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General Real Estate Investing

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Mike Bryant
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  • Alpharetta, GA
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Multi-Family Investing Returns

Mike Bryant
  • Investor
  • Alpharetta, GA
Posted Mar 6 2024, 10:01

Anyone have a few years experience with investing in any of the larger Multi-family funds (e.g. Cardone Capital, crowdfunding, etc)?  What kind of Total Returns have you experienced?

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Ian Ippolito
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  • Tampa, FL
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Ian Ippolito
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  • Investor
  • Tampa, FL
Replied Mar 7 2024, 05:31
Quote from @Mike Bryant:

Anyone have a few years experience with investing in any of the larger Multi-family funds (e.g. Cardone Capital, crowdfunding, etc)?  What kind of Total Returns have you experienced?


I have a large portfolio of syndications/crowdfunding deals and see thousands of deals a year.  (And as a conservative investor I personally would never touch any of the Cardone deals, for multiple reasons).

Asking for total returns on this is like asking for the total returns of someone who invests in hedge funds (and expecting it to apply to your own experience). First, there are so many different strategies (each with their own different risk/reward) that there is no one single answer. And second, a random investor is probably investing in things you might never touch (and so get a completely different answer than you would).

There are four different strategies: core, core plus, value-added and opportunistic. Each involves taking on more risk but then if it succeeds them there's more reward. 

It also depends on things like if you're investing in debt or equity (for completely different answers...again more safety equals lower return and more risk equals more potential reward ).

It also depends on the structure (for example, multiple levels of equity can drain returns for those lower in the stack).

And then it depends on when in the cycle you ask (and if the deal is completed or has time to wait). For example we are in valuation downturn for office, self storage and some multi-family. So if you ask today about a deal that's not fully completed, the total return (which includes current valuation) includes a minus factor. But if an when the cycle recovers, the valuation will be quite different in the end.

The total return also includes income and this varies depending on the deal. And right now some deals (less conservatively structured with high debt, floating rate loans, etc) are under distress and had to stop distributions. (I.e. sponsors who structure like Cardone). Many of the conversatively structured deals aren't having this problem.  So again, it can vary widely (and someone else's random experience is probably not going to match your own).