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Circle of Competence Issue #58

QUOTE OF THE WEEK

"Many people have a wrong idea of what constitutes true happiness. It is not attained through self-gratification but through fidelity to a worthy purpose." - Hellen Keller

FOOD FOR THOUGHT

This week, I wanted to share two books that I have been reading on commercial real estate investing. Going forward, I am going to tone down the weekly commentary sections to allow myself time to write longer, more in depth posts that I will post to my Thoughts page.

Raising Private Capital by Matt Faircloth, founder of the DeRosa Group.

This book is a great introduction to the apartment syndication business model. Matt Faircloth is an experienced deal syndicator and teaches the moderately experienced real estate investor how to properly go about building an investment/fund management business focused on acquiring apartment complexes using other people's money (OPM). While this is a solid introductory book for those looking to start an asset management and syndication business, I would say it is the start of an educational journey, not the end. It hits the high points of finding investors, the ins and outs of accessing available capital (self directed IRAs, cash, equity in property, etc.), and structuring private loans and equity syndications.

Crushing It in Apartment and Commercial Real Estate: How Small Investors Can Make It Big by Brian H. Murray, founder of Washington Street Properties.

Brian Murray's book, in contrast to Faircloth's, focuses on building your commercial real estate business from start to finish without taking outside capital (besides bank financing). He gives you the bare knuckled truth about what it takes to bootstrap a commercial real estate firm from a dead stand still. I enjoyed the story of the Solar Building that he weaves throughout the book - a great story of turning around an absolute dump of a property with good bones into a wonderful apartment community through sheer determination and grit. He offers some great resources in the appendix on various considerations for different types of commercial properties from self storage and retail to office and multifamily. This book ranks up there for me in the commercial real estate category.

Finally, it wouldn't be fit for me to pass by Easter without sharing one of my favorite pieces of writing ever penned by a Christian thinker, C.S. Lewis, titled 'The Weight