Grocapitus - Anyone have experience with them?
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Real Estate Investor · Redwood City, CA · Member since 2012 · 272 posts · 399 votes
6yDo 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.
217 Replies
Quote from @Manoj Mathew:
Quote from @Eric Bleau:
Important note - All the negative comments about Grocapitus in this string are not related to Grocapitus performance. They are for a past company called Financial Attunement, where Neal was a minority partner from late 2015 to Feb 2018. Grocapitus has an absolutely stunning profit track record over 7 exits (see below) and 800+ happy investors in 31 projects.
I am not happy with Grocapitus because they are changing the purpose regarding the use of funds which they raised Capital for without my permission.
Can you please provide some context on which project you participated in? What was the change.
- Member since 2024 · 3 posts · 4 votes2yI had invested in the UGRO Texas BTR fund. The offering document indicated certain projects which is what I subscribed to invest in. It turns out that they only did some of the projects which they indicated in the offering documents and then invested in a different project which lost money. Then they are changing the nature of investment by investing in sometime called Mission 10k. They did not have my approval to invest in these new projects. I assume that other investors who invested in the Texas BTR fund are suffering the same fate. Now Neal is talking about lending the monies in the fund for some other project. Grocapitus should be returning the cash available and not yet utilised instead of diverting the investment into projects without investor approval.
Quote from @Harish V.:
Quote from @Manoj Mathew:
Quote from @Eric Bleau:
Important note - All the negative comments about Grocapitus in this string are not related to Grocapitus performance. They are for a past company called Financial Attunement, where Neal was a minority partner from late 2015 to Feb 2018. Grocapitus has an absolutely stunning profit track record over 7 exits (see below) and 800+ happy investors in 31 projects.
I am not happy with Grocapitus because they are changing the purpose regarding the use of funds which they raised Capital for without my permission.
Can you please provide some context on which project you participated in? What was the change.
Quote from @Manoj Mathew:
I had invested in the UGRO Texas BTR fund. The offering document indicated certain projects which is what I subscribed to invest in. It turns out that they only did some of the projects which they indicated in the offering documents and then invested in a different project which lost money. Then they are changing the nature of investment by investing in sometime called Mission 10k. They did not have my approval to invest in these new projects. I assume that other investors who invested in the Texas BTR fund are suffering the same fate. Now Neal is talking about lending the monies in the fund for some other project. Grocapitus should be returning the cash available and not yet utilised instead of diverting the investment into projects without investor approval.Quote from @Harish V.:
Quote from @Manoj Mathew:
Quote from @Eric Bleau:
Important note - All the negative comments about Grocapitus in this string are not related to Grocapitus performance. They are for a past company called Financial Attunement, where Neal was a minority partner from late 2015 to Feb 2018. Grocapitus has an absolutely stunning profit track record over 7 exits (see below) and 800+ happy investors in 31 projects.
I am not happy with Grocapitus because they are changing the purpose regarding the use of funds which they raised Capital for without my permission.
Can you please provide some context on which project you participated in? What was the change.
Thanks for sharing Manoj. I agree with you. Any change in objective should be approved. The difficult part is, it’s impossible to reach out to anyone once you invest.
It would be good to have experience from others shares in this forum.
Quote from @Jeffrey Liou:
Quote from @Jay P.:
I wish I had read this thread three years ago. I have invested in Grocapitus' project in Texas and it has been three years now. They couldn't get a construction loan and were constantly blaming the cities being tough on their permit process. After three years, they have put a pause on the construction for another year stating that the labor costs are too high now. I don't know if they will ever start construction and if they do how long will my money be locked with them.
At this point, I would recommend to stay away from them until they can show some results with new constructions.
In the meantime, I had invested in another syndication in the same time frame in the same Texas market. They have completed construction and 90% of the units are leased up. A payout of 8% has already been made and they have an exit plan in the works.
So, there is no reason why Grocapitus was not able to get going other than their incompetence.
Hi Jay,
May I ask if you invested in the Botanica SouthPark? Or was it another project in TX?
Yes to both.
Quote from @Jay P.:
Quote from @Jeffrey Liou:
Quote from @Jay P.:
I wish I had read this thread three years ago. I have invested in Grocapitus' project in Texas and it has been three years now. They couldn't get a construction loan and were constantly blaming the cities being tough on their permit process. After three years, they have put a pause on the construction for another year stating that the labor costs are too high now. I don't know if they will ever start construction and if they do how long will my money be locked with them.
At this point, I would recommend to stay away from them until they can show some results with new constructions.
In the meantime, I had invested in another syndication in the same time frame in the same Texas market. They have completed construction and 90% of the units are leased up. A payout of 8% has already been made and they have an exit plan in the works.
So, there is no reason why Grocapitus was not able to get going other than their incompetence.
Hi Jay,
May I ask if you invested in the Botanica SouthPark? Or was it another project in TX?
Yes to both.
Did the construction start? How come data driven method did not see that construction costs will only rise? How can they not get loan with good fundamentals? Looks like another 2 projects which are running in trouble.
So far troubled and delayed projects list:
1. Buffalo rails: running 4+ yrs behind estimates. No visibilty insight
2. Ugro Texas - running behind
3. Botanical South Park
4. Another project in Tx
5. Rtp nova project - all principal at risk (failed project)?
If you all pm me project name, year invested, promised exit and current status. I will publish list of failed delayed projects for Grocapitus so people can compare against successful exits and decide accordingly.
- Any follow up? I see google maps and bing maps both do not show any development in this area yet in satellite view.
Quote from @William Woodring:
Update on my post
As pointed out, the initial terms on my contract in Oct 2021 were beyond industry standards. It took a posting from me fir Grocapitus to make adjustments?? What’s that say about Grocapitus and their business model.
Grocapitus had an ephipany about industry standards?
So I would assume the San Antonio project is sold out if the terms have been adjusted to be more reasonable. However, as of June 2022, I see these properties are still being advertised. When I made my earnest money deposit, in Oct, I was told production would be in 2022 and completed by 2023. That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project. I was told ( I better hurry, the project is just about sold out)
As of June, the project is still selling and now the timeline has moved to the right by another year, 2023-2024. If I hadn’t got out of the project, I would have tied up $500,000 for potentially 3 years.
Industry standards are currently between earnest money to ownership is 12 months.
Grocapitus is saying it’s ok to tie up hundreds of thousands of $$ for 3 years. Incredibly poor business deal.As for the increase in rental potential on the properties. That means nothing until the properties are sold and rented. Even with a bump of $200 in rent. That will most probably be offset by an increase in new mortgage costs and increased rates.
It seems there are still issues with the San Antonio project. I am glad I walked away. It wasn’t a good deal and since the project production keeps moving to the right and there seems to be an unlimited number of properties available, one has to wonder what’s going on. I find that amusing as I was told I was buying the last “two” buildings and I better hurry or they would be gone. I would caution any investor to beware and run the numbers independently of the spreadsheets provided by the Grocapitus sales team. - Member since 2024 · 3 posts · 4 votes2yI will be happy to connect. How can I privately message you?
Quote from @Harish V.:
Some of you have reached out to me to see if we can connect on zoom or other means to pursue legal options. If anyone can point us to resource or would like to join please PM me.
- 2yMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
Quote from @Harish V.:
Any follow up? I see google maps and bing maps both do not show any development in this area yet in satellite view.Quote from @William Woodring:
Update on my post
As pointed out, the initial terms on my contract in Oct 2021 were beyond industry standards. It took a posting from me fir Grocapitus to make adjustments?? What’s that say about Grocapitus and their business model.
Grocapitus had an ephipany about industry standards?
So I would assume the San Antonio project is sold out if the terms have been adjusted to be more reasonable. However, as of June 2022, I see these properties are still being advertised. When I made my earnest money deposit, in Oct, I was told production would be in 2022 and completed by 2023. That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project. I was told ( I better hurry, the project is just about sold out)
As of June, the project is still selling and now the timeline has moved to the right by another year, 2023-2024. If I hadn’t got out of the project, I would have tied up $500,000 for potentially 3 years.
Industry standards are currently between earnest money to ownership is 12 months.
Grocapitus is saying it’s ok to tie up hundreds of thousands of $$ for 3 years. Incredibly poor business deal.As for the increase in rental potential on the properties. That means nothing until the properties are sold and rented. Even with a bump of $200 in rent. That will most probably be offset by an increase in new mortgage costs and increased rates.
It seems there are still issues with the San Antonio project. I am glad I walked away. It wasn’t a good deal and since the project production keeps moving to the right and there seems to be an unlimited number of properties available, one has to wonder what’s going on. I find that amusing as I was told I was buying the last “two” buildings and I better hurry or they would be gone. I would caution any investor to beware and run the numbers independently of the spreadsheets provided by the Grocapitus sales team.I live in Buffalo NY and have not seen much going on at this location. We are also temporary heat providers for most large construction projects in and around Buffalo NY, neither I nor anyone in the industry that I know if has been contacted about setting up temporary heat for this project which is normally one of the first steps before a project gets into winter.
Irish Jones Realty4.947 Reviews Quote from @Manoj Mathew:
I will be happy to connect. How can I privately message you?Quote from @Harish V.:
Some of you have reached out to me to see if we can connect on zoom or other means to pursue legal options. If anyone can point us to resource or would like to join please PM me.
Please check my message in your biggerpockets inbox.
For everyone here: update on Buffalo project. Got new update, nothing encouraging. Still delays or below plan progress. All self praise shared by Neal Bawa before was just that advertisement. Does not capture the pain investors are going through and will continue to suffer. No remorse.- Member since 2016 · 5 posts · 8 votes2y
I did not get any message from you in my inbox
Strange looks like two Manoj Mathew accounts. Your post above shows "1" post and account opened since 2016. Other message in this group shows Manoj Mathew account opened since Sept 4, 2024. Probably that may be causing confusion.
- Did you end up investing? What is the current status? Botanica Southpark apparently failed (sort of) as per other users.
Quote from @Jeffrey Liou:
I contacted Grocapitus a few days after their webinar presentation on Botanica Southpark. I was told that the deal was full within minutes after the webinar ended. Apparently 200 some people sent in signed paperworks within minutes. I am puzzled how people were able to complete proper due diligence that quickly. Or is Grocapitus really is that solid that people just have that much faith. I am new to syndication investing so I really don't know which is the case here. I looked at their Houston Fourplex presentation deck and it appears that the Southpark project is almost the same in terms of building design etc (the interior pictures of the fourplexes are exactly the same).
I too am considering investing in their Southpark fourplexes so would definitely appreciate people sharing their thoughts and investment experiences.
Quote from @Eric Bleau:
Important note - All the negative comments about Grocapitus in this string are not related to Grocapitus performance. They are for a past company called Financial Attunement, where Neal was a minority partner from late 2015 to Feb 2018. Grocapitus has an absolutely stunning profit track record over 7 exits (see below) and 800+ happy investors in 31 projects.
Can you please update the track record to include failed and delayed projects for Grocapitus. As I predicted failures showed up in 2-3 years.
- Member since 2021 · 6 posts · 9 votes2y
Quote from @Harish V.:
Did you end up investing? What is the current status? Botanica Southpark apparently failed (sort of) as per other users.Quote from @Jeffrey Liou:
I contacted Grocapitus a few days after their webinar presentation on Botanica Southpark. I was told that the deal was full within minutes after the webinar ended. Apparently 200 some people sent in signed paperworks within minutes. I am puzzled how people were able to complete proper due diligence that quickly. Or is Grocapitus really is that solid that people just have that much faith. I am new to syndication investing so I really don't know which is the case here. I looked at their Houston Fourplex presentation deck and it appears that the Southpark project is almost the same in terms of building design etc (the interior pictures of the fourplexes are exactly the same).
I too am considering investing in their Southpark fourplexes so would definitely appreciate people sharing their thoughts and investment experiences.
No, I didn't invest with them at all after learning your experience with Grocapitus. They did contact me asking to invest despite initially telling me it was full (space opened up, etc, etc) but I just ignored them after learning other's experience.
- I am happy I saved someone from this group.
Quote from @Jeffrey Liou:
Quote from @Harish V.:
Did you end up investing? What is the current status? Botanica Southpark apparently failed (sort of) as per other users.Quote from @Jeffrey Liou:
I contacted Grocapitus a few days after their webinar presentation on Botanica Southpark. I was told that the deal was full within minutes after the webinar ended. Apparently 200 some people sent in signed paperworks within minutes. I am puzzled how people were able to complete proper due diligence that quickly. Or is Grocapitus really is that solid that people just have that much faith. I am new to syndication investing so I really don't know which is the case here. I looked at their Houston Fourplex presentation deck and it appears that the Southpark project is almost the same in terms of building design etc (the interior pictures of the fourplexes are exactly the same).
I too am considering investing in their Southpark fourplexes so would definitely appreciate people sharing their thoughts and investment experiences.
No, I didn't invest with them at all after learning your experience with Grocapitus. They did contact me asking to invest despite initially telling me it was full (space opened up, etc, etc) but I just ignored them after learning other's experience.
- Member since 2021 · 6 posts · 9 votes2y
Quote from @Harish V.:
I am happy I saved someone from this group.Quote from @Jeffrey Liou:
Quote from @Harish V.:
Did you end up investing? What is the current status? Botanica Southpark apparently failed (sort of) as per other users.Quote from @Jeffrey Liou:
I contacted Grocapitus a few days after their webinar presentation on Botanica Southpark. I was told that the deal was full within minutes after the webinar ended. Apparently 200 some people sent in signed paperworks within minutes. I am puzzled how people were able to complete proper due diligence that quickly. Or is Grocapitus really is that solid that people just have that much faith. I am new to syndication investing so I really don't know which is the case here. I looked at their Houston Fourplex presentation deck and it appears that the Southpark project is almost the same in terms of building design etc (the interior pictures of the fourplexes are exactly the same).
I too am considering investing in their Southpark fourplexes so would definitely appreciate people sharing their thoughts and investment experiences.
No, I didn't invest with them at all after learning your experience with Grocapitus. They did contact me asking to invest despite initially telling me it was full (space opened up, etc, etc) but I just ignored them after learning other's experience.
Yes, Thank you! But it pains me to hear that you and others are being cheated out of your hard earned money.
More projects that are dead in the water.
- Botanical SouthPark, Austin - Projected construction completion (Oct 2023), Projected IRR 20%, Preferred return 8%
- Botanica Chase Hill, San Antonio - Projected construction completion (June 2023), Projected IRR 22%, Preferred return 10%
- Park Lane, Houston - Projected construction completion (July 2022), Projected IRR 22%, Preferred return 8%
- Looks like all ugro projects. They removed all Ugro projects from main website. Maybe preparing to pivot.
Quote from @Jay P.:
More projects that are dead in the water.
- Botanical SouthPark, Austin - Projected construction completion (Oct 2023), Projected IRR 20%, Preferred return 8%
- Botanica Chase Hill, San Antonio - Projected construction completion (June 2023), Projected IRR 22%, Preferred return 10%
- Park Lane, Houston - Projected construction completion (July 2022), Projected IRR 22%, Preferred return 8%
List of failed delayed projects contributed by community:
1. Buffalo rails: running 4+ yrs behind estimates.
2. Botanical chase hill, San Antonio - Original completion June 2023
3. Botanical South Park - Original Projects completion Oct 2023
4. Park lane, Houston - Original projected completion 2022.
5. Rtp nova project - all principal at risk (failed project)?
6. Equinox, New Braunfels, Tx - delayed no work started?
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Matthew Irish-Jones:
Quote from @Harish V.:
Any follow up? I see google maps and bing maps both do not show any development in this area yet in satellite view.Quote from @William Woodring:
Update on my post
As pointed out, the initial terms on my contract in Oct 2021 were beyond industry standards. It took a posting from me fir Grocapitus to make adjustments?? What’s that say about Grocapitus and their business model.
Grocapitus had an ephipany about industry standards?
So I would assume the San Antonio project is sold out if the terms have been adjusted to be more reasonable. However, as of June 2022, I see these properties are still being advertised. When I made my earnest money deposit, in Oct, I was told production would be in 2022 and completed by 2023. That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project. I was told ( I better hurry, the project is just about sold out)
As of June, the project is still selling and now the timeline has moved to the right by another year, 2023-2024. If I hadn’t got out of the project, I would have tied up $500,000 for potentially 3 years.
Industry standards are currently between earnest money to ownership is 12 months.
Grocapitus is saying it’s ok to tie up hundreds of thousands of $$ for 3 years. Incredibly poor business deal.As for the increase in rental potential on the properties. That means nothing until the properties are sold and rented. Even with a bump of $200 in rent. That will most probably be offset by an increase in new mortgage costs and increased rates.
It seems there are still issues with the San Antonio project. I am glad I walked away. It wasn’t a good deal and since the project production keeps moving to the right and there seems to be an unlimited number of properties available, one has to wonder what’s going on. I find that amusing as I was told I was buying the last “two” buildings and I better hurry or they would be gone. I would caution any investor to beware and run the numbers independently of the spreadsheets provided by the Grocapitus sales team.I live in Buffalo NY and have not seen much going on at this location. We are also temporary heat providers for most large construction projects in and around Buffalo NY, neither I nor anyone in the industry that I know if has been contacted about setting up temporary heat for this project which is normally one of the first steps before a project gets into winter.
thats a nice cottage industry winter heat.. We have winter dry out with fans.. the guy who owns that has thousands of fans going in the northwest.. Quote from @Eric Bleau:
William Woodring brings up very good points, so here is detailed context. Firstly, we have to grudgingly agree with William that 30% down payment was onerous. Our Fourplex 100% ownership strategy has evolved over time, and based on feedback from William and others, we now charge a 20% down payment, instead of 30%.
Secondly, we now pay the investor interest on the down payment, as a discount on the final price. These changes have been made in January 2022. Since the changes were made, demand for the product has roughly doubled.
With regards to actual demand vs ‘implied demand’, the demand for our fourplexes is actually very high. We have launched five fourplex projects, and of all the fourplexes in all of those projects that were offered, only two are available for sale in Feb 2022. So, over $40 Million of fourplexes were sold in the last 14 months. The typical project sells out in 30-45 days, though one of them took longer.
All of our projects have a detailed Purchase and Sale Agreement (PSA) that buyers sign with details on terms and construction timelines. Perhaps William did not review the entire document.
With regards to William’s comments about rosy financials, we have to disagree. I purchased a fourplex myself (Grocapitus did not give me a discount), and have seen projected rents spike by over $200 per month beyond what was projected). Later this year, as a bunch of Fourplexes from different projects deliver, I will post budgeted financials vs actuals, and also post multiple unedited reviews from the buyers. We can say with confidence that those buyers will not consider the financials rosy, but conservative.Please update how you are doing vs projected. I would like to know more.
Btw if Grocapitus investors want to discuss deals please contact me. We have investors group set up.
- Member since 2016 · 5 posts · 8 votes2y
I subscribed to Ugro Texas BTR Fund. Grocapitus sold me the Ugro Texas BTR Fund by proposing certain projects when I subscribed. Now it is using the funds for other projects. The projects proposed by Ugro Texas BTR at the time of subscription did not materialise.
- Investor · Cary, NC · Member since 2012 · 218 posts · 196 votes2y
@Manoj Mathew Is this allowed in the PPM-legal documents that your funds can be used for different assets/projects than were defined?
- Member since 2016 · 5 posts · 8 votes2y
It is not adhering to the representations made in the PPM. But when I raised this question, Neal told me that the Subscription and Operating agreement gives them the power to do whatever they wish.
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