Rental Property Investor · Member since 2021 · 335 posts · 193 votes
All - Have you invested with these guys from an investor/LP perspective? They are syndicator. Just want to make sure it’s not any form of scam. Thanks for the feedback!
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Disclosure: I have known Dan and Danny for years, since before they started passiveinvesting.com they had their own separate real estate businesses. However, I have not done a deal with them. I haven't met their partner Brandon.
They are not a scam, they are a legitimate operation. Whether their opportunities are the right fit for you is your call. I would bet you can find a few folks who have invested with them in @Jim Pfeifer's Left Field Investors group.
In general, consider doing background checks on sponsors when you're doing this type of research. They're not expensive and it can tell you a lot.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Disclosure: I have known Dan and Danny for years, since before they started passiveinvesting.com they had their own separate real estate businesses. However, I have not done a deal with them. I haven't met their partner Brandon.
They are not a scam, they are a legitimate operation. Whether their opportunities are the right fit for you is your call. I would bet you can find a few folks who have invested with them in @Jim Pfeifer's Left Field Investors group.
In general, consider doing background checks on sponsors when you're doing this type of research. They're not expensive and it can tell you a lot.
Our Community does has some experience with them. I have invested with them and can tell you they are a legitimate syndicator and not a scam. So far, they have delivered on everything they have promised - it's still early, but I like their operation.
Taylor is correct that they key is to evaluate whether their opportunities are a good fit for you and your investing goals. Evaluating the sponsor of a syndication is the most important part of the investment process in my view and using your network and Community for referrals and help with the vetting is critical.
I have not invested in real estate my self, other than TIAA real estate fund and Vanguard REIT, but am considering - What are your thoughts in comparing passiveinvesting.com vs First National Realty Partners as a partner for this?
Investor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
3y
The most important part of investing passively is selecting the right partner - but before you make that decision you ahve to decide if the operator is involved in an asset class you are comfortable with. Passiveinvesting.com is an operator in multifamily, self storage, build to rent and car washes. First National Realty seems to focus on retail. So before you compare those companies as operators it makes sense for you to decide which of those asset classes is what you are interested in - then find operators who are involved in that asset class for a comparison. I think it is difficult to compare a car wash syndicator to a retail syndicator.
For someone new to the field, agnostic to the type of product in RE, what area and partner do you recommend for someone who wants to invest well in a new asset class. Thx
That is a very difficult question to answer not knowing your situation. Are you looking for cash flow or appreciation? Do you want a quick return of capital or a long term investment? How much risk do you want and what type of return are you looking for? What asset classes are you currently in?
It's hard to make a recommendation not knowing some of the above questions, but much of this is what is discussed in passive investing communities once you get to know the people in the group. BP is great for active investors and general advice but to be a successful passive investor I think you really need to be part of a Community. You can share and learn from others' experience and your path will be much quicker and likely more successful!
Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
3y
Experience, referrals, and how much money does the GP have invested are the questions you want to ask. Remember that it's great until it's not! Proceed with caution my friend and make sure you are able to mentally let go of control as a limited partner.
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
3y
Hi @Allen Wu and Hi @Barry Fuchs great questions. It is really smart to do due diligence on sponsors and as @Jim Pfeifer said, this is the most important aspect of investing in private commercial real estate.
Dan seems to be a great guy and their firm seems to be providing a lot of value for investors. I can't imagine it being a scam. I had Dan on my podcast and I've been on his and he seems to be a wonderful leader and I've heard investors say positive things about their investments with them.
I recommend that you join a community to find and vet the best operators and investment opportunities. @Jim Pfeifer's Left Field Investors is a community I can highly recommend.
You may also want to pick up Brian Burke's outstanding book, The Hands-Off Investor. As a new passive investor, I recommend you do everything in your power to learn all you can about syndicators and fund managers, and be ready to walk away quickly if everything doesn't check out. It looks like you are off to a great start.
Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
3y
@Paul Moore and @Jim Pfeifer Great feedback. I know the original post is 2 years old. I got on a call with PassiveInvesting.com recently. He asked me what my goals are and he said to think about the information and let him know. I didn't feel any pressure from them.
They also have a real estate debt fund with 6% return on $25,000 to $100,000 or 8% return on $100,000+ investment. This information is on their site right now. The car wash investment probably wouldn't fit into my goals. Possibly the multi-family investments but I think it's a significant amount of capital to put up.
This is the third passive investing company or syndicator I've talked to. Minimum investments $50,000 to $100,000. They said it would likely be 3 to 5 year hold (one said 5 to 7 year hold) for large apartment complexes (anywhere from 80 units to 300 units). I thought it was interesting that investors would choose to exit at 3 years. I thought RE was a long term hold.
Right now I'm primarily a SFH investor with a mult-unit (with co-investors). Doing renovations locally and now trying to do one out of state (possible fix and flip), finding the deal, self managing a local rental, interviewing property managers is a lot of work with a W2 job so I'm investigating passive strategies but having little control makes me apprehensive. My goal right now is to get a quick return/large cash infusion (I know I have to pay tax on ordinary income for a flip or capital gains tax after a year).
Having been an investor in three of their offerings (Braxton at Woods Lake, Riverside Flats at Aberfoyle Village, and Monterosso), I'd suggest looking elsewhere. While the pitchbooks looked very attractive, the actual results have been less so. Braxton was supposed to be a 5 year hold, but sold 2 years early, with a 2% IRR (you read that right). Riverside Flats has a roof leak in all three buildings (litigation ongoing), so roughly 1/3 of the units can't be rented. Monterosso is underperforming and they are currently considering their options (including sale) on this 4 year old investment. I've had better luck with other syndicators. Three Pillars Capital comes to mind.
As a follow-up to my last post, Monterosso recently sold at well below purchase price. So, I'm out $100K. Can't speak to their debt funds, but I would seriously look elsewhere...
We invested $100,000 and lost essentially all of our capital this year.
There was a capital call and Investors who participated in the capital call recovered 100% of their capital call contributions and over 80% of their original investment, while those who did not or could not participate—including us—received no return of our invested capital.
At the time of the capital call, we were told only that non-participating investors would be lower in the capital stack. We were not informed that non-participation could result in a total loss of our investment. Once it became clear that the capital call proceeds were insufficient and that a sale would wipe out non-participating investors, that reality was not clearly communicated. Instead, Dan, Danny and their team decided to leave the non-participating capital call investors to absorb nearly the entire loss (though the property did sell for more than it was purchased for).
Losses happen in real estate. What matters is how they are handled. In this case, downside risk was not clearly disclosed when it mattered most, and losses were allocated in a way that benefited other investors while effectively making non-participating investors the scapegoat. In our mind, this was an inequitable wealth transfer from us to Dan, Danny, their team and other investors.
They like to pitch that they’re invested too, so our interests align. GP and LP interests only truly align when an investment performs well.
There are better GPs out there! Unlike passive investing.com, they collect no fees whatsoever. No acquisition, asset management, loan recourse, capital event, or disposition fees.