How to invest in ground-up development with Shannon Robnett

Idaho is going through a growth spurt, making ground-up deals attractive investments, but before you think that these deals are too risky, speak to Shannon Robnett! Better yet, listen to this interview because today on the show he joins us to talk about doing what he does best, construction syndication in his backyard of Southwest Idaho. Coming from a real estate family, Shannon has over 40 years of experience in the field, having learned about things like 1031 exchanges around the dinner table! Since then, Shannon has been personally involved in over $200 million in real estate transactions covering multifamily, office, professional, industrial storage, and everything in between. We kick things off with Shannon hearing a little bit about his childhood and how he started applying the lessons his parents taught him to his own career. He gives us the lowdown about some of his first deals and how he got into syndicating for new builds rather than renovations. The deal structure for limited partners who invest with Shannon is very different from what you might expect on a value-add long term hold, and Shannon does a great job of diving into the weeds and explaining what his investors can expect. He also spends some time breaking down a few of the common misconceptions about ground-up being a more risky investment than a value-add. For all this and some great recommendations for key texts, life habits, and more on the topic of syndicating for construction, be sure to tune in today!Key Points From This Episode:Shannon’s lifelong real estate education having grown up with parents in the industry.The first deal Shannon did; a flip that taught him the value of being a middleman.How Shannon built a community and witnessed the power of leverage through syndication.Ground-up versus value-add, and the work Shannon does syndicating in the ground-up space.The investment structure of the short term construction syndications Shannon does.Risk profiles between value-add and ground-up and how the second is less risky.The types of investors Shannon looks for and how his deals help them achieve their goals.Why Shannon only does ground-up deals in his backyard, the southwest portion of Idaho.The suitability of the market in Idaho for ground-up deals, especially since COVID.Loan interest structures for construction; more on why ground-up is less risky than people think.How more experienced investors will always opt for deals with risk-adjusted returns.The business models of bigger players that Shannon looks to as examples.A deeper dive into how Shannon structures deals and tax for his investors.One question Shannon advises investors ask before becoming an LP of his.A book recommendation from Shannon, and the one thing he is most proud of.Why tenacity is the number one key to success in Shannon’s opinion.Links Mentioned in Today’s Episode:Kent RitterShannon RobnettMy Vertical EquityRich Dad Poor DadWalker & DunlopKennedy WilsonNever Split the DifferenceCheck us out on socials: InstagramLinkedInYoutubehttps://hudsoninvesting.com/Production by Outlier Audio