Senior Living Fund, LLC Investment?

7 Replies

Hello,  

New investor looking at senior housing market to invest via Senior Living Fund, LLC. Any chance someone here has invested with them and thoughts? Thanks, Greg

Hi Greg,

Not sure if you saw this post, but it had some comments on him. I was actively in communication with the firm and have received all of their materials. The Fund Manager, Dan Brewer, is very responsive to questions and meeting with prospective investors. If you are interested, the senior living fund investor relations team is very responsive and sends materials if you reach out/sign up on their website, also below.

https://www.biggerpockets.com/forums/92/topics/274...

http://seniorlivingfund.com/

I am curious if any of these investments are 1031 eligible...

@Michael Willis , Hey Mike,  I just did a quick scan of some old posts and as of a year ago the company was issuing K-1s which indicates that there is an entity that owns the land/project and the investors have an interest in the entity.  So that wouldn't qualify.  

They may have changed the model to accommodate the tenants in common ownership you'll need to have to comply with 1031.  It's worth asking.

That's the test for 1031 eligibility - are you actually purchasing real estate or an interest in an entity that owns real estate.

Hi Dave per the rep at Senior Living Fund they do have a 1031 compliant DST now. Starting at 7% matures in 2021 (not sure what happens then) with .15 basis point increases annually paid out monthly. No points or fees and profit sharing. Claimed Annualized returns 11-13% at the end.

What happens when a DST “matures” What would be the process I the investor would go through to move onto the next investment? Easy to exit a DST for a real property? DST Vs TIC?

@Michael Willis , That's good to know.  Those are pretty strong numbers at this stage of the market.  The 11 - 13 is based on a lot of conjecture about end game.  Even 7% with escalators plus depreciation will get you to 9 - 11.  But hey - everyone's got a crystal ball.   

Interesting question about end game in a DST. The DST typically isn't as liquid as a TIC and its generally a hold till maturity kind of thing 7-10 years. @Mark Creason or @Karen T. , either of you speak to this?.  

TICs weren't designed in 2002 to be place markers but they usually have a one or two year minimum hold period with a sell out hierarchy determined by the operating agreement - fellow investors, then syndicator then open market.   

And this is intriguing to me because in theory the value of a commercial property is a function of the lease more than the property. That could actually create a demand situation in a corrective market where rent escalators plus length and quality of lease actually put the DST/TIC into an appreciating position as opposed to the hard real estate assets who are tied to the market.

The last crash was too early into the age of the fractional to tell us much.  But now we're starting to see the projects mature and sell or re-sign leases so it's an interesting intellectual exercise to proforma a tic as a medium hold defensive investing position at the end of a bull market. 

I can answer these questions but it's bit involved for a post. First I have never heard of a DST that ‘matures'. exit strategies are different on all properties and sponsors so there is not a blanket answer to that question and it is typically market driven. It's all about finding the right DST for a client just like any real estate investment. There are typically 30-40 DSTs on the market....the differences are too great to make a generalized answer.

I'd be interested in learning if there are other similar funds or well known syndicators in this space.  Can anyone share any names/links?

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