This was actually supposed to be “Yo Turd”. But had a typo in the title, so “You Turd” stays. Sounds cooler, anyway.
Exactly what is your new venture? Did you start your own RIA or something? Or just going to Ed Jones to sling A-shares?
Or are you doing some portfolio-management type stuff? Actually managing money?
What you got going on?
I’d rather not get too specific. But I’ll tell you I’m investing in an asset class that requires some operational capability. On a large scale this can be split up between ‘operators’ and investment managers. I used to be an employee of an investment manager where it was my job to do JVs with operators and acquire assets for the manager to fold into a portfolio. The operations side is pretty straight forward, just time consuming more than anything. And I have a good background on the investment/portfolio management side, so I decided to go out on my own and do it all myself. I have a couple assets under management and a handful of qualified investors who are providing most of the equity for the investments.
It’s going pretty good so far although I am dreading having to hire people, which i think is coming down the pike after I acquire 1 or 2 more assets.
So you’re building your own personal Berkshire Hathaway?
If it’s a SMLLC, how do people invest in it? How do investors make returns on their capital?
^So, real estate?
Turd, why are you dreading it? Just post in the career section and get a AF brethren!
it’s actually a really tangled web that I only follow because it’s the way i used to do it when i was institutional. each asset gets its own LLC and my single member entity is the managing member. the others invest in the owning entity as individuals. Although it’s even more complicated since I brought in ‘GP equity’ but that’s through another entity that now is the managing member in the owning LLCs and my single member entity is the managing member of the GP entity.
f#cking lawyers.
i actually started talking to a HS buddy who has an accounting background about joining me as an employee, so that would ease the burden in the short term but that will only get me through the next year probably. after that I’ll have to cast a net and deal with being a boss, literally my worst nightmare.
sounds like it
Well, a few things I believe:
Payroll sucks. Between having to have the cashflow to provide it every month, and the payroll reporting process (W-2’s, 941’s, 940’s. state unemployment), I wouldn’t take on employees unless I absolutely had to.
Being a boss sucks. Having to manage all those different personalities and having to feed all those mouths is probably not my strongest suit.
If you continue to expand business operations, being a boss and employer will eventually become inevitable.
So I guess it boils down to–would you rather expand and have to deal with the extra problems? Or would you rather say, “Nope. $10m AUM is plenty. 2% of that is $200k, which allows me to pay bills and have a pretty good lifestyle.”
Decisions, decisions…
#GreenieGetsIt
You are open to investment in Eastern European/CIS assets?
Turd is dealing in multifamily by the sounds of it
not quite although yes real estate.
hey turd im now getting RE operational/accounting experience in a few years you may just need to hire me 
imagine that! haha i could think of nothing funnier
we’d probably be best friends, bosom buddies or maybe the odd couple. i smell a great sitcom in the making. i’ll start putting some pages together.
to answer your other question, I pay a preferred return and then i get a promoted interest once the pref is paid off. I also coinvest so I get returns on that piece, plus a base management fee and property management fee. basically i fee my clients to death. the gross to net is not pretty, but that’s the nature of private equity.
the assets i buy generally cash flow above the pref so i’m into splits day 1 which is pretty nice…also keeps interests aligned to a degree.
If you want for him to remain your buddy, I would hire someone else.
Standard RE arrangement, all depends on the pref return and what your promote is. I may be in some similar deals to you.
Hire someone to be the manager of the company employees. And then you just supervise him
And then hire an assistant manager and an assistant to the manager.