New Era Capital Syndication deal. Due dilligence concerns.

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New Era Capital Syndication deal. Due dilligence concerns.

Robert P.
Investor · Naperville, IL · Member since 2015 · 37 posts · 11 votes

I invested in my first syndication earlier this year through Crowdstreet with a fund managed by New Era Capital. https://neweracapitalpartners..... I rather foolishly didn't do much in the way of due diligence and now am a bit scared because I can't find much about the group which claims to have been managing capital for years.  Has anyone heard of these guys or know of a place to vet sponsors?  Maybe I'm being paranoid.

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Clarissa Jones
Los Angeles, CA · Member since 2021 · 5 posts · 4 votes
5y

Hello (: from what I have learned thus far about syndications, it is best when those are registered with the SEC (Securities and Exchange Commission) for at least the US. That way, there is some kind of documented protection of the investment. Not sure if that would help in this case, but best wishes to you regardless!

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y

    I found them on Verivest but there doesn't seem to be anything on there by way of track record: https://verivest.com/s/new-era...

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  • Clarissa Jones
    Los Angeles, CA · Member since 2021 · 5 posts · 4 votes
    5y

    Hello (: from what I have learned thus far about syndications, it is best when those are registered with the SEC (Securities and Exchange Commission) for at least the US. That way, there is some kind of documented protection of the investment. Not sure if that would help in this case, but best wishes to you regardless!

    2Reply
  • Robert P.
    OP
    Investor · Naperville, IL · Member since 2015 · 37 posts · 11 votes
    5y
    Originally posted by @Taylor L.:

    I found them on Verivest but there doesn't seem to be anything on there by way of track record: https://verivest.com/s/new-era...

    That is what's concerning me. They speak of a long track record and being founded in 2009 but I can't find any evidence of it. Their website seems to have been registered last year. I'm now worried about fraud.

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  • Robert P.
    OP
    Investor · Naperville, IL · Member since 2015 · 37 posts · 11 votes
    5y
    Originally posted by @Clarissa Jones:

    Hello (: from what I have learned thus far about syndications, it is best when those are registered with the SEC (Securities and Exchange Commission) for at least the US. That way, there is some kind of documented protection of the investment. Not sure if that would help in this case, but best wishes to you regardless!

     Thanks.  Maybe this will be a lesson learned hard situation.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y
    Originally posted by @Robert P.:
    Originally posted by @Taylor L.:

    I found them on Verivest but there doesn't seem to be anything on there by way of track record: https://verivest.com/s/new-era...

    That is what's concerning me. They speak of a long track record and being founded in 2009 but I can't find any evidence of it. Their website seems to have been registered last year. I'm now worried about fraud.

     Yes, the stark reality is that it's best to do this type of DD before you invest a penny into a deal. If I were in your shoes my next step would be to research the individuals involved and learn more about them.

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  • Robert P.
    OP
    Investor · Naperville, IL · Member since 2015 · 37 posts · 11 votes
    5y

    Thats what I'm going to do. I guess at some point if you find enough cause for concern you can let Crowdstreet and the FBI and SEC know for them to investigate.

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    5y

    Are you wanting to get your money back? reach out to them and ask for redemption at a discount.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    5y

    Any syndicator should be researched. If they are asking a lot say 100k and up then that may be a big ask for some investors if they cannot verify. If it's 10k buy in and passive investor is multi-millionaire then often it's play money and taking a punt on a newer company to see if they are real and can perform. Often those syndications have to offer above market splits and returns to entice investors to invest otherwise they can go to syndicators easily vetted at more industry standards terms and splits.

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  • Jeff He
    Investor · Member since 2019 · 145 posts · 131 votes
    5y

    @Robert Ped

    +1 to @clarissa Jones point. See if the sale was registered with the SEC. I believe Crowdstreet does Reg D offerings, which is publicly available.

    If the offering isn't registered, this may count as an illegal/improper security sale and legal action can be taken by the SEC.

    *Not formal legal advice. Always seek a professional.

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  • AJ ShepardPro Member
    Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
    5y

    I know the guys at verivest, they do background checks on all the people involved in the GP before putting the company on there.  

    Crowd street also has a rigorous application process and I would find it hard to believe that it is straight fraud.

    Is the deal going bad and are they running into permitting problems?  Development is a very risky business and I know a lot of the deals on crowdstreet can be development deals.

    How long has it been since you heard from them?  It’s not uncommon to get quarterly reports.


    Before jumping to conclusions, you may want to reread through the documents and confirm what you invested in.  I see ground up development of hotels on their bio, which sometimes means you won’t see a distribution until it’s complete, which could be a couple years.


    1Reply
  • Jason Powell
    Beaverton, OR · Member since 2014 · 118 posts · 119 votes
    5y

    Robert, CrowdStreet is not a Craigslist where anybody can post anything they want. CS does more sponsor vetting than any single individual I've ever met. New Era is legitimate and has many happy repeat investors whom I know personally. If you have any tangible concerns, I'd vocalize those to CrowdStreets investor relations team. I'd also recommend spending some time watching the video content on how CrowdStreet screens sponsors and deals. 

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  • Robert P.
    OP
    Investor · Naperville, IL · Member since 2015 · 37 posts · 11 votes
    3y

    Thanks.  I'm sure I was just being a bit paranoid.  The big concern was just not being able to find any evidence of a history of the company.  Doing some research on the individuals I saw a background of various real estate companies and wasn't sure what to make of it.   So far I can't really complain other than to say I'd like to have a bit more transparency on the financial reporting of what's going on but hearing that others have had success with them is reassuring.

    1Reply
  • Nance Hill
    Member since 2023 · 1 post · 0 votes
    3y

    Robert, any update on your investment and experience with New Era? I am reviewing an investment with them now. Any update you have would be so helpful. Thank you!

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