PSA - Open Door Capital & Brandon Turner

[Brady Winder]

I wanted to share a recent experience regarding Open Door Capital, which is run by Brandon Turner.  I have participated in multiple deals with Open Door Capital.  Some have gone well, but the deal I am highlighting did not.  

I, and all the Class B investors, will be losing 100% of our invested capital in this particular syndication.  I invested a substatial amount of money in this deal.

In my view the reasons for the loss are as follows:

1. The syndicators accepted a loan that would need to be refinanced after only 3 years

2. The syndicators didn't anticipate that interest rates and cap rates could rise as quickly as they did.

3. The investment was too highly leveraged, which made refinancing infeasible

Needless to say, I will not be investing with Brandon Turner or Open Door Capital again.  In fact, I may not participate in syndicated investments in the future.  I have never lost money on a deal I personally managed.  If I do continue to invest in syndications it will be with other reputable syndicators like Praxis Capital, Apex One, 37 Parallel, etc.  

To be fair to Brandon Turner and his team, I think they are good people with good intentions, but their foresight in this deal was poor.  Many excuses were made, but at the time of the investment it was obvious that interest rates and cap rates could not go much lower.

I am not very active on Bigger Pockets, but if you would like to ask me any questions feel free to email me.

[Ken M.]

Quote from @Brady Winder:

I wanted to share a recent experience regarding Open Door Capital, which is run by Brandon Turner.  I have participated in multiple deals with Open Door Capital.  Some have gone well, but the deal I am highlighting did not.  

I, and all the Class B investors, will be losing 100% of our invested capital in this particular syndication.  I invested a substatial amount of money in this deal.

In my view the reasons for the loss are as follows:

1. The syndicators accepted a loan that would need to be refinanced after only 3 years

2. The syndicators didn't anticipate that interest rates and cap rates could rise as quickly as they did.

3. The investment was too highly leveraged, which made refinancing infeasible

Needless to say, I will not be investing with Brandon Turner or Open Door Capital again.  In fact, I may not participate in syndicated investments in the future.  I have never lost money on a deal I personally managed.  If I do continue to invest in syndications it will be with other reputable syndicators like Praxis Capital, Apex One, 37 Parallel, etc.  

To be fair to Brandon Turner and his team, I think they are good people with good intentions, but their foresight in this deal was poor.  Many excuses were made, but at the time of the investment it was obvious that interest rates and cap rates could not go much lower.

I am not very active on Bigger Pockets, but if you would like to ask me any questions feel free to email me.

I don't do syndications and would not consider them, my personal choice.

But, any investment can go bad. I've had a couple of stinkers myself. That's why we get the big bucks. Sometimes they work out. And we shoot for more wins than losses.

The average at bat hitting for a PROFESSIONAL baseball player is .249 He gets a hit 25% of the time and gets paid millions of dollars for hitting 25% in his contract. 

Are people expecting too much perfection from investors? I don't know Open Door Capital or Brandon Turner or even the circumstances, but from a reality check; seems we ought to keep a  proper perspective.