Whats going on in Florida! Orlando Florida syndicate buying 50%

6 Replies

I am investing with a syndicate, they are a fund and just bought a property for 50% over the sale price in 2019.

Originally sold in 2019 for $40M, they bought it for $60M just 2 years later - NO VALUE ADD DONE.

What the heck is going on? 

Orlando sure as hell didnt have this appreciation

New cap is at 3% on this class B property.

@AJ Panjavi Orlando is seeing tremendous growth. Rental demand is at an all-time high. We are seeing rental rates rise and when you operate a Large commercial multifamily complex you can force appreciation by increasing the NOI and with rents going up that is what you are seeing. That is not to say that the valuation is correct but it may explain a portion of the property value increase.

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It's the end of 2021. Tax benefits and cost seg can play largely into investments at the end of the year. An acquisition is needed and quickly to provide tax benefits to investors.

 Does not surprise me in price however. A deal we did early this year in Florida, in a recapitalization, was already valued at our 5 year exit immediately after closing. Welcome to Florida

Originally posted by @Chris Levarek :

It's the end of 2021. Tax benefits and cost seg can play largely into investments at the end of the year. An acquisition is needed and quickly to provide tax benefits to investors.

 Does not surprise me in price however. A deal we did early this year in Florida, in a recapitalization, was already valued at our 5 year exit immediately after closing. Welcome to Florida

@chris levarek - what are the tax benefits and cost seg that can influence end of year investments? 

@AJ Panjavi

What a prior buyer paid for a house is normally irrelevant information.

Also, how do you know that there was no value add done?
1) Did you know of the condition in 2019 and the condition of the house now?
2) Were no permits pulled form 2019 to 2021

Furthermore, it may be good that 'no value add' was done. This may allow for the sponsor to fix it up and sell it for more than 60million.

If you are investing through a syndicator, you are normally betting on the 'syndicator' instead of the deal. 

Best of luck