and 5% T-bills
Spending time looking at angel/startup investments, cash-flowing SMB, even credit
Anyone have good ideas?
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@realEstateTrent
Economically it's the right decision.
But there's an argument for standing your ground on principle as well!
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@mhp_guy
This was the inspiration for my 12-yo daughter’s summer job!
Made $1300 and was able to buy herself her very first phone!
Thanks, Chris 🙏
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If you haven’t made any new friends off this bird app, you’re doing it wrong
Real connections are the absolute best part of this platform
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Our insurance premium on a multifamily asset in Los Angeles just went up 42% due to fire hazard
But the property is south of Sunset and the hills
Where is the fire risk coming from?
Homeless encampments 🤦♂️
Texas and Florida starting to look a lot more interesting these days
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In exclusive neighborhoods where land is ultra-expensive, nearly every speculative new construction single-family home has a sizable basement.
Why?
It's the only way for luxury developers to make the numbers work in areas where building is heavily regulated.
Consider this new
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As an LP, I've endured my fair share of investment losses over the past decade.
In hindsight, here are the top 5 reasons why these investments failed 🧵
1️⃣ Usage of short-term debt
One of the most common reasons for failure in real estate deals is over-leverage. Thankfully,
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Note to LP's:
If you are ever interested in a deal but the minimum check size is too high for you, ask the GP if they'll accept less
This won't work if the minimum is $5K
But it may if the ask is $100K or $250K and you can only put up ~half the amount
Doesn't hurt to ask
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What: West LA ReTwit & SMB meetup
When: Friday, May 17th from 1-4pm
Where: Culver City (same location)
Who: you and many others!
How: reply in comments or DM me
Open to anyone who wants to talk shop (or not) and get to know awesome people IRL!
Invite or tag anyone else I missed
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Reflecting on 100+ deals as an LP 📈📉📈, here are key lessons I've learned:
· Cycle-tested GP's model conservatively for good reason
· In declining rate environments, value-add real estate deals shine (duh)
· If given a chance to invest in a Ryan Reynolds-led company, do it
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Fundraising for RE syndications has done a complete 180 over the past 2+ years
Not long ago if you didn't respond with an indication within 24 hrs, the deal was oversubscribed
Today?
Lots of bubbly emails "just checking in" and reminders of the "small amount" left in the raise
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Just spoke to a GP friend of mine.
In the past, all his offerings were oversubscribed. I would get cut back often.
He showed me a deal two weeks ago, the IOS one I wrote about yesterday. Today he tells me there's some room left in the deal.
The dry powder is drying up, folks.
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Legacy Park in Mesa, AZ, is the largest sports and entertainment facility in North America.
In its first year, 1M unique users made 4.3M visits to the venue. Nearly 20,000 teams and 600,000 athletes participated in on-site tournaments.
Legacy Park boasts the following over 320
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ReTwit and SMBTwit:
If you're looking for a sharp, hardworking, and humble young man eager to start his career, send me a DM.
Brandon is graduating from a top-tier state university with a pre-med degree. Just 3 months ago, he realized medicine wasn't his path.
He's open-minded
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Looking forward to our informal ReTwit/SMBTwit meetup tomorrow in Culver City, Los Angeles starting at 1pm.
DM me if you'd like to join and haven't already signed up.
Getting the name tags ready!
@EllliotttB
@CohenSite
@HealthcareREguy
@TAYVAY_
@atnissly
@CREHiddenAlpha
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Just 3 days away!
· West LA ReTwit & SMB meetup
· Friday, May 17th from 1-4pm
· Culver City, Los Angeles (DM for location)
· come and go as you please, totally casual
RSVP in comments if you haven't already, open to all!
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Congrats and thanks if you've gotten this far. Just wanted to post something light-hearted to appreciate a community that has been meaningful to me for several years now.
There are hundreds more that I didn't have room for so please feel free to share and add to the list!
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Michael Jordan. Magic Johnson. LeBron James. Ulysses Bridgeman. Who?!? 😲
You read that right.
Ulysses "Junior" Bridgeman may not be a household name, but the former NBA player's business acumen has made him richer than most of the biggest legends of the game.
Drafted by the
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Halfway through my junior year, I decided it was time to get a real internship. I found an posting for a position at a "hedge fund". At the time, neither I or anyone I knew had ever heard of these so-called "hedge funds".
But it paid a whopping $12 per hour, so I applied.
I got
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Just got my first RE syndication offer of 2024
Secondary market Class B industrial
🏭 First building
100% leased, 16-mo WALT
6.2% going in cap-rate
stabilized 9.2% UYOC
6-year 4.5% term loan
52% LTC, 2.0x DSCR
$125 psf basis before $15 capex
$165 replacement cost
4% escalators
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GP’s, how do you find new investors?
I assume it’s from direct contact, word of mouth from existing investors, or maybe through X
You’d think there would be a more streamlined method these days
Seems like the model relies on too much on luck and hoping that someone finds you
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Incredible how much free golf at quality courses I've turned down from salespeople and analysts over the years ⛳️
Bandon, Pebble, Riviera, LACC, you name it
Just not my thing
But I'd be there if you invited me to a pickup basketball game 🏀
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@mhp_guy
He needs a side hustle.
Should do something he enjoys in the meantime while keeping his W2.
Gives him optionality as well.
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You know how before there was online dating, there was just ... real life dating?
You'd meet someone at school, at a bar, or through friends?
That's how it was for me and GP's before Twitter.
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@mhp_guy
Close friend of mine got their small business profiled in a small town newspaper over a decade ago.
That led to articles in bigger newspapers, then “Best of” awards in magazines and eventually TV interviews.
To this day they still get press coverage.
All because of that first
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LP’s, how do you find GP’s?
Family and friends, word of mouth and referrals. What else?
Please don’t say IG or TT 😅
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GP's, if a potential LP is passing on your deal, do you want to hear why?
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Several of you have asked what I as an LP look for in a GP. There are obviously many factors, but the most important ones are simply this:
TRUST and COMMUNICATION
Investing in a private vehicle where your money is generally unaccessible for 2-10+ years (or forever) is like
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Been spending some time with family lately and my big takeaway is this:
Habits compound over time
One can be youthful in their 80's or old in their 60's
Reminder to self to keep my mind, body, and relationships healthy
It will be worth it
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@drgurner
One with stability allows the other to take risks.
Then return the favor.
Teamwork at its finest!
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@thesamparr
You should interview people in the $5-20M net worth range (roughly top 1% range)
Absolutely amazing to hear about people in the top 0.01% but the former is more relatable to, and achievable for, most of your audience
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Bought my first Bitcoin in '17
Went thru the whole mania in '20-'21
A friend helped found a crypto fund in '22. Had low expectations but invested anyway to support him.
Fund is up 3x today. Returning half of initial investment soon, remaining half by YE.
No one knows anything
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Anyone interested in a casual ReTwit/SMBTwit meetup in Los Angeles on Friday 2/23 @ 1pm?
Thinking Culver City might be accessible to many, though open to alternatives
DM me and we'll see if there's interest
Feel free to repost for reach
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@mhp_guy
Dude, you're the best
No average person would take the time to write such a detailed email like that. You delivered the message in a thoughtful manner so as not to hurt, but help
Feedback is a gift and you just gave him Christmas
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Had several convos with friends whose kids are applying or just applied for college
Noticing a material uptick in demand for big state schools with good sports programs
UM, UT, GA, ASU, CU, and so on
Basically a push towards the most fun college experience
Start of a trend?
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I invested $50,000 into an office sale-leaseback deal in a major downtown metro back in 2018. Next week, I'll be getting $52,417 back.
I've never been so pleased with a 1.0% IRR.
Here's the story. 👇
In 2018, the sponsor acquired a fully-occupied 250K SF office building and a
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Enjoyed a long conversation w/ LP Investor today
The man knows his stuff
If you're interested in private investing, highly recommend a follow!
@scottyo21
Where do we start....
- State level K1s & filing requirements
- Tax planning in general - very hard to plan around tax events within a fund that you have zero control & limited insights into.
- Most PE managers are tax insensitive & focus on pre-tax IRR performance which is a
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Shout out to
@Jb2Investments
for being the first X GP I'm aware of to get out 2023 K1's
Feb 17th, very impressive! 👏👏
If you know of GP's that have gotten theirs out as well, please post here for kudos!
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Many high-end, chef-driven restaurants are only open for dinner these days
The rise of WFH, minimum wage increases, and inflation have made operating lunch service financially untenable
Tougher than ever to be a restaurant owner
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Hat tip to
@realEstateTrent
and his team for issuing 2023 K-1’s on February 28th.
Doubly impressive given it’s a for a fund and not just a single asset.
Well done!
If you’re a GP and have done the same, raise your hand!
Same for any LP’s that want to credit their GP’s.
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@sweatystartup
If they have any type of sweet during the day, they forfeit their treat at night. Provided they earned it.
My older daughter doesn’t eat cake anymore unless it’s chocolate. She doesn’t want to waste her sugar allowance.
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If you're like me and lamenting the final integration of First Republic Bank into Chase later this month, check out American Business Bank.
A close RE GP friend has been migrating all their business accounts over to them over the past few months.
Early indications is that their
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There is no downside to having a Home Equity Line of Credit
Change my mind
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@moseskagan
You sure you don’t want to run for local office, Moses?
Big fan of common sense policies. I’d vote for this.
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Close friend's father developed a 56K industrial building in the San Fernando valley in the late 1970's for $14 psf all-in, or $800K
Just appraised north of $15M or $256 psf
Throwing off NOI of $650K per year
Hard to lose in real estate if you hold the right assets long enough
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