42. Syndication Fund Investing with Nathan Clayberg

Nathan Clayberg is an Assistant Vice President at MLG Capital. MLG Capital is a private real estate firm that has been in the industry for over 30 years with over 22,000 multifamily units under management. In this episode, Nathan discusses how state taxes impact fund investing, the importance of choosing the right sponsor and what asset classes he favors right now. Nathan talks about why he favors the fund approach rather than a single asset syndication. One of the main advantages he sees with funds is diversification – both in different properties and in different markets. Nathan discusses when investing in a fund, taxes might need to be paid by the investor in each state where the properties in the fund are located. He describes how MLG has a unique way to invest for those with retirement funds or for those who want to avoid the state tax issue – they have a dividend fund that uses a non-traded REIT which reclassifies the income as dividend income.  Investors may forgo some depreciation benefit, but they won’t have to file state income tax returns. Nathan talks about the timing of investment in a fund – the benefit of investing early is a higher multiple because you are receiving dividends longer, but later investors have a higher IRR because your capital is returned more quickly. Nathan mentions the asset classes MLG prefers in their fund – mostly multifamily with some industrial. They will look at office and retail but only if the deal has a very compelling story. Nathan talks about importance of sponsor screening and why it’s important to receive regular and comprehensive reports from sponsors.  He also mentions the importance of location and comparable rents in the market when evaluating the proforma from the sponsor.    Podcasts he recommends: The Real Estate CPA    To connect with Nathan, you can email him at [email protected] or click this link.   If you would like to contact Jim Pfeifer, you can email him at [email protected] or if you would like to find out more about Left Field Investors go to www.leftfieldinvestors.com.    Our sponsor, Tribevest provides the easiest way to form, fund, and manage your Investor Tribe with people you know like, and trust.  Tribevest is the Investor Tribe management platform of choice for Jim Pfeifer and the Left Field Investors’ Community.    Tribevest is a strategic partner and sponsor of Passive Investing from Left Field.