The Fundamentals of Syndication with Ike Mutabanna
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Welcome to the REI Foundation Podcast. In Today’s episode we had the awesome opportunity of interviewing President of IHM Business Group, Iqbal Mutabanna. After being the CTO of many startups in Boston for over a decade, he now lives in Dallas with his wife and two kids. Now Ike is running multiple small businesses one of which is meant to educate about the value of multifamily investing in apartment communities.
“I started investing passively in multi-family in early 2016 with Joe Fairless. When i started investing I didn’t really invest with a lot of knowledge of what I was doing, which is unusual for me, like many engineers, very deep in the details and looking at things in five different angles. Joe and I met through a common close friend and I trusted her enough that she would not recommend something to me that would be harmful. A lot of my real estate experience prior to that was really small single family stuff where the experience was mixed. I wasn’t confident that real estate was the right place for me. But I thought, let’s give this a try. I invested in one of Joe’s deals early 2016 and it did really well. I told me wife, we need to do another one…”
FINDING THE RIGHT PARTNER:
“My answer is based on my business experience. Being in the startup world I learned is to invest in the people, not the business. The first thing I would look for is the credibility and the principals followed by the promoter of the deal. If I know them personally, I ask myself how well I know them? How much can I trust them? If I don’t know them as well, what can I learn about them? How do they conduct their business? More so, how have they managed past deals and managed their relationship with their investors.”
THE FUNDAMENTALS OF SYNDICATION:
“Very simply put, syndication is similar to a mutual fund. There is one big difference though, a mutual fund puts stocks in a variety of different companies based on one thing like steel or a diversified set of stocks that all grow at 10%. There is a similar thing called REITs which are the same as Mutual Funds. Investors invest in other peoples deal that then give them a return. The main difference in syndication is that the funds are raised for a specific property. When you are a passive investor in a syndicated deal you are actually becoming an equity owner in a specific property. When you invest in a fund you are becoming a shareholder in a fund that may hold 10 other properties.”
HOW TO CONTACT IKE:
Thank you for listening! We hope you got as much value from this interview as we did.