Ashcroft Capital Syndication

29 Replies

I am considering investing in a Multifamily syndication deal with Ashcroft Capital.  Outside of their investor margins being a little thin, does anyone have any feedback they provide from personal experience or research they performed on Ashcroft?

I have not invested with Ashcroft, however I have invested in several syndications. The best benefit of syndications is the passive nature and the amount of information you can gather. You have prepared financials, and can learn about the strategy and performance of the properties based on many years of combined knowledge that the syndication has, in this case Ashcroft. On biggerpockets podcast, they put it a good way... You can buy a stock, in lets say apple or Microsoft, but that doesn't give you a seat at the table of CEO, CFO, COO ect... but In syndications, you can talk with the managing partner and get all the information, strategy, and experience ect....

I have invested with Ashcroft with mixed results. The lead sponsor is super important and that varies from deal to deal. So you will want to make sure to vet that. Also Ashcroft's split isn't as generous as other syndicators. But they do get deals in a great locations. 

If you want to discuss more specifics, feel free to ping me. 

Carmen Dettloff

Derek, any reason you'd prefer investing in a syndication rather than doing smaller deals and deploying your own capital? Obviously, the passive nature, but you can find an operating partner and you wouldn't need to give up control. Syndications are very specific, if you have any real estate experience, you may be better off doin your own thing. 

Just some thoughts, good luck! 

@Carmen Dettloff   Your advice aligns with my research.  Thank you for confirming these findings.  The current offering in Carrollton, TX is an off-market deal with favorable terms.  I believe it will be a good investment.  The investor margins on profit are just a little thin.

I personally have not invested with Ashcroft, so what I write below isn't a reflective upon them, but GP's in general: 

Make sure you're asking the right questions and looking at a sponsors underwriting carefully. Are they really able to achieve the projections or will they likely fall short? Right now, most cities are seeing a decline in rent prices and in occupancy and that trend is likely to continue. Is the sponsor reflecting that? 

I wrote and article on how to find good deals as an LP that may help: 

https://www.biggerpockets.com/... 

Ashcroft can offer slimmer returns and still have excess demand for their offerings because of... brand. They have successfully overruled the two most powerful maxims most investors use to determine what to invest in: 1) location, location, location and 2) the ROI.


As the owner of a branding agency, I say "Go Joe go!"

Hi Derek. I was going to invest with Ashcroft in Feb/March (it would have been my first passive multifamily deal) but the deal was quashed because of Covid. I trust Joe and believe he is one the "good guys" in the multifamily syndication space. If you are an accredited investor, do it. Hope this helps

Ashcroft Capital and Joe Fairless are some of the leaders in the multi family syndication space.  When investing in any syndication you will want to do your own due diligence on the sponsors of the deal.  At this point, they have nearly $1 billion of AUM and have a few years of a successful track record.  That being said, evaluate every property on its own merits! 

Hope this helps! 

Tim Lyons 

As a LP I would look at the numbers. What is the reversion Cap rate, assumed rent increases per year, and what is assumed economic occupancy. Those three drive the proforma. Who cares what the splits are if the UW assumptions are not right.

I’ve invested with Ashcroft on a number of their deals. All are current on preferred returns and I’ve had one liquidity event ahead of schedule. My recommendation would be to plan to achieve a diversified portfolio across sponsors, geographical areas and asset classes. 

Thinner margins are a reflection of overall market conditions so you need to dig deep into the assumptions to understand the risk being taken to deliver those numbers. I’d also suggest a greater focus on return of capital, than return on capital. One deal gone south has a far greater impact on overall returns than a deal completed at 1% less return. 

Good luck!

I'm definitely looking into their current fund. That's their new structure. It sounds pretty good at first glance. Any others looking into Ashcroft and their new fund?

Hi Justin. Basically, they will put 5-7 properties into a fund, all value-add, all in their preferred areas like D-FW. They prefer private lenders, they do the PM and the reno, they pay 5.6% the first year for one class of investor, and a straight 10% for another class (with no upside for those folks). Big complexes, Class A/B. Potential refinance in year 2-3. They take at least $50k, and have entry points every month, I believe. I'm definitely looking into it! @Ronald Rohde is going to help me see all the relevant details. 

Originally posted by @Jason Merchey :

Hi Justin. Basically, they will put 5-7 properties into a fund, all value-add, all in their preferred areas like D-FW. They prefer private lenders, they do the PM and the reno, they pay 5.6% the first year for one class of investor, and a straight 10% for another class (with no upside for those folks). Big complexes, Class A/B. Potential refinance in year 2-3. They take at least $50k, and have entry points every month, I believe. I'm definitely looking into it! @Ronald Rohde is going to help me see all the relevant details. 

 Thanks Jason, this is a really useful thread. I may recommend you guys connect offline though.

I have not invested in Ashcroft’s current fund yet but I have invested in multiple deals with them before the fund was developed. I have been extremely satisfied with the way all the deals have progressed so far.  Their communication with investors is excellent. I’m sure I will invest in Joe and Franks fund before to long. 

I have invested in half a dozen Ashcroft deals and have only positive feedback. Before I began investing with them, I had a business-owner relative in the DFW area provide feedback on the target area and visit the target complex, and only proceeded after they gave the thumbs up.  We did this for the first several deals, but I no longer feel the need to do so as Frank and Joe have delivered on their plans for each complex.  They are one of three syndicators I invest with and are the best communicators and probably the most consistent in terms of delivering the returns according to plan.  Returns today aren't as high in general as they were a few years ago, but that applies across the industry.  I plan to continue investing with Ashcroft in the future.

I have since looked at the underwriting on the two assets they will place or have placed in the Fund. They seem fine. I don't think Ashcroft has any issues with generally how they underwrite. I have gotten a number of mistakes in the distributions, but they always seem to correct them and say that their new system will obviate that kind of thing going forward. I think the only two issues that I think about as I contemplate signing on are the speed with which they have been growing, and the fact that they are just now moving to being vertically integrated -- their property management and renovation teams are all in-house now -- not 3rd party like they used to be. They also shuffled their fees around to reflect this. It's probably a good thing, but as you can see, the theme here is growth management -- can they keep growing successfully, or will they encounter sheering forces that cause a problem? I think the odds are pretty good that they bring all hands on deck and make the step up to the big time in 2021-22.

Originally posted by @Carmen Dettloff :

I have invested with Ashcroft with mixed results. The lead sponsor is super important and that varies from deal to deal. So you will want to make sure to vet that. Also Ashcroft's split isn't as generous as other syndicators. But they do get deals in a great locations. 

If you want to discuss more specifics, feel free to ping me. 

Carmen Dettloff

Great points!!