Grocapitus - Anyone have experience with them?

Buying & Selling Real Estate
7yFollow

Grocapitus - Anyone have experience with them?

Ryan Goff
Houston, TX · Member since 2018 · 28 posts · 4 votes

Hello,

Has anyone worked with Grocapitus and were their revenue estimates accurate? Any comments on things worked out? I tried searching the forum expecting to find something but was having trouble. Please PM if you've worked with them.

Thanks in advance,

Ryan

2Reply
2,498 views

Most Popular Reply

Jeff Pollack
Real Estate Investor · Redwood City, CA · Member since 2012 · 272 posts · 399 votes
6y

Do NOT invest with Grocapitus. Neal Bawa sounds like he knows what he's talking about, but his track record is terrible. Their underwriting is pie in the sky unrealistic and puts little or none of his own money into his deals. I have a buddy who invested in a project in Las Vegas that crashed and burned. They are now selling resulting in a 100% loss for investors. 

I invested in a project with Neal Bawa and his former partner Jean-Marc Landau on a project in Buffalo, NY three years ago. Neal and Jean-Marc were supposed to secure construction funds. They were unable to do so and have ostensibly walked away from the project leaving their partners to clean up the mess. Despite their track record, both these guys continue to peddle their snake oil. They have become good at marketing out of necessity as nobody invests with them twice. Avoid them like the plague. 

31Reply
See this reply in the discussion

210 Replies

Jump to latestLatest
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    @Eric Bleau I would like to hear from people having cash flowing and exits through Grocapitus. Trying to distance away from financial attunement is like Morris Invest/SDIRA Wealth. just buying time. Its a costly mistake for any investor to think things changed. There are plenty of firms which were never dishonestly managed, no need to only look at rosy projections, which may not be backed up in long run and not at management past.  Thats what I did investing in Buffalo. They gave examples of other deals cash flowing or near exit. I never verified with investors. My mistake was believing Neil/Financial attunement. I have been very patient with my investment. Now I am getting impatient..

    As I said. I would like to see exits from some projects. 

    2Reply
  • Jeffrey Liou
    Member since 2021 · 6 posts · 9 votes
    5y

    @Eric Bleau,

    When was Grocapitus started?  On the Grocapitus it shows only 1 property sold.  Could you share the returns on this particular property?  Or are there data/track record from other exits that potential investors can review?  Grocapitus website doesn't seem to have this type of info. Not projections but real data from past exits or current project.

    2Reply
  • Eric Bleau
    Rental Property Investor · Sacramento, CA · Member since 2017 · 26 posts · 12 votes
    5y

    Hi Jeffery. Grocapitus started in April 2018. We have already had one exit, 22% IRR. We have 4 properties for sale this and next quarter, so please ask again in 3 months and in 6 months. The two that are already in contract will have 14% IRR (Chelsea Place closing next month) and 21% IRR (Lakewood Oaks closes in late July).

    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    @Eric Bleau BTW grocapitus project The Grid is with same investment company that is running Buffalo project with that I invested in with Financial Attunement, that is Blackfish investments.  Just saying Mr. Neal Bawa is still swimming in same circles.

    2Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    Oh What do you know @Eric Bleau, the buffalo investment I am talking about is on Grocapitus website too. 

    PowerPoint Presentation (grocapitus.com)


    3Reply
  • Joseph Bramante
    Developer · Houston, TX · Member since 2017 · 161 posts · 134 votes
    5y

    @Harish V. and @Jeffrey Liou sorry to hear about your situation. You can not depend on syndicators these days to underwrite correctly since they seem to be more focused on growing large mailing list and collecting huge upfront fees for closing deals. Whether or not they perform is secondary. 

    I recommend you take some courses on underwriting that are geared towards passive investors. Most of whats out there is for syndicators trying to buy deals. They are different things but with seemingly lots of overlap. 

    Regarding experience, we have actually exited 5 deals for an average IRR of 23.5% and Avg Equity multiple of 2.63. I have attached 2 bell curves showing all 5 properties.

    Looping you in also @Ryan Goff @Keith Meyer @Vincent Powell @Jeff Pollack @Jason Merchey @Santiago Fajardo @Gopinath Chandra @John Gatsoulas @Jay Hinrichs

    1Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y
    Originally posted by @Joseph Bramante:

    @Harish V. and @Jeffrey Liou sorry to hear about your situation. You can not depend on syndicators these days to underwrite correctly since they seem to be more focused on growing large mailing list and collecting huge upfront fees for closing deals. Whether or not they perform is secondary. 

    I recommend you take some courses on underwriting that are geared towards passive investors. Most of whats out there is for syndicators trying to buy deals. They are different things but with seemingly lots of overlap. 

    Regarding experience, we have actually exited 5 deals for an average IRR of 23.5% and Avg Equity multiple of 2.63. I have attached 2 bell curves showing all 5 properties.

    Looping you in also @Ryan Goff @Keith Meyer @Vincent Powell @Jeff Pollack @Jason Merchey @Santiago Fajardo @Gopinath Chandra @John Gatsoulas @Jay Hinrichs

     Precisely. After 5 years when exits are due the syndicators will start forming new companies to reset the clock and blame previous experience to difference of philosophy of previous partners. Its a shame, burns passive investors. I have decided to DIY and am getting good learning experience. I think DIY is worth the trouble, even if you end up loosing, you will learn a lot. In case of syndication or passive investment, its a black box and you do not learn much.

    2Reply
  • Anna McClure
    Member since 2018 · 1 post · 0 votes
    5y

    @ Eric Bleau Rental Property Investor from Sacramento, CA

    Regarding the returns for Chelsea Place, it is NOT 14%! the devil is in details: " 

    • As we stated in the last quarterly webinar, we are projecting average annual returns of approximately 12% for the 30 month hold of this investment. The total return for this investment is approx 30%, which includes the 10% that was previously distributed." 


    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    @Anna McClure Are you associated with Grocpitus? You just joined to post this?

    2Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    One question to people with knowledge. Any idea if syndicator does not perform, can we fire them. I.e. take over the project, or is it that investors have no choice but to wait for syndicator to do something.

    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    Another day, another disapointing update from Buffalo project by Grocapitus/financial attunement.

    Stay away from these two companies is my opinion.

    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    Interesting thing is through this thread I have come in contact with many people who invested with grocapitus and now are not sure. I hope that 1st time investors will read this thread and be very careful when investing with Grocapitus and demand penalties for delays and non performance.

    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    5y

    Just wanted to update community on the Neal Bawa/Grocapitus state of affairs with Buffalo project. New update after two months. Looks like things have started moving now. Though still picture is murky.

    After 2 months the update is that "We are out of investor capital" and partner is loaning the venture money.

    No mention of Brownfield credits money that was supposed to be enough to pay 10% preferred return. I did ask, as usual, do not expect to get response soon.

    Thats huge amount of money they have been careless with. Still promising IRR 25%. I am sure hoping for that to happen and soon.

    3Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    Many questions no answers. Mr  Eric Bleau, Anna McClure all ran away. Never answered even PMs. Will keep this thread alive with our experience with Mr. Neal Bawa.

    1Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    Here are the problems we faced with Mr. Neal Bawas project.

    1. Project running 2+ years late due to financing. Good projects should not face this issue. Experienced teams should have network to avoid such outcomes. Problem with underlying data and assumptions.

    2. Missed opportunities. Brownfield credits missed, no explanation on why. PPP not taken advantage of. Points to problems with project analysis, network and management issues.

    3. Missed market opportunity due to college reopening this year. Points to Management issues.

    4. Multiple quarters of busy updates and changing directions, failure to find credible partners.  Points to network issues and management credibility.

    0Reply
  • Peter Grote
    Investor · Seattle, WA · Member since 2016 · 51 posts · 13 votes
    4y

    Hi everyone,

    I'm a bit late to the thread which began 3 years ago, but I invested in 2 value-add syndications with Grocapitus which have since sold, and I made a decent return on capital. Neal is a capital raiser and so all projects with Grocapitus will be with a different group of GPs as you can see from closely examining the portfolio page on their website. I have no other investments with them at this time. 


    Their focus currently appears to be on new development, mostly in the boutique BTR space. These projects are just beginning to break ground so they have yet to establish a track record in this area. I believe that Neal is a very successful capital raiser by virtue of being in the Bay Area with ties to the tech world, so he has tapped a wealthy investor group through his Multifamily meetup and educational content that he provides.

    I agree with the comments above that as an investor we always must do our own due diligence which can and should take time to be done carefully. If you invest repeatedly with one operator who is repeating something you've seen them do successfully in the past, then it may be easier to do your due diligence more quickly. When you are investing with a capital raiser, you are ultimately investing in whoever they are partnering with as the operator, and you must do your due diligence on that complete team and look at their track record. 

    7Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    Agree with Peter that with Grocapitus you need to research the actual principals. You should not rely on Grocapitus to do it for you. They just collect fees and provide you infrequent email update in return. They are not accountable. They are not fiduciary.

    1Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    Forget Fiduciary, I am finding more information about Grocapitus/MultifamilyU that leads me to believe strongly that Mr. Neal Bawa is outright bad news and should be avoided. PM me if you want details.

    2Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    Another day another disappointing update from Buffalo project from Mr. Neal Bawa and company.

    Between August and Nov update, its hard to find any change.

    Items in progress earlier, are still in progress. All timeline is now delayed by 3 months. In short no change.

    Cash flow that was supposed to start in 2019, will now start "in a couple of years". 

    The only new thing is offer to meet with Neal Bawa. I don't think I will take that up. I have offered to help before, to which I got reply that best thing you can do is let us do our job. So please do that, no need to spend time talking to us and delaying the project another 3 months.

    1Reply
  • Viral Patel
    San Jose, CA · Member since 2018 · 74 posts · 13 votes
    4y

    I m looking into an investment with grocapitus and was wondering if anyone was able to exit out of investment successfully. I was able to find only this page on reviews on the company. I have read all of them and was wondering if there are more good or bad experiences that are able to exit the project as planned. Please share your experiences.  Thanks 

    0Reply
  • Kaustubh Johri
    Investor · Atlanta GA · Member since 2018 · 188 posts · 71 votes
    4y

    Wow.. sad to see the 'not so good' reviews of @Neal Bawa.

    During Covid, I followed his podcasts religiously. I guess I will take a step back for now and evaluate the MFU investing landscape for now. 

    3Reply
  • William Woodring
    Member since 2018 · 5 posts · 10 votes
    4y

    I was caught up with low inventory and signed up to buy one of Grocapitus projects in neu Braunfels. 
    The requirement was a non refundable 30% down in 30 days without a contract or time line for construction. I was told the project is sold out yet construction won’t start for over a year. This doesn’t sound right or feel right. I am pulling the plug on working with Grocapitus. 
    the financials were to rosy and not realistic. In the end I am going to be holding the bag. Not going to happen. 
    Grocapitus is great with marketing light on details. 

    3Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    This is typical sales tactic they use. They are sold out but can accommodate you if you act fast.  

    I agree with what you said. Good you did not fall for it like me (another project). Still waiting for it to start after 4+ years

    0Reply
  • Alan DeRossett
    Investor · Thousand Oaks, CA · Member since 2017 · 302 posts · 123 votes
    4y
    An interesting company looks good an LLC I prefer stock in REITS will look into that further the domain grocapitus.com is registered at Tucows in Canada and a 415 area code for office that's consistent with a Tech company $75 k buy-in.
    0Reply
  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
    4y

    In any case, I do believe that Mr. Neal Bawa will again change companies and distance himself from all wrongs done at Grocapitus. Its seems to be the MO, 3-5 years then new company. Grocapitus is already 3+ years, so probably 1-2 years more. Investors at this time should be extra careful.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free