Syndications with BAM, Ashcroft, and/or Praxis
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y@Jim Pfeifer
And since BP doesn’t like self promotion and Jim is very humble - he runs a group called left field investors which I can brag about since it’s not my group
Strongly recommend those who invest passively to give it a look.
Tons of great content, people and information
7e investments53 Reviews
41 Replies
- 2yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
I've personally spoken with Ivan Barratt. He seems a straight shooter and has a good track record. I have not invested with him.
There is a huge difference between investing in a property-specific investment vs. a fund. I like knowing exactly which asset I'm buying because you can do your own due diligence on the submarket and the property. If it is in a hot area, you are more likely to see growth.
I'm not a huge fan of funds. You are basically putting your faith in the manager and are blind to the property selection. Also, I've seen situations where syndicators have raised monies in a fund and have cash burning a hole in their pocket. The more money they have, the more aggressive they get with their offers because they NEED to get those funds deployed.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes2y
@Joseph S., to clarify Greg's comment: with Ashcroft's Fund 3, the three assets identified are the only deals in that Fund, so like Greg noted, if you are the type that wants to do a deep dive into the properties you are investing in, you can do so, at this point, on Fund 3.
Beyond that, I worked for Ashcroft and they have a great group of people there. I have investments with them currently, that I am generally happy with. The team there, from the top down, is responsive. They are always looking at ways to improve their operations: being vertically integrated (as is BAM), but they go above just managing their own properties to actually procuring many of the finishes for their renovations direct from manufacturers.
I have never invested with BAM. I know a few employees there (great people), and have spoken with many people that have invested with BAM. Overall, I would say the reviews amongst the two are very similar from those I have spoken to.
The biggest driver I would say, assuming you are only looking to do one investment: would you rather have one property or three? Would you rather be in the midwest or SE? I know Fund 3 has 2 fixed rate loans and one floating, but I would confirm the loan structure on the BAM asset, since the financing structure is the biggest driver to all the turmoil you are currently hearing about in the multifamily space.
- 2yArn CenedellaPro MemberRental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
All three firms listed are well established large firms with good track records.
As with prettY much all commercial real estate firms and investments, future returns may not match the BOOM period - the golden age of MF - from say 2018 to 2022. That being said, solid returns can still be earned in this space. Investors just need to adjust expectations a tad.
We have similar investment perspectives - long term equity growth over cash flow.
We are currently acquiring small new build multifamily BTR projects that fit perfectly with a long term net worth growth mindset.
- 2yDanny RandazzoPro MemberApartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
@Joseph Smith you should get familiar with market fundamentals that drive long term growth if that’s your goal. Job growth, population growth, markets that have had rent growth over the last several years and projected to have continued rent growth. The location and quality of the community will be very important if your goal is long term value. The southeast US has these fundamentals.
Hey @Joseph S., Ive replied to similar posts a few times int he past and am a current investor with two of your three mentioned (although I didnt invest with the third, I do have some experiences with them as well).
A couple others have pointed out some differences, I appreciate those insights but would also look at the structure and reporting. My wife and I no longer actively operate our own portfolio and took the LP route... to that point, give liquidity a consideration as well. I use a mix of qualified and nonqualified monies, map out what liquidity looks like and what life events might drive that need. If you are in a closed-end fund and relying on "pref", "Class A" or other distribution type you may be in for a rude awakening with some operators (again, the devil is in the details, aka the OM/PPM). What is YOUR exit timeframe and strategy (not the funds)? From what I know, all the three operators (currently) are closed ended funds.... you are along for the full ride (just like me), so your going to be there awhile till they close it down. I also invest in some evergreen funds... this allows ME to exit at my leisure (with some notice), and the underlying assets can be a mix of things... multifamily, development, debt - pick your fund objectives and commit.
I know Praxis has a smaller debt fund (although I didnt like the returns or overall size), Ive chosen to stick with Brian's closed end Fund III. BAM has some interesting things on the roadmap that really have my interest (speak directly with them), but for now I have a stake in Fund II, I also do a larger amount with DLP Capital - but rarely hear them mentioned on BP.... take a look!
I mentioned reporting - this is where you are seeing how the sausage is made (or no, and just get to see the finished product). I would als for quarterly & EoY reports from the past, know what your monthly/quarterly reports look like (in advance), adn what platform is it delivered from. Nothing is a 'standard' here.... its all private equity, so know who your going to get married to! (hint, your better darn well like them.... its going to be a few years till you go different directions). Lastly, listen to whats NOT being said, and from whom. There are a lot of people pushing their own funds, and thats okay if this is where you like to invest. My buy-box just happens to filter out a LOT of noise and doesn't leave too many operators to work with, hence were seeking 1) experience, 2) size, adn 3) AUM or the ability to weather bad times.
Best to you navigating this... guess that why its "accredited investors only"!- 2yJim PfeiferBusiness MemberInvestor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
Lots of great replies here! I have invested with all three of the operators you mentioned, though for me, it's too early to tell the true result. I think all three are high quality operators based on my experience with them thus far.
One of the important points that many people miss when they first learn about syndications, as @Matt A. mentioned is liquidly. Syndications are long-term, illiquid investments that are completely out of your control. The operator is the most important part of the evaluation when you are deciding on an investment, but you also need to think about when you will need your capital back - this is something that new investors often forget as they are excited to get going into investing in syndications.
The best way I have found to find quality operators and get educated about syndications is to join a Community. BP is fantastic, but it really is more focused on active real estate and there are quite a few quality Communities who focus exclusively on syndication investments. These are great places to go to learn and meet like-minded investors.
Good luck!
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@Jim Pfeifer
And since BP doesn’t like self promotion and Jim is very humble - he runs a group called left field investors which I can brag about since it’s not my group
Strongly recommend those who invest passively to give it a look.
Tons of great content, people and information
7e investments53 Reviews Thanks @Chris Seveney and @Jim Pfeifer... To be clear I very much want to get paid for my illiquidity as I don't need money back in the near term. But this form that Jim runs is exactly what I'm looking for. BP is a little too broad I think for the niche I'm trying to research.
- Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes2y
The reason those investor accounts are out dated because many operators get more institutional... when they go over 2-4B in AUM... higher splits and fees means less ROI for LPs... the trade off is reliability in terms of counter party risk (stealing your money). However some big institutions use a net zero reversion cap rate, assuming they're selling into a stronger market as opposed to increasing it by 0.5%-1.0%. I remember attending this real estate conference without the usual YouTube influencers and real estate fake gurus. I asked a bunch of institutional operators about their strategies. Their answers were surprising. Most people in Sub 2B in AUM expect the market to dip slightly and use a reversion cap rate of about half a percent.
Take late 2023, for example. We saw cap rates accelerate. Phoenix, Arizona, is a perfect case. Cap rates there jumped from 3.5% to 6.5%, even 7%. That's a 30-40% drop in market value. It all boils down to how commercial real estate works: your net operating income divided by the cap rate determines your property's value. Let me break it down: A property with a net operating income of half a million, at a 3.5% cap rate, is worth around 14 million. But at a 6% cap rate? It's only worth about 8.3 million. That's a huge loss.
This is why your investment model needs to account for cap rate changes. If it doesn't, you're in trouble when rates spike. And that's exactly what happened last year. Diversifying over different time lengths is key to handling these swings. High cap rates are rare, but they do happen. As a passive investor, you've got to weigh the risk and reward.
Operators usually evolve (less in favor for LP). They either go institutional, tapping into large, passive sources of capital, or they change asset classes. For the smaller LP investor, finding the right operator is crucial but if you net worth is under 4M (what I call endgame status) then I would try to find a less institutional operator.
@Joseph Smith I’ve invested (and remain invested) in all 3 and things were obviously great when markets were strong. Over the past two years my sentiment has changed.
I trust Praxis the most as they pivoted to debt well before everyone else and stopped acquiring when everyone else kept buying. I appreciate that Ashcroft eventually stopped taking management fees after they stopped making distributions. I’ll reserve final judgment when all the deals exit, but for now I feel that I’m waiting for shoes to drop.
I suppose it’ll be a race to see if interest rates decline before pre-2022 syndications run out of liquidity. We’ll see if the equity multiple on those deals are even greater than 1.
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes2y
Quote from @Lane Kawaoka:
The reason those investor accounts are out dated because many operators get more institutional... when they go over 2-4B in AUM... higher splits and fees means less ROI for LPs... the trade off is reliability in terms of counter party risk (stealing your money). However some big institutions use a net zero reversion cap rate, assuming they're selling into a stronger market as opposed to increasing it by 0.5%-1.0%. I remember attending this real estate conference without the usual YouTube influencers and real estate fake gurus. I asked a bunch of institutional operators about their strategies. Their answers were surprising. Most people in Sub 2B in AUM expect the market to dip slightly and use a reversion cap rate of about half a percent.
Take late 2023, for example. We saw cap rates accelerate. Phoenix, Arizona, is a perfect case. Cap rates there jumped from 3.5% to 6.5%, even 7%. That's a 30-40% drop in market value. It all boils down to how commercial real estate works: your net operating income divided by the cap rate determines your property's value. Let me break it down: A property with a net operating income of half a million, at a 3.5% cap rate, is worth around 14 million. But at a 6% cap rate? It's only worth about 8.3 million. That's a huge loss.
This is why your investment model needs to account for cap rate changes. If it doesn't, you're in trouble when rates spike. And that's exactly what happened last year. Diversifying over different time lengths is key to handling these swings. High cap rates are rare, but they do happen. As a passive investor, you've got to weigh the risk and reward.
Operators usually evolve (less in favor for LP). They either go institutional, tapping into large, passive sources of capital, or they change asset classes. For the smaller LP investor, finding the right operator is crucial but if you net worth is under 4M (what I call endgame status) then I would try to find a less institutional operator.
@Lane Kawaoka that is very insightful. Who would you call "less institutional syndicators". would BAM, Praxis and Ashcroft fit that tag?
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes2y
@Pretty Khare, I am going to slightly vary from Lane's take. Moving "institutional" does not mandate higher splits and fees. In fact, when groups are going into true institutional capital sources, their fees and splits are often lower than the "typical" syndicator you will see on these forums.
Where I do see fees and splits become more GP friendly is with groups with long and strong track records. To me personally, this is a balance. The longer a group has been around, the more they have learned, the more they can bring to the table. While the overall returns (all else being equal) to the LP are lower when the sponsor gets higher fees and carried interest, you are paying for a certain level of de-risking your investment. That being said, I know BAM and Ashcroft self manage their priorities. They run their own construction companies. They control a lot more of the overall equation than a smaller group that is outsourcing it all. I could go on and on about this topic, and feel free to message me if you want more insights.
As for specific groups that would be under that $2bn mark that Lane mentioned, there are a lot of them. I am talking hundreds and hundreds. Hop on LinkedIn and search for #passiveincome #multifamilyinvesting #mailboxmoney, etc and you will be flooded with people offering advice on how to create passive income through real estate, nearly all of whom run startup syndications. I would caution you though, many groups you will find are run by people who likely hadn't even graduated high school when the financial crisis hit, and many have only been in real estate the last couple years. You need to balance your risk tolerance of someone who very well may have no idea what they are doing with their projected returns. Sometimes the projected returns are lower, NOT because of fees and carry, but because the sponsor is derisking the deal in several other ways.
- Investor · Saint Louis, MO · Member since 2013 · 24 posts · 21 votes2y
Some good replies here and experiences that I share. This is an interesting time in this space because of the difficulty from the jump in rates. I have invested with Praxis but that was a new home construction fund and it was ho hum, underperforming my expectations, but made money nonetheless. I have gone full cycle with Ashcroft and also currently have 3 deals with them. All 3 deals have currently paused distributions due to floating interest rate debt and looming debt maturities. They do provide monthly updates and of course I hope it goes well at the end of the day but there is really no way to know for sure exactly how safe my investments are. On one hand I agree with the conservative strategy of pausing distributions but I have no real way of assessing the risk of my capital. I'm fine with the lack of liquidity as that's what I signed up for and I don't need the capital tomorrow but I absolutely need it at some point. The point is that as an LP there is going to be a level of knowledge of performance that you just won't know. We'll see how the next couple years go.
- Member since 2025 · 6 posts · 2 votes1y
Ashcroft ruined my financial life. That is all I can say. Greed....
@Joseph S. I've been in syndicated deals with both Praxis and Ashcroft over the past several years, and I would take Praxis head and shoulders over Ashcroft. Brian Burke at Praxis is much savvier and smarter than Joe Fairless and Frank Roessler when is comes to leading a syndication, managing risk, and underwriting deals. Comparing Praxis to Ashcroft is like comparing the LA Lakers to a local high school team. They're in completely different leagues.
@Evan Polaski you and I spoke about 5 years ago back when you worked at Ashcroft and you helped convince me to invest in AVAF1. That fund has performed very poorly and could result in 100% loss of LP capital, but I do take ownership of my mistake for trusting Joe and Frank with my hard earned money as that was ultimately my decision. They had much less foresight than many other syndicators unfortunately.
I'm curious what your thoughts are on Ashcroft at this point? Are you still happy with how your Ashcroft investments are performing?
- Member since 2025 · 6 posts · 2 votes9mo
Quote from @Ben D.:
@Joseph S. I've been in syndicated deals with both Praxis and Ashcroft over the past several years, and I would take Praxis head and shoulders over Ashcroft. Brian Burke at Praxis is much savvier and smarter than Joe Fairless and Frank Roessler when is comes to leading a syndication, managing risk, and underwriting deals. Comparing Praxis to Ashcroft is like comparing the LA Lakers to a local high school team. They're in completely different leagues.
@Evan Polaski you and I spoke about 5 years ago back when you worked at Ashcroft and you helped convince me to invest in AVAF1. That fund has performed very poorly and could result in 100% loss of LP capital, but I do take ownership of my mistake for trusting Joe and Frank with my hard earned money as that was ultimately my decision. They had much less foresight than many other syndicators unfortunately.
I'm curious what your thoughts are on Ashcroft at this point? Are you still happy with how your Ashcroft investments are performing?
@Ben D. Thanks for engaging in this thread and sharing your experience. I'm now a lot more experienced in the syndicated space, and am curious if your opinion on Praxis and Ashcroft is purely results-oriented (ie. your Praxis investment did well and your Ashcroft did not) or if there were clear distinctions in their processes, strategies, execution, etc.?
I will let @Evan Polaski speak for his own situation, but I've gotten to know him a little over the last couple of years and found him to be a true knowledgeable professional. It's very humble of you to take ownership for own investment decision but I completely understand how frustrating that can be.
@Joseph S. great question, and I'm happy to engage in the thread. Thank you for starting a lively discussion!
To me, the differences between Ashcroft any Praxis are not limited to results. It is ultimately about understanding and managing risk, and having the foresight to protect investors' money in the event markets change.
Ashcroft was acquiring assets with 80% LTV in very high growth markets with variable rate debt, short-term interest rate caps, and short duration loans. That strategy worked extremely well while rates were very low and rents continued to escalate quickly. As soon as that environment changed (interest rates increased, housing supply increased, etc), those investments got burned badly and LP capital was left exposed. Praxis is significantly more experienced and has been through many market downturns, and it shows in terms of how they manage risk. They have LTVs closer to 60% and longer term loans. Ashcroft had a static view of the market, whereas Praxis' view is dynamic.
Praxis' investor materials and communication is also far superior to Ashcroft's.
I do agree with you that @Evan Polaski is very professional. It's an unfortunate situation over at Ashcroft right now with many LPs already experiencing 100% losses with more big losses coming up on the horizon. There's an excellent thread discussing Ashcroft over at Wall Street Oasis if you haven't read it: https://www.wallstreetoasis.com/forum/real-estate/another-on...
Evan happened to be raising funds for those deals, but Evan is not responsible for their failures. That responsibility ultimately lies with Joe and Frank.
- 9moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Ben D. As someone who invested with both Ashcroft and Praxis syndications curious to get your take on how the two opportunities compared at the initial diligence phase before an investment was made. What was the projected return metrics included in both pitch decks? How did the projected timelines compare between the two offerings?
You mentioned Ashcroft focused on higher-growth markets. How did that differ from the markets and assets Praxis was acquiring, and how was that difference reflected in the projected returns?
You mentioned Ashcroft utilized 80% leverage whereas Praxis was closer to 60%. Were the financing structures clearly laid out in the sources and uses for each deal (debt terms & leverage) and did the actual funding match what was laid out in the preliminary materials you relied upon?Most performance differences trace back to these front-end expectations assumptions rather than anything that only becomes clear after the fact.
Quote from @Stuart Udis:
@Ben D. As someone who invested with both Ashcroft and Praxis syndications curious to get your take on how the two opportunities compared at the initial diligence phase before an investment was made. What was the projected return metrics included in both pitch decks? How did the projected timelines compare between the two offerings?
You mentioned Ashcroft focused on higher-growth markets. How did that differ from the markets and assets Praxis was acquiring, and how was that difference reflected in the projected returns?
You mentioned Ashcroft utilized 80% leverage whereas Praxis was closer to 60%. Were the financing structures clearly laid out in the sources and uses for each deal (debt terms & leverage) and did the actual funding match what was laid out in the preliminary materials you relied upon?Most performance differences trace back to these front-end expectations assumptions rather than anything that only becomes clear after the fact.
The debt structure and key features of each deal were very much clearly laid out in the investor materials. The LTV, markets, timeline, projected metrics, etc. were all laid out in a transparent way, and I didn't feel misled by any of it. I wasn't trying to imply that I was misled, so hopefully you didn't get that impression from my post.
At this point, I've invested with four different syndicators and I've invested in multiple deals with some of them. All of the deals closed between 2021 - 2025.
Two of the deals that I'm in are Ashcroft's AVAF1 and Praxis' Multi-Family Fund VII, which both closed in late 2021 and have assets that are in comparable markets. The performance of the Praxis fund has been much better - I'm currently receiving quarterly distributions, and there have been no capital calls. All indications are that I'll receive my invested capital back with some return on top of that.
You may also be invested in Ashcroft's AVAF1, which is a distressed deal. There have been two capital calls, distributions are suspended, and there's a high risk of 100% loss of LP capital.@Joseph S. initial post was asking about investor experiences with Praxis and Ashcroft, and as someone who invested in deals with both firms in multi-family funds that closed at the same time and in very comparable markets, my experience is that Praxis manages risk much better and communicates much better than Ashcroft. Praxis is more experienced, savvier, and I sleep well at night knowing that my money is with Brian Burke and team. My overall experience with Praxis has been extremely positive, whereas I've been dissatisfied with Ashcroft and am not an outlier in feeling that way. You may already be aware, but there's quite a lot of negative investor feedback popping up on InvestClearly, Reddit, and Wall Street Oasis re: Ashcroft as they have many distressed deals with some LPs already losing 100% of their invested capital.
At the same time, I don't feel like I was misled by Ashcroft's initial investor materials. I did decide to invest in a fund with a high LTV in high growth markets and variable rate debt, and that is ultimately my mistake for investing in their fund and I take 100% ownership of that investing mistake.
I think @Stuart Udis is being a little gentle here, but I think what he is ultimately doing is questioning the statement @Ben D. made that "The responsibility ultimately lies with Joe and Frank." I think Stuart is rightly insinuating that absent material misrepresentations or omissions, limited partner investors must also take on some of the ultimate responsibility for the failure of these investments.
In another scenario, taking on more leverage with floating rate debt in the sunbelt markets may have very well led to superior results. In this particular situation it didn't. I as an investor may decide that based on my risk appetite and risk tolerance, I want to pursue higher IRR riskier development deals that use high leverage. If I decide that, then just as I will be excited if the deals do end up delivering IRRs north of 20%, I also can't entirely blame the sponsor if some of the clearly present risks at inception materialize.
Quote from @Joseph S.:
I think @Stuart Udis is being a little gentle here, but I think what he is ultimately doing is questioning the statement made that "The responsibility ultimately lies with Joe and Frank." I think Stuart is rightly insinuating that absent material misrepresentations or omissions, limited partner investors must also take on some of the ultimate responsibility for the failure of these investments.
In another scenario, taking on more leverage with floating rate debt in the sunbelt markets may have very well led to superior results. In this particular situation it didn't. I as an investor may decide that based on my risk appetite and risk tolerance, I want to pursue higher IRR riskier development deals that use high leverage. If I decide that, then just as I will be excited if the deals do end up delivering IRRs north of 20%, I also can't entirely blame the sponsor if some of the clearly present risks at inception materialize.
@Joseph S. I would like to try and clarify here as it sounds like there may be some miscommunication:
The person responsible for my own investing decisions is me. I made the decision to invest in deals with Ashcroft which are now performing very poorly, and I take 100% ownership of those decisions. In hindsight, those investing decisions were a mistake, and that's entirely my responsibility.
The person who is responsible for the success and failure of the Ashcroft funds is Joe and Frank (the founders/ owners of Ashcroft). They did raise $100M in LP capital for AVAF1. If those LPs experience a 100% loss of their invested capital, which is a clear possibility, that is most certainly a failure of Joe and Frank's. In that scenario, they would have taken $100M of investor money and turned it into $0. To be clear, I am not an employee of Ashcroft and an not involved in the management of these funds.
Hopefully that makes sense what I'm trying to say?
@Ben D.Yes what you are saying makes sense!
I think I just feel more comfortable coming down hard on a sponsor when their efforts, ethics, or decision-making after closing on a property fell far short of expectations. In the Ashcroft case, it seems like their biggest failure was taking on high-leverage bridge debt, which clearly in retrospect was a bad decision. But it was a decision that all parties involved knew (or could have known) at the time the investment was made. This to me is a little bit less blame worthy than other deals that have failed because the operator failed to execute on a business plan.
- 9moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
I will add that my knowledge of both Praxis and Ashcroft's business operations do not extend beyond what I've read in these forums. @Ben D. The one item you didn't answer was how the projected returns differed. I assume the Ashcroft projections were presented favorable if by your own admission the assets were comparable and going in you were aware of how Praxis was utilizing a more conservative debt structure. Why would anyone invest in the known riskier investment strategy without the chance at higher upside? Risk and reward travel together.
Some syndicators used riskier debt structures and can't speculate to the reason as different sponsors may have had different decision processes. I've heard from some who swung for the fences because that's how they presented projected returns that differentiated them from other investment opportunities, others were in the business of transacting and had to find deals that could work to keep the lights on and keep the fee machine running, others struggled to raise equity and were forced into higher leverage debt to fill the capital stack along with a ton of other reasons why a sponsor may have elected to go with the riskier debt structures.
Just as sponsors made decisions on why to utilize riskier debt structures, LP's made the conscientious decision to invest in syndications knowing the heightened risks. It's easy to point the finger at the sponsor midway through the investment cycle when the project is underperforming and suggest they didn't manage risk well or underwrote the deal poorly but you mentioned $100M of equity decided to invest in their business plan. Now I will be the first to concede a significant portion of that equity likely didn't even know the debt structure...not because it wasn't provided (by your own admission it was). Instead, because most LP's or passive real estate investors are not educated enough to scrutinize these investment opportunities.However, for anyone who understood the debt structure (especially those who simultaneously invested in other syndications with more conservative underwriting and understood how both investment opportunities utilized debt differently), I don't believe it's fair to suggest the sponsor failed to manage the risk or underwrote the deal poorly. That's because you were one of the LP's who actually agreed with the business plan and decided to invest.
Quote from @Stuart Udis:
I will add that my knowledge of both Praxis and Ashcroft's business operations do not extend beyond what I've read in these forums. @Ben D. The one item you didn't answer was how the projected returns differed. I assume the Ashcroft projections were presented favorable if by your own admission the assets were comparable and going in you were aware of how Praxis was utilizing a more conservative debt structure. Why would anyone invest in the known riskier investment strategy without the chance at higher upside? Risk and reward travel together.
Some syndicators used riskier debt structures and can't speculate to the reason as different sponsors may have had different decision processes. I've heard from some who swung for the fences because that's how they presented projected returns that differentiated them from other investment opportunities, others were in the business of transacting and had to find deals that could work to keep the lights on and keep the fee machine running, others struggled to raise equity and were forced into higher leverage debt to fill the capital stack along with a ton of other reasons why a sponsor may have elected to go with the riskier debt structures.
Just as sponsors made decisions on why to utilize riskier debt structures, LP's made the conscientious decision to invest in syndications knowing the heightened risks. It's easy to point the finger at the sponsor midway through the investment cycle when the project is underperforming and suggest they didn't manage risk well or underwrote the deal poorly but you mentioned $100M of equity decided to invest in their business plan. Now I will be the first to concede a significant portion of that equity likely didn't even know the debt structure...not because it wasn't provided (by your own admission it was). Instead, because most LP's or passive real estate investors are not educated enough to scrutinize these investment opportunities.However, for anyone who understood the debt structure (especially those who simultaneously invested in other syndications with more conservative underwriting and understood how both investment opportunities utilized debt differently), I don't believe it's fair to suggest the sponsor failed to manage the risk or underwrote the deal poorly. That's because you were one of the LP's who actually agreed with the business plan and decided to invest.
@Stuart Udis - I appreciate you engaging in dialogue on this!
I believe the only area where we may disagree is re: whether Ashcroft effectively managed risk in their AVAF1 fund. Ashcroft has been open about the fact that if they were to sell all remaining fund properties in today's environment, the Class B investors would experience a 100% loss on their investment. Meaning that many individual investors who each invested hundreds of thousands or millions of dollars in the fund would experience a total loss of their investment. This is of course a catastrophic outcome for those individuals who trusted Ashcroft with their hard earned savings.
In my own personal opinion, if LP investors experience a 100% loss of invested capital, that is indicated of poor risk management by the GP. I understand that you may disagree with that, and I am fully supportive of you having that opinion, even though it does differ from my own.
- 9moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Ben D. You are sidestepping the core question, which is how the return projections differed between Praxis and Ashcroft. Given what you have acknowledged about knowing Ashcroft was utilizing higher leverage and more aggressive banking terms the only logical assumption is that Ashcroft’s projected returns were higher. No rational investor allocates capital to the same asset class in the same period while accepting more risk unless they expect a better performance.
You mention the sponsors did not manage risk, but it's the same risk you personally bet on, right? In an earlier post you took responsibility for making the investment, but you stop short of taking accountability for betting on the higher risk debt structure your investment decision relied upon and the same plan Ashcroft seemingly executed. That's where the risk management seemed to have gone awry from what I am hearing. Not some pivot that occurred after the investment was made. That's the disconnect I am struggling to understand. I will give the uninformed Ashcroft LP's a pass (and I am sure there's quite a few), but you don't fit that box because of your understanding of the investment you chose to make.
I am invested in praxis current offering which is managed care/nursing home based. Too early to have any confidence in the performance but Brian has a great reputation. He also chose to stop acquiring when the market had a lot of uncertainty that seems to have been a great decision.
There is no doubt that the population is aging. Offerings that leverage an aging populace does not require a crystal ball to have belief that it will outperform many/most other segments.
BP has passive pockets. I am a member but have not found the site to be easy to use. I suspect I have not visited the site in 6 months and may not continue my subscription. However, if you have BP pro, it is a very reasonably cost for syndication research site. Maybe more members will improve the site.
Good luck
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes9mo
Quote from @Dan H.:
I am invested in praxis current offering which is managed care/nursing home based. Too early to have any confidence in the performance but Brian has a great reputation. He also chose to stop acquiring when the market had a lot of uncertainty that seems to have been a great decision.
There is no doubt that the population is aging. Offerings that leverage an aging populace does not require a crystal ball to have belief that it will outperform many/most other segments.
BP has passive pockets. I am a member but have not found the site to be easy to use. I suspect I have not visited the site in 6 months and may not continue my subscription. However, if you have BP pro, it is a very reasonably cost for syndication research site. Maybe more members will improve the site.
Good luck
If Brian has the operations down, the assisted living can do well. If that struggles, then belly up they go. We own nearly 400 beds in MN and WI. There are a ton of nuances to the business. Private pay and public pay rates vary greatly depending on the state and level of care. Staffing is a big issue and expense, and regulations can be difficult to navigate. There is so much more to the business other than the "Silver Tsunami."
- Investor · Hendersonville, NC · Member since 2013 · 757 posts · 282 votes7moTotally get ya here. However, it is worth noting that the Praxis fund is all NNN leases, so it's not Brian doing the operations, it's the operator Praxis chooses to partner with/lease to.
Quote from @Todd Dexheimer:
Quote from @Dan H.:
I am invested in praxis current offering which is managed care/nursing home based. Too early to have any confidence in the performance but Brian has a great reputation. He also chose to stop acquiring when the market had a lot of uncertainty that seems to have been a great decision.
There is no doubt that the population is aging. Offerings that leverage an aging populace does not require a crystal ball to have belief that it will outperform many/most other segments.
BP has passive pockets. I am a member but have not found the site to be easy to use. I suspect I have not visited the site in 6 months and may not continue my subscription. However, if you have BP pro, it is a very reasonably cost for syndication research site. Maybe more members will improve the site.
Good luck
If Brian has the operations down, the assisted living can do well. If that struggles, then belly up they go. We own nearly 400 beds in MN and WI. There are a ton of nuances to the business. Private pay and public pay rates vary greatly depending on the state and level of care. Staffing is a big issue and expense, and regulations can be difficult to navigate. There is so much more to the business other than the "Silver Tsunami."
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes7mo
Quote from @Jason Merchey:
Totally get ya here. However, it is worth noting that the Praxis fund is all NNN leases, so it's not Brian doing the operations, it's the operator Praxis chooses to partner with/lease to.Quote from @Todd Dexheimer:
Quote from @Dan H.:
I am invested in praxis current offering which is managed care/nursing home based. Too early to have any confidence in the performance but Brian has a great reputation. He also chose to stop acquiring when the market had a lot of uncertainty that seems to have been a great decision.
There is no doubt that the population is aging. Offerings that leverage an aging populace does not require a crystal ball to have belief that it will outperform many/most other segments.
BP has passive pockets. I am a member but have not found the site to be easy to use. I suspect I have not visited the site in 6 months and may not continue my subscription. However, if you have BP pro, it is a very reasonably cost for syndication research site. Maybe more members will improve the site.
Good luck
If Brian has the operations down, the assisted living can do well. If that struggles, then belly up they go. We own nearly 400 beds in MN and WI. There are a ton of nuances to the business. Private pay and public pay rates vary greatly depending on the state and level of care. Staffing is a big issue and expense, and regulations can be difficult to navigate. There is so much more to the business other than the "Silver Tsunami."
In that case, he is not investing in assisted living; he is investing in a commercial space. The AL operator is his tenant, similar to a daycare, restaurant, liquor store, etc being his tenant. If it's a NNN, then his profit only relies on the tenant's ability to pay. Much less risk (with a strong tenant), but also very little upside.
@Todd Dexheimer This is not terribly insightful, as you are essentially saying if Brian does well the investment will do well and if he doesn't do well the investment will not do well.
Have you looked at the actual assets he bought and do you have an opinion on their merits? Do you have an opinion on the senior housing veteran he is teaming up with who apparently is an expert in the space?
Also, do you really see this as a binary result or are there a lot of gradations in between?
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes9mo
Quote from @Joseph S.:
@Todd Dexheimer This is not terribly insightful, as you are essentially saying if Brian does well the investment will do well and if he doesn't do well the investment will not do well.
Have you looked at the actual assets he bought and do you have an opinion on their merits? Do you have an opinion on the senior housing veteran he is teaming up with who apparently is an expert in the space?
Also, do you really see this as a binary result or are there a lot of gradations in between?
Well, it should be very insightful. Assisted living is subject to the operating business success. In traditional commercial real estate, the building value is determined by the business operations, but nothing like assisted living. I have nearly 400 beds, which ends up meaning I have a business with nearly 300 employees. The success of the assisted living properties isn't due to timing the market, time in the market, cap rate compression, etc. The success is solely based on operational success. It's a business through and through - not real estate, and a lot of people are jumping into the space, not understanding that.
As for Brian - I have not looked at his assisted living or his partner. If his partner has owned and operated these assets successfully and they are managing them in-house, then he will likely do well (see above)
Also, do you really see this as a binary result or are there a lot of gradations in between? I am not sure what you are asking here.
- Member since 2025 · 6 posts · 2 votes9mo
I will never invest with Ashcroft Capital gain. My future is screwed. I will have to work for the rest of my life because of them.
Quote from @Jon Gardner:
I will never invest with Ashcroft Capital gain. My future is screwed. I will have to work for the rest of my life because of them.
Jon this seems a little extreme. Can you explain how they are fully at fault for your financial future?
Quote from @Jon Gardner:
I will never invest with Ashcroft Capital gain. My future is screwed. I will have to work for the rest of my life because of them.
I am so sorry, my friend. I have also lost significant capital from investing with Ashcroft, and I deeply regret those investments. Sorry to hear that happened to you.
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