SCF 11 | Commercial Real Estate Syndication

 

Commercial real estate syndication is hotter than ever before. Want to know how can you fractionally own a shopping mall? In this episode, host Dale Corpus is joined by Ben Kogut Partner at HHJ Investments and Managing Partner at Kogut Commercial Real Estate to discuss how you can do that and the pros of investing in commercial real estate syndication. Ben also educates on the importance of timing, investor relations, and cash flow to help you get the right deals. Tune in for more real estate and financial management advice right here on The School of Cash Flow.

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Why Commercial Real Estate Syndication Is A Smart Way To Invest With Ben Kogut

Passive real estate investing is something I’m passionate about. It gives you more options of what you can do with your life, you have more control of your time. You get more freedom and flexibility so you can spend time with your friends and family, which is what matters in life. I’ve always aspired to have enough income from investments to cover my daily living and housing expenses, so I could focus on doing what I want whenever I want.

I like to do a lot of positive things and be out there in the community and do good. Side note, you guys could always passively invest while maintaining your day job or your business. That’s how I’ve been doing it. I love what I do as a realtor. I love everything that real estate’s given to me. I love investing and it happens to be in real estate. For me, it’s one of the motivations why I work so hard. My day-to-day business is to build more income, which I end up investing, so it’s like a cycle. My main business feeds into my investing business and I turn my active income into passive income.

I’m excited to bring on my guest. His name is Ben Kogut. It’s interesting, we haven’t spoken on the phone or anything like that yet. It was only emails and DMs. This is a first for me. It’s a virtual world we live in, definitely. We got connected via LinkedIn because we have a common friend, Adam Carswell, that has a private Facebook group regarding podcasts that we’re both in.

Ben specializes in raising capital for commercial real estate syndications. They’re passive income vehicles that we’re going to talk more about in this episode. I’ve been investing in real estate syndications myself for the last several years. I wish I knew about them sooner that it’s good to start, at least now than never started off. They’re a great vehicle to build cashflow and wealth.

A little bit more info about Ben, he is a Partner and Head Investor of Relations for HJH Investments. They protect and grow their investor capital through commercial real estate syndications. Their investments include industrial buildings, shopping centers, and office buildings, which are typically anchored by high credit tenants with long-term leases throughout the United States. HJH has over $350 million in assets under management. Ben is based in Austin, Texas, and he has an MBA and CCIM certification. Ben, how are you?

I’m great. Thanks for having me.

Is there anything else you want to say to introduce yourself to my readers even more, background, and what your focus is?

Yeah. Similar to you, I started as a realtor and as a broker. I started taking the commissions that I earned and investing them in other people’s real estate projects or syndications. I started learning this world, and then I made a complete pivot from being a transactional broker into somebody that is now raising capital, being a partner and a sponsor of acquiring cashflowing properties. That has allowed me to generate passive income for myself and my family. Not only that, what I love is being able to help other people do the same for themselves. That’s what brought me down this path.

It’s great that you came from the brokerage world prior and now you switched over. I’m curious, even before you became a broker, how did you get into real estate? Is that something that you said in school?

I went to the University of Texas here in Austin and graduated in ‘04. I wasn’t sure what I wanted to do with my life, so I interviewed 50 entrepreneurs here in Austin and what I gravitated towards were the people that were involved in commercial real estate. I latched on to them as my mentors and I still have most of them as my mentors. I got into commercial real estate in 2004 or 2005 and I haven’t looked back. I’ve been doing this for more than sixteen years now.

If you find the right deal, the money will find you. Share on X

You switched over from being a broker to doing stuff that’s more transactional to raising capital. Those are completely different skillsets. What did it take for you to learn how to raise capital since it’s completely different from a broker in real estate?

It’s a mindset shift. It primarily starts with a newfound passion for teaching and for educating. I’m not a sales guy. I think of myself more as somebody that teaches about commercial real estate, triple net properties, passive income, and the tax benefits that come from that. That’s one thing. As a realtor and as a broker, you do spend a lot of time teaching people about investing in that single-purpose real estate project or house or whatever it is.

Number two, it’s always about relationships in every way. A lot of the people that I was representing or doing deals with as a broker are now people that are investors with me in a variety of different projects. Those are two easy ways to transition into this. Raising capital, if you find the right deal, the money will find you. We focus hard on making sure that we buy high-quality commercial real estate.

What I love about real estate is the relationships. People that I went to school with in grade school, high school, college, and other places that I’ve worked at even before being a realtor, I stay in touch with them and they end up becoming my clients. They follow me. All those relationships that you pick up along the way help you explode the growth of your business and whatnot.

One of my previous real estate sales coaches always says that I was one relationship away from having my business explode. I always took that to heart and I was always like, “I need to keep meeting people.” It’s great that you’re saying it’s all about the relationships because it really is. It’s amazing. That resonated with me, by the way. What skillsets do you think it takes to raise capital?

A lot on my vocation with my MBA as well as my CCIM designation, which is a commercial real estate designation, having the background in those to be able to have financial analysis skills and be able to underwrite the unit economics of the tenants that occupy the real estate that we’re looking to buy. For example, we buy shopping centers, office buildings, and industrial properties. What I like to look at and what we look at as a team is, who is it that is the tenant in the real estate? Usually, it’s a tenant that has high credit and more than five years of lease term remaining.

When we’re buying this shopping center or office building, or whatever it is, we sometimes know to the penny how much revenue is going to be coming into the landlord on day one. What we like to look at is unit economics. How many widgets or services does that tenant need to sell in order to break even? We’ll dig into that. In other words, can they afford to pay the rent that they signed a lease obligation for? What we’re looking to buy is commercial real estate that has predictable and consistent cashflow. If we can buy it better than a 9% cap, then we can afford to pay our investors a monthly dividend on day one.

That’s generally the background in how we look at it. There are other factors. Is it a good location? Is it an area that’s growing? Is it shrinking? Is it intended to get destroyed by Amazon overtime or not? There are a lot of tenants that are restaurants or bars or services, or doctors. We do a lot of medical offices. Things like that are not going anywhere. In fact, they’re just getting better.

We believe in commercial real estate as a hedge against inflation. There are many tax benefits to owning commercial real estate. We create these opportunities by creating syndications or you could call them fractional ownership for people that may not be able to buy a $20 million grocery-anchored shopping center. Instead, we’re giving you an opportunity to own a piece of the bigger pie in the benefits that come with that. That’s generally how it works.

You work over at HJH, and then you guys specialize in the industrial, the shopping centers, and the office buildings. Those are three separate types of asset classes and whatnot. Do you focus on them equally? Is there one that you focus on more?

SCF 11 | Commercial Real Estate Syndication

Commercial Real Estate Syndication: Commercial real estate is a hedge against inflation.

 

We’re diversely spread across that. What they all have in common is that they’re going to have a great quality tenant. Usually, they’ve been there a long time. If they haven’t, they’re going to be there for a long time through a long-term lease with a great quality of credit. In today’s market, September of 2021, we’ve been finding that there’s a disconnect in the market between the medical office space or in the office space. Debatable on, are people coming back to the office? We would argue and we’re seeing that employers do want their employees to come back to the office. It’s not the same across the board.

Especially with medical office, they can’t do what they need to do for a variety of reasons from home. They are showing up to the office. We happen to find there’s a lot of opportunities in the Midwest. I’m based in Austin, Texas. I have teammates that are based in Kansas, Michigan, and Ohio. We have relationships in Indiana and that part of the world in the United States. We’ve been finding that there’s a whole lot less competition of investors who are looking for deals out there. Therefore, we’re able to pick up these deals better than the 9% cap.

If they were here in Austin or probably somewhere in California, they’ll probably be somewhere in the 6% cap range. In case anyone doesn’t know what cap rate means, it’s a commercial real estate jargon that stands for capitalization rate. It’s the simple way to say what percent return you’re going to get. If it’s a 6% cap, you’re going to get a 6% return on your money. The 9% cap is a 9% return on your money. That’s a simple way of explaining what a cap rate is.

I’m not as familiar with the commercial real estate space and whatnot, but some of the tenants that you work with are big companies and big corporations. What does it mean to have a high credit rating? Are there credit reports or something like that runs from corporations? How does that work?

We bought a building that’s occupied by Walgreens. Everybody knows Walgreens. If you drive around your neighborhood, someone owns that building and it’s not Walgreens. They’re just tenants, at least from various landlords. A lot of these companies are publicly traded and you can look up what their credit rating is. Our typical credit rating is triple B credit or higher. In other words, they’re going to pay their rent because if they don’t, their credit rating is going to be impacted. None of these companies want that because it has an impact on their overall financials.

Oftentimes, we’ll buy deals that have a high credit tenant that occupies a large portion of the building, and then they’ll be some other smaller, like a freestanding dentist or some doctor or something like that. That’s cool and all. They’re not likely to leave, but there is a possibility that they will leave. We look at, “Is their rent high? Is their rent low at the market rate? If they do happen to leave, what’s it going to cost us as a landlord to find someone else to come back and pick over that space?”

We raise money on a deal-by-deal basis. If someone was interested in becoming a fractional owner in part of a syndication, they could reach out to me and they could become educated. We can get them on our investor list. Once you’re on an investor list, you can opt-in to any particular deal you want. If it’s something that doesn’t appeal to you, no sweat, no problem, wait until the next one.

We do somewhere between 8 and 10 deals a year. Heavily in the fourth quarter is when we find the seller, the most motivated to do a deal that’s better than a 9% cap, which is hard to find but definitely doable. We’ve bought 59 assets in the last couple of years and are growing. It’s about having the right team, track record, transparency, relationships, and education. All those things are part of what I get to do as the person that’s in charge of investor relations. Honestly, I’m having the most fun I’ve ever had in my career.

What does a typical investment offering look like? What’s your typical investor looking at, a minimum amount to invest, and what to expect?

I can give an example of something we did. It was a single-tenant office building in Houston that is occupied by a company called Jacobs Engineering, which is a multibillion-dollar engineering firm. It was about a $20 million building and they have a long-term lease in place. They are the number one engineer for NASA and it’s next to the NASA campus in the Houston area. It’s usually about $100,000 minimum for somebody to get into that deal.

It’s definitely a really good time to be an investor in commercial real estate. Share on X

I can’t talk about returns. There are SEC rules around that, but what I can say is that the ideal was paying a dividend right on the next month. Those investors have gotten dividends every single month for fifteen years. It’s all automated. They’ll also get a K1, which means that they have ownership in commercial real estate. There are tax benefits to that. I don’t know if you guys have talked about cost segregation, accelerated depreciation, and bonus depreciation.

You guys are doing all that cost segregation stuff, which a lot of times makes those K1s negative, which helps tax-wise, especially if you’re using money outside your SDIRA. It makes sense. You guys have a preferred return type of structure with an equity split. What kind of equity splits do you guys have?

We’ll talk about that last deal. I can’t talk about splits and return, and stuff like that. It’s part of the SEC rules. It’s a favorable arrangement and we’ve been able to raise over $100 million with what we created. I find at least that most of the people that are talking about syndications are in the multifamily business. People are buying apartments.

We took a different approach with our background in commercial real estate and buying triple net properties. We like triple net properties because as the valuations go up and the taxes go up, it’s typically not the responsibility of the landlord to pay property taxes. It’s an expense that we can pass through to the tenants who are responsible for any taxes or insurance or common area maintenance.

One of the reasons why I was excited to bring you on is because of the fact that the syndications that you offer are different. For example, I have not invested in a syndication, where there was a triple net lease and whatnot. Speaking of which, a lot of my folks don’t understand what a triple net lease is. Can you explain what that is?

Yeah, absolutely. The triple net is the taxes, insurance, and maintenance. Every commercial real estate property has those three expenses. When they’re described as a triple net property, that means that instead of the landlord paying those expenses in an apartment complex, for example, the tenant pays those expenses, plus they pay rent to the landlord. As a landlord, we don’t want taxes to go up on the properties, but I never believed they usually do. We don’t have to worry about it as investors because the tenant is going to absorb those costs.

A lot of these leases that you’re talking about are in long-term leases, around five years or so. Residential is completely different from commercial, but say one of those tenants, for whatever reason, weren’t paying or couldn’t make payment, does things like evictions and stuff like that happen over in that space? How does that work?

It’s not impossible for evictions to occur, but it’s not common. Maybe there are some examples. When a building has a tenant with high credit, if they decide to leave, they’re still going to continue to pay the rent for whatever their lease obligation goes through. Typically, if they are deciding to leave the building, they would notify the landlord and it would give us an opportunity to go back out into the market to go and hopefully find a new tenant to backfill and take over that space. That happens from time to time.

In COVID, in the beginning, we offered our tenants an opportunity to waive rent. Some took us up on it but most didn’t, to be honest, which was surprising at the time. For some of those that did, we would negotiate on a one-on-one basis. Oftentimes, it was one three-month rent in exchange for another year of lease term. That way, it gives us as landlords more stability and predictable cashflow.

At the same time, it gives them the opportunity to not have to pay rent or maybe they deferred the rent to pay it in the future. There are a lot of different ways to set that up. Frankly, we’re significantly better off now, believe it or not, than we were at the beginning of COVID, which is mind-boggling. It’s definitely a good time to be an investor in commercial real estate.

SCF 11 | Commercial Real Estate Syndication

Commercial Real Estate Syndication: Triple net properties are preferable because as the valuations go up and the taxes go up, it’s typically not the responsibility of the landlord to pay property taxes.

 

How did COVID affect the asset classes that your company focuses on?

In a lot of instances, it didn’t. In certain cases, it did. Especially the mom and pop tenants that are next to some of the bigger ones, we would give them the opportunity to renegotiate their lease, whether they pause paying rent or pause the triple nets, or something like that to help them out. It doesn’t benefit anybody, especially us as the landlord, to see them leave. That’s never what we want to do. We want to sit on the same side of the table and work something out that works for everybody.

We did have some wins, to be honest. We bought a building in Missouri that was occupied by a tenant called Academy Sports. This is a fun story. It’s like a Dick’s Sporting Goods. It’s a massive chain. We bought this building because the credit rating went down, but it was still within the realm of what we like to buy. The seller was a publicly-traded REIT that was mandated only to own commercial real estate with a certain credit rating, so it dipped below that but still within our realm. We bought this building at a massive discount. The REIT lost a couple of million bucks selling it to us.

We have a system for acquisitions to find off-market and below-market deals. That’s all we do buy. We’ve had an idea of why their credit rating was reduced and it was because they hired somebody to come in-house to renegotiate their corporate debt. He was able to do that at below par successfully, so he paid off less than what was owed. That caused the credit agencies to reduce their rating.

Fast forward at COVID, we negotiated two months of free rent and in exchange, they added two years. They went from a 9.5-year lease to an 11.5-year lease. Fast forward to late 2020, they went public, so they had a successful IPO. As a publicly-traded company, now we have an 11.5-year lease and we have a tenant that’s publicly traded. Even though we gave up two months of free rent, which is probably close to $100,000 in value, we decided that it was time to flip the building. We ended up selling the building about a year after ownership for a meaningful profit to our investors. That’s too rare, but it’s an example of something that ended up being better for us during COVID.

Everybody was going and buying sporting goods, home activities, and stuff like that. We knew that was going to be the case, plus there’s significantly more capital in the market than deals. You could call it inflation. You could call it good times in the market. I don’t know what you want to call it. We’re able to find a buyer that would be willing to pay significantly more for the asset than what we bought it for. Just a little piece of some things that we’re seeing out in the market.

Going back to what you were saying about syndications. A lot of people who follow this show already invest in syndications, but a lot of it is multifamily. Them learning from you which is a completely different asset type of class, what are advantages to consider to this type of asset class, whether it’s industrial shopping centers in your office? What’s the difference between looking at that and versus looking at multifamily?

I happen to have written a short eBook called the 5 Things To Consider When Investing In Real Estate Syndication. You can find that for free at HJHInvestments.com/book to download that. In that, we talk about the different things to consider. Within that, I go into depth with Professor Solomon from the Harvard School of Business. He talks about the four rules of cash. Are you familiar with the four rules of cash?

I don’t think I am. Can you enlighten me?

We go into more depth in it but at a high level, it’s simple. Rule number one, cash now is better than cache later. What does that mean? I’m going to broadly compare commercial real estate to multifamily. It’s broad. In multifamily syndications, often what happens is you make an investment, and then 24 or 36 months later, the sponsor will sell the property or refinance it, cash out, and give everyone back their cash. There’s a lengthy-time period where you’re going to get some money back.

Timing is everything both from the perspective of when you sell as well as on our side the buyers. Share on X

What Solomon says is cash now is better than cash later. What that implies is when you invest in a commercial real estate deal that already has the cashflow, like the deals that we do, you’re going to start seeing cash on the first month and every month after that. As long as the cashflow is still there versus multifamily, that’s one way to look at it. Another rule is more cash is better than less cash. I go into more depth about what that means.

Less risky cash is better than risky cash. When you’re comparing different asset classes, I’m not even trying to compare it to multifamily. I’m just saying when you’re looking, in general, at risk, you want risk to be called risk-adjusted. Risk is okay as long as the potential return is in line with the amount of risk that you’re looking to take on. Rule number four, and this is the rule you never want to forget, never run out of cash. We go into more depth about what that means. What you want to make sure is that the deals are fully and properly funded and that you’re not going to be set up to be exposed to a potential cash call.

There are ways to mitigate that particular risk unless it’s something that you’re not concerned about. Usually, when people put money into a deal, even if things don’t go according to plan, they oftentimes don’t want to be exposed to a potential cash call. The way that we structure deals is we have an ultra-high net worth individual personally guarantee the debt and be responsible should there be a need for more cash in the partnership, which we structure deals to have robust amounts of reserves. That number varies from deal to deal. It’s all explicitly stated in the offering memorandum, PPM, and all that stuff.

You may be okay going into another deal, whether it be multifamily or otherwise, where you put some money in and you know that potentially, you’re going to have to put more money in sometime in the future. That’s okay as long as you know that’s what’s coming down the pipeline. What I’m seeing is most people want to be in, want to get their monthly dividend, their tax benefits, regular updates, quarterly for example, and don’t want to be bothered with it. Those are some examples of what some of the benefits of commercial real estate passive income investing looks like.

You invest passively as well. What do you like to invest in passively at HJH?

I drink the Kool-Aid they serve, so I’m proudly heavily invested in HJH Investments. I started as an investor.

How long has HJH been around? How did you get connected to them to be their capital raiser guy?

Cory Harkleroad started the company several years ago. He has a great story about how he started it. He also transitioned from being a real estate agent into syndication. We both love what we do and we’re blessed in that way. We met at a real estate networking event. I had cash from equity and deal. I had an opportunity to invest and I made an investment with him in one of those deals. I started getting passive income and I was like, “This is cool. Let me learn more,” and then we built a relationship.

He became a mentor of mine. He saw the skills and the relationships that I have and he made me an offer I couldn’t refuse to become a partner in the company. More or less, handle the investor relations side, the podcasting, and teaching. I’m not the face of the company, but I’m more forward and out there sharing our story. He likes to be behind the scenes running things and all that kind of stuff. It’s a great partnership.

Related to folks that are in the middle of investing right now, say a 1031 exchange, are you able to help those kinds of folks?

SCF 11 | Commercial Real Estate Syndication

5 Things to Consider When Investing in Real Estate Syndication

Yes. For people that have a 1031 exchange, timing is everything, both from the perspective of the timing from when you sell because you’re going to have a finite amount of time for identifying flows of property. As well as on our side, if it is something that you wanted to exchange into, we will create what’s called a TIC, which is a Tenant In Common partnership.

I’m not an attorney. I’m not giving any financial advice. I’m not a CPA. Having said that, you’re going to go off the deed or whatever you sold and there are certain IRS rules that you have to check those boxes in order for it to be kosher to go on to the deed of another property. Through a tenant in common partnership, you’re a partner with our syndication partnership, so you will be on the deep and you’ll have the same responsibilities. It’s a little bit more complex and probably not enough time for this podcast, but there are ways to help people. What I would have to say about that is if you’re in the 1031 scenario, let’s have a conversation sooner rather than later so that we can see if it’s going to be a fit for your goals.

I’m glad I asked you that question because it was my understanding that 1031 exchange money couldn’t be put into a syndication. This sounds like creative work around that fits the IRS rules. I’ve never heard of that before yet, so thank you. Going back to HJH, how are you guys finding all these deals? Is it off-market? Is it on-market?

We have a lot of off-market deals come our way, but we have an acquisitions team headed by John Post in our office. He looks at between 800 and 1,500 deals every day, which is a massive amount of deals. We have a specific box, high credit long-term lease. If it fits in our box, on average, we’ll make about sixteen offers a week on a variety of those assets around the country.

I’ll share some of our techniques that have helped us be successful with winning deals. Number one, we’ll typically send a purchase contract right away as opposed to a letter of intent. Let’s cut to the chase and get down to business, number one. Number two, when we send that contract, we’ll typically send it within 24 hours of reviewing the deal. We’ll do a quick underwriting. Number three, we’re going to send a list of references preemptively. Other brokers, buyers, sellers, investors, and bankers, these are people that will vouch for us that we do what we say we’re going to do, extremely high integrity at all times.

Number four, we promise them that we’ll physically personally be on-site within two weeks of being under contract no matter where it is in the country. That has me and my team travel extensively, which is cool and fun. Even throughout COVID, we haven’t stopped traveling whatsoever. We win a lot of deals that way. About 2 out of every 3 deals that we put under contract are going to pass our DD process. Stepping one step back, 1 out of 16 offers that we make, we’re going to be able to put under contract. Those are the general metrics that we’re seeing right now.

For all these leases and whatnot that you do, I know that having a strong property management team is crucial. Do you guys do your own property management? How do you manage all of that?

We took the approach of management where we split it in half. What I mean by that is the physical side of things, the roof repairs, landscaping, things broken, or whatever are handled by a third-party company that’s local to wherever the property is. If they need to get on something immediately, we have local resources to handle that.

The other half of management is the financial side of things, collecting rents, paying taxes, insurance expenses, and so on and so forth. We have a five-person accounting team in-house that is partnered with a CPA firm called BKD, which is a national firm. All of our books are handled. We have control of it and all of our reporting, which comes out four times a year. It makes it easier for us to have all that reporting so efficiently.

Going back to the COVID question, does it relate specifically to retail and shopping centers? With COVID, people are not flocking to shopping centers as much. What kind of opportunity is there in that space when you have so many online retailers and people have shifted the way they do business versus having to go to a shopping center in person?

Think about wherever the nearest shopping center is to you and around your neighborhood. You’re not, in general, shopping the way that we use the shop at shopping centers. You’re going there because there’s a restaurant, a nail salon or some sort of service. They’re more like service centers, but service centers sound like a car shop. Think about that, why do you go to shopping centers around you? Whether it’s to go pick up something at Walgreens or to go to the dry cleaners, which is less. People have shifted, but it hasn’t gone away. The things that have gone away are gone probably for good, except for some companies that have pivoted. For example, do you have a Best Buy near you by chance?

Yeah, we do.

People’s habits shifted but they haven’t gone away. Share on X

If you had asked me ten years ago or so, “Is Best Buy still going to be around?” I would have said, “No. Amazon’s going to wipe them out.” Look at their stock. It’s incredibly high. Why is their stock going up? Why are they still thriving? A) They’re typically in great locations. B) If you go in there, you’ll start seeing that the space within it has been outsourced. You’ll see a mini-Apple store, where there’s a row and it has all the Amazon Alexa products or it has AT&T. They have all the different TVs.

Everyone knows you can go into Best Buy, look at the Vizio, Sony, Samsung, and whatever your eyes think is best. Buy that on Costco or Amazon, or whatever you want to do. My understanding is that Samsung, Sony, and Vizio are subleasing space to be able to put their stuff on display and on the wall. Retail has pivoted, is the point I’m trying to make. There’s been this massive transition.

Even in COVID, we’ve seen a lot of things change and people are adapting and moving forward. Certainly, some companies have not survived like movie theaters and things like that. There are some winners that have come out of this. Who would have thought of GameStop tenants, of which we have at least two in our portfolio? There are so many different examples.

I would hate to advise somebody to paint a brush over all of retail. Stop and think about it. The unit economics or the fundamentals or the widgets that the tenant is selling in their business, does it still make sense? It’s a question that I suggest people dive into and look at, whatever it is that they’re looking for a commercial real estate investment.

For folks that are trying to get into the syndication way of investing in that space, what questions do you recommend they ask the sponsor?

Track record is certainly a great place to start looking at. First of all, how transparent are they about it? We publish our returns on a quarterly basis so people can see exactly what we projected those returns to be and what they were. In most cases, it’s higher, but in certain cases, it’s lower. Why? We can have a one-on-one conversation about that. Personalities, do you have chemistry? In any kind of relationship, chemistry is important.

You don’t know until you get to speak with somebody, like, “Do you get along with this person? Do you trust this person? How focused are they? Is this the one thing that they’re focused on or is this just a side game where they’re trying to put together a partnership and buy whatever syndicate, or whatever it is that they’re trying to do?” It’s important to be focused. We believe in a book that was written by a guy named Gary Keller from Keller Williams called The ONE Thing. Have you heard of this book?

I haven’t read it.

There’s so much power in being able to focus on that one thing. Digging into the tax benefits and understanding that is an important piece of the puzzle. Understanding what kind of returns are available, the time horizon that is anticipated for the whole period. Are you exposed to a cash call? How much debt is going on the property?

Any goals for you or the company? Any short-term or long-term goals that you’re focusing on?

SCF 11 | Commercial Real Estate Syndication

Commercial Real Estate Syndication: What you want to make sure is that the deals are fully and properly funded, and that you’re not going to be set up to be exposed to a potential cash call.

 

We’re $350 million AUM. We’re aiming for $1 billion, so that’ll probably happen in the next few years if I had to guess. That’s exciting. I don’t see any reason why we won’t get there over time. Our mission that we talked about on a daily basis in every decision that we make is, first and foremost, to protect our investor’s capital and then grow it. In other words, return of capital is more important than the return on capital. That’s our mission and that’s our number one goal.

One question I have is, what does success mean for you personally?

Having more passive income than monthly expenses, which frankly, I’m getting there, which is awesome. Being able to spend my time however I want, which is tied to that same goal. Being able to be involved and get back in the community, which I’m heavily involved in the Jewish community here in Austin and on a national scale as well. Being able to take care of my family and friends.

I’m someone that loves to have fun. I’m good at it. I enjoy having fun, being outdoors, and staying healthy. I try to meditate every day, doing stretching workouts. Sleep is underrated. Sleep is important, is what I’m trying to say. Those are things that resonate with me around success. I’m always trying to learn. I have a massive thirst for learning.

What’s your personal superpower that’s already attributed to your current success?

I didn’t know it before until probably the last couple of years, but it’s teaching. I enjoy being able to teach people. Sharing the wisdom that I’ve been lucky and blessed enough to learn from my mentors and to be able to teach other people is a true passion of mine.

How can somebody get ahold of you?

The best way to get ahold of me is through my website, HJHInvestments.com, or you can find me on all the socials, Ben Kogut. We’d love to connect with anybody that’s interested in learning more or wants to get on our investor list or anything like that.

Thanks, Ben, for joining me on this episode. I enjoyed our conversation. I appreciate you and all the value you brought to my audience. Thanks to my readers for checking out this episode of the School of Cash Flow. Until next time, live life abundantly.

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About Benjamin Kogut

SCF 11 | Commercial Real Estate SyndicationBen Kogut is a partner at HJH Investments, specializing in investor relations. Ben is also an Austin, Texas-based commercial real estate broker with more than 15 years of experience. His passion is to help investors make wise decisions. Ben studied government and business at University of Texas and later earned an MBA from the Acton School of Business; he is also CCIM certified.