Realistic Returns For Multifamily Syndication Investments
Lititz, PA · Member since 2013 · 595 posts · 272 votes
Realistic Returns For Multifamily Syndication Investments
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank you
Realistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.
27 Replies
- 2yArn CenedellaPro MemberRental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
The returns you mention WERE fairly standard returns for MF syndications before say 2023.
$100K turning into $200K total is a 2.0x Equity Multiple.
$100K of that $200K is returning the original $100K investment.
So $100K is “profit” or “income”.
The $100K income will come from total investor distributions over the 5 year hold plus a shares of the profits due to an increase in value.
Typical might be average $6,000 a year in distributions a total of $30,000 with the balance of $70,000 from increase in value.
So you might look at that breakdown, the more cash flow the less appreciation dependent the deal is.
Also look at exit cap which is used to determine exit sales price. Should be 6% or higher.
At the present time, Spark is presenting lower risk acquisition of completed new build MF (so not involved in construction no construction risk). We buy when the buildings are finished and certificates of occupancy are issued.
At the present time we are projecting a 1.8X Equity Multiple. Invest $100K get back $180K.
These are NEW builds so no value add risk or major cap ex expense. Long term fixed rate debt with low leverage 55% LTV.
Returns should track risk.
New ground up development should offer higher returns but lower probability of success. Same with heavy value add.
Hope this helps.
Arn
- 2yAndrew FreedBusiness MemberInvestor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
@William Coet - In today's environment, I'd say around a 15% annualized return or a 1.8x equity multiple. This is taking into account all of the upside of the real estate investment including cash flow, refinance funds and potential funds from selling the property. Normally, a majority of the return stems from either the refinance or sale of the property. This is assuming a standard value add multifamily property. Other asset classes provide different return profiles including class A or new construction. I hope this helps!
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@William Coet
There are so many factors that go into this including location, asset class, true operator experience, amount of debt financing….
Recently we have seen deals where $100k turned into a $98k loss and where $100k had a 1.8x multiple.
As mentioned higher risk = higher return. If it was unlevered it would probably be a multiple of 1.4 - 1.5 but significantly less risk, with leverage it goes up but it’s also more volatile.
7e investments53 Reviews - 2yArn CenedellaPro MemberRental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
Agreed. I would rather under promise and over deliver than vice versa. The thing with long term hold approach, there is generally a real boom that last 2 or 3 years every 7 to 10 years. So if you hold long term you will probablY catch the wave and reap higher rewards than anticipated.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes2y
@William Coet, realistic is anyone's guess. Will the Fed slash rates this year? Will rates go to 8% by 2027? Will rents start falling as we see businesses downsize due to rate increases? Will demand for multifamily wane as housing prices see a precipitous decline?
These are all guesses made by me, you and the sponsor you are assessing.
But more direct to the deal: how much debt are they using? What is their true in-place cap rate, interest rate, DSCR? How much return are they projecting from cash flow versus appreciation? What is their projected exit cap rate on the deal?
Prices have generally come down about 30-40% for most institutional class b multifamily assets, since the peak. There is some consensus amongst major owners/operators that prices are very near the bottom (maybe this is positive thinking, but this group also sets the market by being the major buyers and sellers). So if the market rebounds even a bit with rates coming down, I think the 2x EM in 5 yrs is reasonable. I would not call it overly conservative, but I also wouldn't call it super aggressive, but again it really gets into your views and the syndicator's views of where the market is headed over the next 3-5 yrs.
Personally, I take the view that any experienced syndicator that is underwriting to 5 years, given what has transpired over the last 5 is simply not learning any lessons. Or, every syndicator, even if the plan is a 5 yr hold, should have the 10 yr proforma completed as a "sensitivity analysis". What happens to capex budget? What happens to cash flow if the 10yr fixed rate loan with 5 yrs IO goes amortizing?
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Evan Polaski:
@William Coet, realistic is anyone's guess. Will the Fed slash rates this year? Will rates go to 8% by 2027? Will rents start falling as we see businesses downsize due to rate increases? Will demand for multifamily wane as housing prices see a precipitous decline?
These are all guesses made by me, you and the sponsor you are assessing.
But more direct to the deal: how much debt are they using? What is their true in-place cap rate, interest rate, DSCR? How much return are they projecting from cash flow versus appreciation? What is their projected exit cap rate on the deal?
Prices have generally come down about 30-40% for most institutional class b multifamily assets, since the peak. There is some consensus amongst major owners/operators that prices are very near the bottom (maybe this is positive thinking, but this group also sets the market by being the major buyers and sellers). So if the market rebounds even a bit with rates coming down, I think the 2x EM in 5 yrs is reasonable. I would not call it overly conservative, but I also wouldn't call it super aggressive, but again it really gets into your views and the syndicator's views of where the market is headed over the next 3-5 yrs.
Personally, I take the view that any experienced syndicator that is underwriting to 5 years, given what has transpired over the last 5 is simply not learning any lessons. Or, every syndicator, even if the plan is a 5 yr hold, should have the 10 yr proforma completed as a "sensitivity analysis". What happens to capex budget? What happens to cash flow if the 10yr fixed rate loan with 5 yrs IO goes amortizing?
in my little bubble in the PNW I am not seeing that kind of price drop at all. where is this happening at geographically. 30 to 40% value drops. - Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes2y
@Jay Hinrichs, the southeast/sunbelt markets from peak to few deals that are trading.
I should have clarified my comment, since it could be viewed several ways. Cap Rates, or relative values have fallen 30-40% from the mid-3% cap rates in the peak of 2021/2022 to mid-5s in 2023.
Absolute dollar values have not fallen that much, as these well located assets continued to see strong rent growth, and assuming the operators were actually able to control expenses, NOI was able to grow fairly well over that same 1.5 - 2 yr period.
- Rental Property Investor · Northville, MI · Member since 2013 · 263 posts · 183 votes2y
As others have noted above, 100% return over 5 years had been a reasonable return expectation for the 10 year period leading up to 2022. When interest rates and interest rate caps surged in '22, the values of MF assets began falling, so deals being sold now in many cases are not delivering that same return. The price decreases are due to both the decreased returns to investors possible at a given price point as the cost of debt financing increases, as well as some dumping of assets due to redemptions (looking at you, Blackstone) and the inability to refinance properties that had been purchased in 2018-2021 with high leverage floating rate debt. When the tide went out, who was and wasn't properly dressed for swimming was exposed. If the operator who has debt maturing in 2023 or 2024 was properly conservative, they can sell and deliver gains albeit lower than in the past, or refinance, continue to pay dividends, and hope to sell in 2025 or later with good capital gains.
For new money going into MF in 2024, there is the possibility to benefit from the financial distress of forced sellers by purchasing good assets in growing markets below the cost of replacement and holding until a fortuitous time to sell, while harvesting ongoing dividends. 2023 and 2024 have been a wakeup call that the operating team must have a long-term hold plan that allows them to hold the property profitably until selling at an advantageous time of their choosing.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Evan Polaski:
@Jay Hinrichs, the southeast/sunbelt markets from peak to few deals that are trading.
I should have clarified my comment, since it could be viewed several ways. Cap Rates, or relative values have fallen 30-40% from the mid-3% cap rates in the peak of 2021/2022 to mid-5s in 2023.
Absolute dollar values have not fallen that much, as these well located assets continued to see strong rent growth, and assuming the operators were actually able to control expenses, NOI was able to grow fairly well over that same 1.5 - 2 yr period.
gothca our market in the PDX area has pretty well tracked 4. 5 to 6.0 cap for the last 3 years i have been shopping.. and thats what you see advertised today.. but cant really make sense of them with 7% money.. so I think the stuff that is trading is mainly cash or 1031 have to move the money.
I looked at a fixer promofrma 7 cap this week.. 4 offers already at full price and going for HB.. so i guess like most stuff you got to find this stuff off market. - 2yAndrew FreedBusiness MemberInvestor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
@Arn Cenedella - Good point and I totally agree, better to under-promise than over-promise. Appreciate your input.
- 2yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @Arn Cenedella:
The returns you mention WERE fairly standard returns for MF syndications before say 2023.
$100K turning into $200K total is a 2.0x Equity Multiple.
$100K of that $200K is returning the original $100K investment.
So $100K is “profit” or “income”.
The $100K income will come from total investor distributions over the 5 year hold plus a shares of the profits due to an increase in value.
Typical might be average $6,000 a year in distributions a total of $30,000 with the balance of $70,000 from increase in value.
So you might look at that breakdown, the more cash flow the less appreciation dependent the deal is.
Also look at exit cap which is used to determine exit sales price. Should be 6% or higher.
At the present time, Spark is presenting lower risk acquisition of completed new build MF (so not involved in construction no construction risk). We buy when the buildings are finished and certificates of occupancy are issued.
At the present time we are projecting a 1.8X Equity Multiple. Invest $100K get back $180K.
These are NEW builds so no value add risk or major cap ex expense. Long term fixed rate debt with low leverage 55% LTV.
Returns should track risk.
New ground up development should offer higher returns but lower probability of success. Same with heavy value add.
Hope this helps.
Arn
how big are the ground up multifamily deals you are buying? We build infill 3 units in Columbus OH and expanding to florida. The price per door, net migrations, rents, etc are all better in sunbelt but columbus is still a great market. florida still has a few small downsides.
Section 8 Launch52 Reviews - Investor · Miami, FL · Member since 2015 · 355 posts · 268 votes2y
I would say it depends on how much that return is from income versus exit. If it's mostly income and the inputs are reasonable then I would feel a lot more comfortable with that than having most of the upside realized upon exit. No one knows what values will be like later this year let alone 5 years from now.
- 2yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
A syndication that's capable of a 100% return in a 5 year period will likely be reliant on a sale and expect the underlying real estate to be a heavy value add or ground up opportunity rather than a cosmetic unit turnover type multi-family syndication. Therefore you should also expect minimal distributions in the early years. I don't see an issue with this return profile, but it would be helpful to better understand the assets involved, redevelopment process that's proposed and the bank leverage to better vet whether the return profile is realistic. It would also make me far more comfortable if the sponsor is a local hands on operator.
Generally speaking these are the red flag syndications (with limited exceptions) I would shy away from. They are also some of the more common syndications being promoted.
1. I generally do not like the open end funds. Especially when the sponsor advertises having raised upwards of 50% the value of assets under management in equity. When I see this and the assets are leveraged at 70-75%, the raised capital is usually being used as distributions and when the money stops coming in, whomever is left will be holding the bag.
2. This is becoming more and more prevalent but similarly shy away from the remote Sponsors who are buying cosmetic upgrade multi-family buildings in the "hot" or "up and coming" markets. They do not have deep rooted relationships or understanding of these markets from years of operations and are reviewing the same opportunities we theoretically could if we were interested. That's part one. The next part is in my opinion more critical.
There are three variables to these remote syndicators underwriting: Assumptions on rent increase, cost of improvements and cost of equity. The debt is going to be underwritten the same as the debt pricing is largely commoditized in this space as is the property management (and if there's any varying differences, they are not moving the needle). Therefore, the syndicator who puts forth the winning bid either has the boldest assumptions on rent growth or cost of renovation or has the lowest cost of capital (equity). Basically they are relying on the best case scenarios on project costs/ rent growth and/or are offering the lowest return profile to their equity relationships. If any of these inputs do not exist, the deal would go to another syndicator unless they are merely chasing fees which is even scarier.
- Real Estate Broker | Investor | Property Manager · Plantation, FL · Member since 2015 · 228 posts · 68 votes2y
Knowledgable operators will underwrite deals and pick only the ones they believe they can achieve close to the 2x EM or above at a 5yr mark. These deals generally DO require a good amount of work or elbow grease to make that happen. The returns are meaningless without documentation and business plan to corroborate the projected return. You have to do your own due diligence to determine if you think the sponsors will be able to come through with their plan or if it is far-fetched.
Different asset classes can do different things. Some may be great options for base annual cashflow. The faster way to accelerate the appreciation is always a value-add type of play. Even if you buy a hotel you want to increase your room rates by maybe converting to a more upscale brand, etc.
Otherwise, look at the investment from a perspective of the basic annual cashflow and then determine if you would be able to gain any significant benefit from the depreciation or other tax benefits of the investment (speak to your CPA on that matter).
Are you looking for wealth generation or wealth preservation?
- 2yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Melanie P. I have to disagree with you. If you are referring to the red flag syndicators I noted in my post earlier this morning then sure, I would similarly share the same level of skepticism. However Sponsors who have skillsets that can add real value to a transaction can and will continue to spearhead investment opportunities that yield those returns. By way of example, I am aware of a Sponsor who created over $1M in imputed equity through the entitlement process and was able to secure bank financing at 88% LTC. That adds tremendous value to the transaction and greatly reduces the LP's equity requirement. Please explain to me how being an accredited investor provides the credentials to put that deal together? That is just one of many examples I can provide of how a good Sponsor can create the returns you believe are impossible.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady. - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Stuart Udis:
@Melanie P. I have to disagree with you. If you are referring to the red flag syndicators I noted in my post earlier this morning then sure, I would similarly share the same level of skepticism. However Sponsors who have skillsets that can add real value to a transaction can and will continue to spearhead investment opportunities that yield those returns. By way of example, I am aware of a Sponsor who created over $1M in imputed equity through the entitlement process and was able to secure bank financing at 88% LTC. That adds tremendous value to the transaction and greatly reduces the LP's equity requirement. Please explain to me how being an accredited investor provides the credentials to put that deal together? That is just one of many examples I can provide of how a good Sponsor can create the returns you believe are impossible.
Stuart,
Dont waste your breath or time on Melanie she obviously must have had a bad experience with a syndicator so she post negative bias on pretty much every single syndicator thread its her life mission and she is not even nice about these days she is just rude and and big Troll. - 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votes
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.Do you tell potential investors they should expect to double their money with you? Is that the standard sales pitch? I always heard when someone asks you for money with promises that are too good to be true you turn around and walk away. Sometimes a wake up call is necessary lest we repeat the same mistake.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.Do you tell potential investors they should expect to double their money with you? Is that the standard sales pitch? I always heard when someone asks you for money with promises that are too good to be true you turn around and walk away. Sometimes a wake up call is necessary lest we repeat the same mistake.
If that's your position and opinion then there is a civil way to get it
across your name calling and such is just so transparent.. And keep in mind many of us double our money all the time in Real Estate ventures.. Closed one yesterday were my return was over 50% apr.. AS well as Flippers I fund 100% who make infinite returns. Just have to know the right folks - 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votes
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.Do you tell potential investors they should expect to double their money with you? Is that the standard sales pitch? I always heard when someone asks you for money with promises that are too good to be true you turn around and walk away. Sometimes a wake up call is necessary lest we repeat the same mistake.
If that's your position and opinion then there is a civil way to get it
across your name calling and such is just so transparent.. And keep in mind many of us double our money all the time in Real Estate ventures.. Closed one yesterday were my return was over 50% apr.. AS well as Flippers I fund 100% who make infinite returns. Just have to know the right folksSure we more than double our money in real estate. I'm specifically writing about doubling money in 5 years as a LP in a syndication deal that you put money into in 2024. There were plenty of syndicators who produced a big return like that (occasionally) in the past. Generally not the ones that needed 30 telemarketers and don't confuse a bull market with intelligence.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.Do you tell potential investors they should expect to double their money with you? Is that the standard sales pitch? I always heard when someone asks you for money with promises that are too good to be true you turn around and walk away. Sometimes a wake up call is necessary lest we repeat the same mistake.
If that's your position and opinion then there is a civil way to get it
across your name calling and such is just so transparent.. And keep in mind many of us double our money all the time in Real Estate ventures.. Closed one yesterday were my return was over 50% apr.. AS well as Flippers I fund 100% who make infinite returns. Just have to know the right folksSure we more than double our money in real estate. I'm specifically writing about doubling money in 5 years as a LP in a syndication deal that you put money into in 2024. There were plenty of syndicators who produced a big return like that (occasionally) in the past. Generally not the ones that needed 30 telemarketers and don't confuse a bull market with intelligence.
Well its hard to predict the market will do between now and 5 years from now right ? But I agree on the basic premise on syndication its totally sponsor dependent.. A great sponsor can rescue a bad project a poor sponsor can run a great project into the ground. Further more I think many investors invest with certain sponsors based on their on line popularity and not really on the merits of theie past achievements or should we say track record. Additionally for those not in the business like I am and many on BP are even if the syndicate deal only got you 6% cash flow and maybe 25% bump on your investment not 100% that's still a great win for many right ?
- 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votesRespectfully, that is not a win. You have to earn a monumental return to compensate for the risk of sending money to an unknown you discover online. The websites have fake information on them. I was on one today for someone who participates here regularly and the largest transaction on their portfolio page had nothing to do with them. No explanation given. 25% in five years and 6% cash flow for maybe part of that time? Not enough. TBills pay over 5% with no state income tax.
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @Jay Hinrichs:
Quote from @Melanie P.:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youRealistic returns for next five years: Zero.
May I ask what you do or did that gave you financial freedom enough to have accredited investor status? How'd you raise the $100k? Must have bumped your head when you fell off the turnip truck.
Why not invest $100k in real estate you actually get the title to? Seriously, is it this easy to dupe people out of money? Even BERNIE MADOFF didn't promise to double your money. And the crazy thing is -- it only seems to have made you more interested..
Melanie your just being Rude.. you have no clue who what are where folks are financially. so to make a proclamation that William must have fell off a turnip truck and bumped his head is over the top and well not becoming a lady.Do you tell potential investors they should expect to double their money with you? Is that the standard sales pitch? I always heard when someone asks you for money with promises that are too good to be true you turn around and walk away. Sometimes a wake up call is necessary lest we repeat the same mistake.
If that's your position and opinion then there is a civil way to get it
across your name calling and such is just so transparent.. And keep in mind many of us double our money all the time in Real Estate ventures.. Closed one yesterday were my return was over 50% apr.. AS well as Flippers I fund 100% who make infinite returns. Just have to know the right folksSure we more than double our money in real estate. I'm specifically writing about doubling money in 5 years as a LP in a syndication deal that you put money into in 2024. There were plenty of syndicators who produced a big return like that (occasionally) in the past. Generally not the ones that needed 30 telemarketers and don't confuse a bull market with intelligence.
Well its hard to predict the market will do between now and 5 years from now right ? But I agree on the basic premise on syndication its totally sponsor dependent.. A great sponsor can rescue a bad project a poor sponsor can run a great project into the ground. Further more I think many investors invest with certain sponsors based on their on line popularity and not really on the merits of theie past achievements or should we say track record. Additionally for those not in the business like I am and many on BP are even if the syndicate deal only got you 6% cash flow and maybe 25% bump on your investment not 100% that's still a great win for many right ?
I have an open mind and when I see someone raising for something new I'll compliment them on the idea. But all these pitches are the same pitch that is now 2 years stale. A lot of people are gonna die on that pitch. No reason to pump up those numbers. - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youit depends on market, see my post that includes the chart, your return will 90% follow that chart, currently charts are going down, just wait til spread is positive before investing. 70% of the time the return is created by the market.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youWhile we talk about returns, one of the ways to gather whether your investment may yield successful results is to ask the sponsor if they will provide audited financials from their prior offerings? Or if they have had those vetted by a third party.
Recently I had a sponsor send me some information on the gross (not net) returns and they took into account depreciation as part of the overall yield. When I asked "what did investors get" they kept going back to the overall gross return and were using funny math to get to their numbers.
7e investments53 Reviews - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Chris Seveney:
Quote from @William Coet:
Hello,
When investing with an experienced multifamily sydicator, what are the realistic returns for a 5 year investment of 100k? One operation I contacted is projecting a return of 200k (100% return in 5 years) which seems surprisingly good. I do not know if this is realistic or farfetched.
Thank youWhile we talk about returns, one of the ways to gather whether your investment may yield successful results is to ask the sponsor if they will provide audited financials from their prior offerings? Or if they have had those vetted by a third party.
Recently I had a sponsor send me some information on the gross (not net) returns and they took into account depreciation as part of the overall yield. When I asked "what did investors get" they kept going back to the overall gross return and were using funny math to get to their numbers.
yes, and ask their T2, most syndications are got hit from multiple angle right now to increase in property tax, insurance, increasing debt service and stagnant rent. Some of their UW on insurance and tax are just sucks or plain wrong.
but i still see some apt is being offered for DSCR 1.8x in Y1 in the T1 before value-add, that one i'm bit comfortable.
these days i prefer to invest in boring city (fresno , MN, south dakota, montana,etc), not too many cowboy operators in those place.
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