10Y - 32x Equity Multiple Fund

Multi-Family and Apartment Investing
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10Y - 32x Equity Multiple Fund

Cody Ellis
Member since 2023 · 2 posts · 0 votes

Anyone hear of this fund from Bala Krishnan? Thoughts?  Down and dirty, they're investing in ground up class A multi-family development in the Phoenix metro area.  Projecting 32x return after about 10 years.  Instead of distributing the quarterly cash distributions, they are reinvesting it in the deal to continue to scale to bigger projects.  Looks to good to be true, but I'm interested in some thoughts from the experienced syndicators!

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Cody Ellis:

    Anyone hear of this fund from Bala Krishnan? Thoughts?  Down and dirty, they're investing in ground up class A multi-family development in the Phoenix metro area.  Projecting 32x return after about 10 years.  Instead of distributing the quarterly cash distributions, they are reinvesting it in the deal to continue to scale to bigger projects.  Looks to good to be true, but I'm interested in some thoughts from the experienced syndicators!


     32x in ten years. Ok.... Ask them for a track record verification report from an auditing firm showing someone like a big 4 company has verified this is their track record.

    Let me guess, some tech guy who made money last few years in phoenix because even homeless people made $ in real estate during that time.

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    2y

    @Cody Ellis, like Chris and you, I would be very skeptical.  That is a VC level return, not a real estate return.  And let's think about a few things: rents in Phoenix are some of the fastest falling rents in country.  Construction costs are rising every minute.  

    What are they redeploying into? And how much cash are they thinking they will have to redeploy and how quickly?  

    At the end of the day, they are going to, on average, triple your money every year. If that were true, you would have very seasoned developers bidding up the property to bring it into something more reasonable for development returns, like 3-4x over 10 yrs.

    I am not trying to say this isn't some home run deal, but like you said, typically things that are too good to be true, are not true.

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