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RG 045 – The Benefits of Being a Passive Investor in a Syndication with Jeremy Roll

The Benefits of Being a Passive Investor in a Syndication with Jeremy Roll

About JeremyReed Goossens Jeremy Roll

  • Jeremy is the president of Roll Investment Group
  • He manages 1000 investors in the US and Canada
  • Jeremy worked in the corporate world until 2007
  • Jeremy is originally from Montreal, Canada.

Nuts & Bolts

Jeremy has been investing in real estate since 2002 but left his corporate job in 2007 to pursue this venture full time. Jeremy is currently investing in over 50 opportunities and is the co-founder of FIBI (For Investor By Investor) which is a non-profit started in 2007 for networking, helping and learning among the real estate community in South California. After being disturbed by the volatility of stock market during the 2008 crash Jeremy decided to look for a cash flow source that was more conservative and resistant to fluctuations and so he found passive investing.

Why passive investment?

Jeremy explains that before you become and investor you need to understand your personality and think about which type of investing will make you most comfortable; direct or passive. A passive investor has to be happy to trade control for diversification, however this also means reduced risk and increased predictability. A passive investor can put small amounts of money in several types of asset classes, geography and operators. By doing this Jeremy can choose to put his money behind people who are more experienced than him. Jeremy did well in the financial downturn by diversifying his investments; for example he invested in 6 mobile home parks that only suffered a 1% reduction in occupancy, and by investing in self-storage he made money when people had to put their belongings into storage after foreclosing on their homes.

How do you analyze an asset?

When investing in real estate Jeremy recommends that you pick a diverse class, for example in non-A class buildings you’re more likely to have a wide diversification of tenants which will reduce risk. To be even safer Jeremy advises sticking with residential real estate because people can work anywhere, but they’ll always need a roof over their heads. When comparing asset classes, the easiest method is to look at projected income vs projected expenses, which equals cash flow. This formula can be extended out for each asset you’re looking to invest in. However, it’s important to learn the nuances of each class, for example rental strip malls have leases that turn over more quickly, and with mobile home parks you should only own the land.

Who should you work with?

It’s important to keep in mind whom you’re taking a bet on because these people will need to be able to mitigate problems that arise. When choosing property managers always do a background check and asses if they are aggressive and chasing a fee or if they are also conservative and looking to create a long-term relationship. When choosing investors to work with make sure you read the entire offering document carefully to see if someone is cautious with money. You should also always meet them in person and walk the property together to see if you get a gut feeling. It’s important to ask the right questions, for example ask about the annual assumed expense increase and an assumed vacancy rate, and look out for people making the deal look better than it really is.

Top 5 Investing Tips:

  • Most successful habit – Keeping a tight schedule to optimize efficiency and reading for 1-2 hours each day about economics
  • Most influential tool in your RE business – His Windows Outlook desktop app to keep organized and Schedule Once to book meetings.
  • Most exciting project right now – Investing in oil from existing wells,.
  • Who is your most influential person – His grandfather who taught him to be conservative and not spend too much on expensive assets.
  • Best US deal to date – Getting cashflow at 38% return from cash machine investments.

Useful Links –

  • calculatedriskblog.com
  • zero hedge.com
  • schedulonce.com

Contact – jroll@rollinvestments.com