Open door capital scam???
Minneapolis, MN · Member since 2018 · 33 posts · 53 votes
Open door capital scam???
Most Popular Reply
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
1y@Joey Wilson, I would not classify this as a scam, but we are talking a bit semantics here.
As you noted, and others echoed, creating content can create a lot of trust. Raising investor capital is done on trust. But, the great content creators do not make for good investment managers, as you learned. In fact, the best operators/investment managers, are often NOT good marketers. They continue to play in the "who you know" space because they understand:
1. Their results will continue to attract the capital they need
2. When money is flowing in is often when the most money will be lost
3. They are too busy OPERATING, and don't have bandwidth to market
4. Not all attention is good attention. As many groups are seeing here: when you raise money from trust built on online forums, those same investors will also call you out on online forums.
But to you point, I don't think ODC is a scam. I think they got out over their skis for several reasons, but they did not go out with the intent of losing/taking your money.
191 Replies
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes1y
@Ned Carey, to add to Chris and Don's great responses, having been on the front lines dealing with investors directly, but specifically in the 2021/early 2022 boom, I will say many, many investors did minimal due diligence.
They were so hyped with the ever growing stock portfolios, stimulus checks, equity flooding in from their home and the ability to tap into that equity at 2.5% interest rates, that they knew they wanted in. That is all that mattered. This is not an excuse for sponsors that began to think they were untouchable due to their "stellar track record" and a captivating story to bring in investors. But, I would be shocked if, as Don noted, a sponsor didn't include interest rate risks in their PPM.
The fact of the matter is: almost no investors read the PPM. And even if they did, the psychology of "needing to get into real estate" would make many investors overlook many of those risks. Most innately knew interest rates could go up, but they had already made up their mind that they wanted in, and so even when the risk was outlined in PPM, it was diminished in the investor's mind.
I continue to believe a lot of these investments that are going south are synonymous with the GFC and subprime loans. The sponsors should have known better and had a more critical eye. The investors should have known better and had a more critical eye. The debt funds: the same. No one party is completely innocent and no one party is completely to blame.
- 1yKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey Joey, From my experience, it’s not super common for funds to go underwater like this, but it can happen in tough markets. I’d recommend reviewing the details of the fund and the properties they invested in. Moving forward, be cautious with how much you invest in any single deal or fund, especially early on.
Kerlous Tadres | Reafco Real Estate540 Reviews - Member since 2024 · 65 posts · 63 votes1y
It's just a values thing. My father always taught me that any debt you take on is paid before you eat. I think syndicators think they take on investors and not debt. To me they are the same thing, you pay them before you eat. Brandon is spamming the social media venues like crazy, I hate that. I tend to think he's a good guy but if he were, he would stop looking for investors, subscribers, workshop money.... I hate it for all involved but Brandon is not helping himself I think.
- Metro NY + New Bedford · Member since 2022 · 294 posts · 216 votes1y
1] If you have any ability with a AI program, upload the Operating Agreement and find out if what they are doing is permitted. I use Claude Sonnet 4.0 from Anthropic. Once that doc is uploaded, you can specifically ask if what they are doing is permitted.
2] If you have any interaction with them, I recommend that you contact them through their Registered Agent, using Certified Mail. it will get their attention.
3] You have the right to view their actual financial statements and tax returns. See my posts on this topic from January. And, after reviewing these dox, run them by your AI buddy to see if any transactions were NOT in the Operating Agreement,
4] While you presume that this is just a case of bad luck, there may be some fraud involved. Just sayin'.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Evan Polaski Agree that most investors do little due diligence. Anyone who invested with a 1st time syndicator simply ignored the information they already new.
I just signed docs yesterday and told the sponsor (J Scott) that it was some heavy reading. He said "good for you, most investors don't read the documents"
My issue is the interest rate risk wasn't, just a risk, it was a high probability with potentially disastrous results. That is exactly what happened. This was both knowable and predictable. It amazes me that so many failed to recognize this risk or chose to ignore it.
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesNed, what is “obvious” to us who have spent a lifetime as real estate investors is NOT obvious to most people. Younger people look at me like I’m crazy when I mention interest rates in the double digits throughout the 1980s.
Quote from @Ned Carey:
@Evan Polaski Agree that most investors do little due diligence. Anyone who invested with a 1st time syndicator simply ignored the information they already new.
I just signed docs yesterday and told the sponsor (J Scott) that it was some heavy reading. He said "good for you, most investors don't read the documents"
My issue is the interest rate risk wasn't, just a risk, it was a high probability with potentially disastrous results. That is exactly what happened. This was both knowable and predictable. It amazes me that so many failed to recognize this risk or chose to ignore it.
Although sometimes it is best to be “out of the market”, that’s a hard thing to do.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Don Konipol
'Ned, what is “obvious” to us who have spent a lifetime as real estate investors is NOT obvious to most people.'
I think you just described why common sense isn't so common - Member since 2021 · 27 posts · 31 votes1y
I assume you invested in Heights on Katy. I put $100,000 in and received an email asking if I wanted $10,000 back or try to recover more of my investment with the buyer they are selling to.
They are putting it to a vote, so we shall see what happens.
I don't think he is a scammer. However, I do feel the results speak for themselves about his skill at analyzing and running a multi-family property.
When someone invests $100,000 and might only receive $10,000 back, that says it all. - Rental Property Investor · San Diego, CA · Member since 2014 · 13 posts · 11 votes1y
FYI, I also invested 125k with ODC funds in Austin and Houston. All distributions have stopped for a while and not sure how long they can operate with loss. I wish I never got into this, feel scammed. Also worry about tax consequence due to all the cost segregation and depreciation from previous years.
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes1y
@Madhan S. You should go comment on his last IG post and say you want your money back. Hes still bragging of being a multi millionaire real estate investor while losing millions of hard earned money.
- Metro NY + New Bedford · Member since 2022 · 294 posts · 216 votes1y
Ask ODC for a copy of the most recent tax returns, then show those to your CPA for an opinion.
You have an absolute legal, statutory right to those tax returns if it's an LLC. Make the request through their Registered Agent
See my posts from January 2025 on this topic.
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes1y
Everyone should go comment on his last Instagram post saying you want your money back. He's living his best life bragging about being a millionaire all while millions of dollars of hard earned money that's now being flushed into bad RE deals.
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes1y
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
- 1yJustin R.Pro MemberRental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
Quote from @Joey Wilson:
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
I don't believe there have yet been significant "realized" losses with any of his funds. A few of ODC's syndications have struggled since the interest rate hikes, but I believe ODC's transparency has actually created some panic among newer investors who are seeing the challenges firsthand and hearing about possible projections for the first time.
When I invest with an operator, I have two primary expectations: 1) Honesty and integrity, and 2) Working hard to protect my money. Brandon and the ODC team have delivered on both fronts, even through these difficult times.
Claims that he's "living his best life" while investors struggle are simply inaccurate. He's deeply concerned about his investors' money and has even relocated to an area near the distressed properties to manage the situation directly.
Do I think ODC is perfect? No - I personally believe they grew too fast. Did they time the market perfectly? Absolutely not. They faced unforeseen issues with timing and debt, just like many other operators. Every operator faces challenges, but what separates the good ones is how they act and perform during times of distress. Are they accountable, honest, transparent, and operationally savvy enough to pull through?
So far, ODC has demonstrated all of these qualities, and I would invest with them again once there's more market stability.
- Member since 2021 · 27 posts · 31 votes1y
Quote from @Justin R.:
Quote from @Joey Wilson:
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
I don't believe there have yet been significant "realized" losses with any of his funds. A few of ODC's syndications have struggled since the interest rate hikes, but I believe ODC's transparency has actually created some panic among newer investors who are seeing the challenges firsthand and hearing about possible projections for the first time.
When I invest with an operator, I have two primary expectations: 1) Honesty and integrity, and 2) Working hard to protect my money. Brandon and the ODC team have delivered on both fronts, even through these difficult times.
Claims that he's "living his best life" while investors struggle are simply inaccurate. He's deeply concerned about his investors' money and has even relocated to an area near the distressed properties to manage the situation directly.
Do I think ODC is perfect? No - I personally believe they grew too fast. Did they time the market perfectly? Absolutely not. They faced unforeseen issues with timing and debt, just like many other operators. Every operator faces challenges, but what separates the good ones is how they act and perform during times of distress. Are they accountable, honest, transparent, and operationally savvy enough to pull through?
So far, ODC has demonstrated all of these qualities, and I would invest with them again once there's more market stability.
I received an email asking if I wanted a 90% loss or perhaps a 50% loss by waiting 7 years after selling a property to a new investor who has the proper funding to continue with it.
So this is very close to a huge realized loss, and I will know the outcome soon.
Anyone is welcome to risk 90% of their hard-earned money and invest with them, but I can think of many better risk-to-reward investments that could be made.
I do agree he is deeply concerned, this is a big issue for his reputation, and that is something all online influencers care a lot about.
I also agree they are honest and transparent, but that does not ease the pain of receiving an email and knowing that what you thought was a fairly safe Real Estate investment might lose 90%.
I expect Crypto Alt Coins to drop 90%, not Real Estate, it is shocking. - Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes1y
Quote from @Justin R.:
Quote from @Joey Wilson:
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
I don't believe there have yet been significant "realized" losses with any of his funds. A few of ODC's syndications have struggled since the interest rate hikes, but I believe ODC's transparency has actually created some panic among newer investors who are seeing the challenges firsthand and hearing about possible projections for the first time.
When I invest with an operator, I have two primary expectations: 1) Honesty and integrity, and 2) Working hard to protect my money. Brandon and the ODC team have delivered on both fronts, even through these difficult times.
Claims that he's "living his best life" while investors struggle are simply inaccurate. He's deeply concerned about his investors' money and has even relocated to an area near the distressed properties to manage the situation directly.
Do I think ODC is perfect? No - I personally believe they grew too fast. Did they time the market perfectly? Absolutely not. They faced unforeseen issues with timing and debt, just like many other operators. Every operator faces challenges, but what separates the good ones is how they act and perform during times of distress. Are they accountable, honest, transparent, and operationally savvy enough to pull through?
So far, ODC has demonstrated all of these qualities, and I would invest with them again once there's more market stability.
This is a great response. Sponsors are going to make mistakes, but its how they handle them that tells the real story.
- Member since 2021 · 27 posts · 31 votes1y
Quote from @Todd Dexheimer:
Quote from @Justin R.:
Quote from @Joey Wilson:
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
I don't believe there have yet been significant "realized" losses with any of his funds. A few of ODC's syndications have struggled since the interest rate hikes, but I believe ODC's transparency has actually created some panic among newer investors who are seeing the challenges firsthand and hearing about possible projections for the first time.
When I invest with an operator, I have two primary expectations: 1) Honesty and integrity, and 2) Working hard to protect my money. Brandon and the ODC team have delivered on both fronts, even through these difficult times.
Claims that he's "living his best life" while investors struggle are simply inaccurate. He's deeply concerned about his investors' money and has even relocated to an area near the distressed properties to manage the situation directly.
Do I think ODC is perfect? No - I personally believe they grew too fast. Did they time the market perfectly? Absolutely not. They faced unforeseen issues with timing and debt, just like many other operators. Every operator faces challenges, but what separates the good ones is how they act and perform during times of distress. Are they accountable, honest, transparent, and operationally savvy enough to pull through?
So far, ODC has demonstrated all of these qualities, and I would invest with them again once there's more market stability.
This is a great response. Sponsors are going to make mistakes, but its how they handle them that tells the real story.
@Todd Dexheimer I disagree. I think results are the most important thing. The real story is not that they are nice and upfront telling their investors they lost almost all their money; the real story comes when they tell investors they made money, they did not lose 90% of their money.
Yes, Brandon Turner and Open Door Capital are very upfront, but their "Real Story" is still being written, and they need a lot of their deals to close with a profit, regardless of how nice and upfront they are about what is happening. - Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes1y
Quote from @Bryn Kaufman:
Quote from @Todd Dexheimer:
Quote from @Justin R.:
Quote from @Joey Wilson:
Go comment on his last IG post bragging about being a millionaire from RE. The amount of comments and reviews I've seen of money being lost to his deals is criminal.
I don't believe there have yet been significant "realized" losses with any of his funds. A few of ODC's syndications have struggled since the interest rate hikes, but I believe ODC's transparency has actually created some panic among newer investors who are seeing the challenges firsthand and hearing about possible projections for the first time.
When I invest with an operator, I have two primary expectations: 1) Honesty and integrity, and 2) Working hard to protect my money. Brandon and the ODC team have delivered on both fronts, even through these difficult times.
Claims that he's "living his best life" while investors struggle are simply inaccurate. He's deeply concerned about his investors' money and has even relocated to an area near the distressed properties to manage the situation directly.
Do I think ODC is perfect? No - I personally believe they grew too fast. Did they time the market perfectly? Absolutely not. They faced unforeseen issues with timing and debt, just like many other operators. Every operator faces challenges, but what separates the good ones is how they act and perform during times of distress. Are they accountable, honest, transparent, and operationally savvy enough to pull through?
So far, ODC has demonstrated all of these qualities, and I would invest with them again once there's more market stability.
This is a great response. Sponsors are going to make mistakes, but its how they handle them that tells the real story.
@Todd Dexheimer I disagree. I think results are the most important thing. The real story is not that they are nice and upfront telling their investors they lost almost all their money; the real story comes when they tell investors they made money, they did not lose 90% of their money.
Yes, Brandon Turner and Open Door Capital are very upfront, but their "Real Story" is still being written, and they need a lot of their deals to close with a profit, regardless of how nice and upfront they are about what is happening.Where did I say anything about them being nice and upfront? I said that I agreed about 1) Honesty and integrity, and 2) Working hard to protect my money.
- Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes1y
100K invested into ODC...wow
Imagine if you just invested that in the S&P 500. Totally passive, long history, diversified etc.
And ODC is asking for more money to throw into a sinking ship...
- 1yJustin R.Pro MemberRental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
- Member since 2021 · 27 posts · 31 votes1y
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this. - Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes1y
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Jeremy Horton:
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
What would be interesting (and not directed at open door or any specific sponsor), is to see the actual track records of some of the so called gurus. Many tell tales that would make a fisherman look honest. I am curious if many have actually done what they said they have done.
7e investments53 Reviews - 1yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votesDid you have to be an accredited investor? Not sure how you could not know the impact of leverage in both ascending and descending markets.
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.
i have 3 syndications that I have joined in the last few years. The only one that is basically performing to plan is the most conservative (Wellings capital). Two of them I fear I will lose on my invested amount.
the market is very different for many commercial RE classes than a few years ago. We got spoiled with syndications returns that regularly far surpassed the projections. I have no idea what the average annual return was for syndication that exited between 2015 and 2021 but I would not be surprised if the average exceeded 20%/year.
i am not invested with ODC, but they are not alone in having issues.
brian Burke was kind enough to analyze one of my two syndications that seem to be struggling. I gave him the slide deck. My offering was with an Experienced operator who had gone full cycle on the same plan many times always having performed to achieve max GP profit share. Brian had 3 comments 1) smaller offering than Brian likes 2) divorce of one of the named partners and his exit may have impacted the performance 3) poor timing, residential RE is struggling. I view item #1 as a Brian preference, but I will be cognizant of this going forward (if the person who literally wrote the book on syndications states something related to syndication it is likely in your best interest to at least consider it). #3 I had concerns about the timing but discounted them due to the operators’ history of success. #2 there is no way I could know of a rocky marriage and exit by a named GP.
My point It is a challenging commercial RE market. I question how many syndications that were formed in 2021 or 2022 are performing or exceeding plan. My guess is not many.
I wish all of us the best in at least getting our initial investment back.
good luck - Member since 2021 · 27 posts · 31 votes1y
Quote from @Dan H.:
Did you have to be an accredited investor? Not sure how you could not know the impact of leverage in both ascending and descending markets.Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.
i have 3 syndications that I have joined in the last few years. The only one that is basically performing to plan is the most conservative (Wellings capital). Two of them I fear I will lose on my invested amount.
the market is very different for many commercial RE classes than a few years ago. We got spoiled with syndications returns that regularly far surpassed the projections. I have no idea what the average annual return was for syndication that exited between 2015 and 2021 but I would not be surprised if the average exceeded 20%/year.
i am not invested with ODC, but they are not alone in having issues.
brian Burke was kind enough to analyze one of my two syndications that seem to be struggling. I gave him the slide deck. My offering was with an Experienced operator who had gone full cycle on the same plan many times always having performed to achieve max GP profit share. Brian had 3 comments 1) smaller offering than Brian likes 2) divorce of one of the named partners and his exit may have impacted the performance 3) poor timing, residential RE is struggling. I view item #1 as a Brian preference, but I will be cognizant of this going forward (if the person who literally wrote the book on syndications states something related to syndication it is likely in your best interest to at least consider it). #3 I had concerns about the timing but discounted them due to the operators’ history of success. #2 there is no way I could know of a rocky marriage and exit by a named GP.
My point It is a challenging commercial RE market. I question how many syndications that were formed in 2021 or 2022 are performing or exceeding plan. My guess is not many.
I wish all of us the best in at least getting our initial investment back.
good luckYes, I am an accredited investor. I also have a lot of money with Brian Burke, whom you mentioned.
I never did syndication investing before, and had no idea I could lose 90% of my money.
Like all investments, I probably got a warning that I could lose all my money, but I figured that is more of a generic thing everyone says to cover their legal liability. I would imagine all syndication investments have that warning.
I appreciate your wish of good luck, but that has already expired with the one Open Door Capital deal.
Hopefully, other deals I am in will do better, but again, if I knew the risk was 90% I never would have put a penny in any deals, and I hope those reading any of this thread never invest in any deals for that reason. - Member since 2021 · 27 posts · 31 votes1y
Quote from @Chris Seveney:
Quote from @Jeremy Horton:
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
What would be interesting (and not directed at open door or any specific sponsor), is to see the actual track records of some of the so called gurus. Many tell tales that would make a fisherman look honest. I am curious if many have actually done what they said they have done.
You can see Open Door Capital has closed some of their deals from their website, but most remain open, so hopefully the story gets better for other investors.
However, I doubt any syndication will promote the fact that they lost all or more of their investors' money in a deal, so I don't think we will ever see that. - 1yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Bryn Kaufman:
Quote from @Dan H.:
Did you have to be an accredited investor? Not sure how you could not know the impact of leverage in both ascending and descending markets.Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.
i have 3 syndications that I have joined in the last few years. The only one that is basically performing to plan is the most conservative (Wellings capital). Two of them I fear I will lose on my invested amount.
the market is very different for many commercial RE classes than a few years ago. We got spoiled with syndications returns that regularly far surpassed the projections. I have no idea what the average annual return was for syndication that exited between 2015 and 2021 but I would not be surprised if the average exceeded 20%/year.
i am not invested with ODC, but they are not alone in having issues.
brian Burke was kind enough to analyze one of my two syndications that seem to be struggling. I gave him the slide deck. My offering was with an Experienced operator who had gone full cycle on the same plan many times always having performed to achieve max GP profit share. Brian had 3 comments 1) smaller offering than Brian likes 2) divorce of one of the named partners and his exit may have impacted the performance 3) poor timing, residential RE is struggling. I view item #1 as a Brian preference, but I will be cognizant of this going forward (if the person who literally wrote the book on syndications states something related to syndication it is likely in your best interest to at least consider it). #3 I had concerns about the timing but discounted them due to the operators’ history of success. #2 there is no way I could know of a rocky marriage and exit by a named GP.
My point It is a challenging commercial RE market. I question how many syndications that were formed in 2021 or 2022 are performing or exceeding plan. My guess is not many.
I wish all of us the best in at least getting our initial investment back.
good luckYes, I am an accredited investor. I also have a lot of money with Brian Burke, whom you mentioned.
I never did syndication investing before, and had no idea I could lose 90% of my money.
Like all investments, I probably got a warning that I could lose all my money, but I figured that is more of a generic thing everyone says to cover their legal liability. I would imagine all syndication investments have that warning.
I appreciate your wish of good luck, but that has already expired with the one Open Door Capital deal.
Hopefully, other deals I am in will do better, but again, if I knew the risk was 90% I never would have put a penny in any deals, and I hope those reading any of this thread never invest in any deals for that reason.> I also have a lot of money with Brian Burke
Brian has a very good reputation. Hopefully his syndication(s) that you are invested in at least perform to plan. I am highly considering my next LP to be Brian’s syndication. I likely would have already committed but life is busy.
>I never did syndication investing before, and had no idea I could lose 90% of my money.Unfortunately it is possible to lose 100% of your investment. Most syndicators use leverage as it is required to achieve maximum ROI. A fairly small decline in value can result in a complete loss of capital.
As I indicated previously the era from 2010 to ~2020 was an incredible time for RE including RE syndications. I believe that at least the more established sponsors were regularly hitting 20%+/year. I saw someone post their syndication return from that period and it was something like an average of 60%/year.
unfortunately we are in a bust period for RE syndications. I have 2 that are not making distributions. I believe both may lose on my initial investment and I have some fear that I may lose all of my investment. I share your pain.I recognize you have given up hope for that investment but I still wish you luck.
- Accountant · 100% Remote · Member since 2019 · 495 posts · 216 votes1y
Quote from @Chris Seveney:
Quote from @Jeremy Horton:
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
What would be interesting (and not directed at open door or any specific sponsor), is to see the actual track records of some of the so called gurus. Many tell tales that would make a fisherman look honest. I am curious if many have actually done what they said they have done.
Owning an REI bookkeeping firm, I can tell you it's scary what some REIs portray on social media.
Lots of due diligence needs to be performed before investing in anyone's deal or fund, whether they are an "influencer" or not.
I hope everything works out for the best for those of you who are seeing large losses right now.
- Time Capital Bookkeeping (REI since 2019)
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Max Emory:
Quote from @Chris Seveney:
Quote from @Jeremy Horton:
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
What would be interesting (and not directed at open door or any specific sponsor), is to see the actual track records of some of the so called gurus. Many tell tales that would make a fisherman look honest. I am curious if many have actually done what they said they have done.
Owning an REI bookkeeping firm, I can tell you it's scary what some REIs portray on social media.
Lots of due diligence needs to be performed before investing in anyone's deal or fund, whether they are an "influencer" or not.
I hope everything works out for the best for those of you who are seeing large losses right now.
- Time Capital Bookkeeping (REI since 2019)
When we had third party verification report done I was mindblown by some of the stories they were telling us. Basically GP's were creating their own math system to calculate investor returns to try and make numbers look better than what they were. I was like, is it not money invested and money returned? they laughed and were telling me stories of investors using IRR but lumping together everything in the same year or worse. For example if an investor invested $100k on Jan 1 and got $10k on Dec 31st they would group it together to inflate the IRR above 10% as an example.
7e investments53 Reviews - 1yJustin R.Pro MemberRental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
@Chris Seveney are you referring to ODC specifically, or by "they" are you just referring to all operators in general?
Unfortunately too many operators manipulate the investment summary with unrealistic financial projections. I wouldn't imagine ODC would do it intentionally, and laugh about it like you mentioned.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Justin R.:
@Chris Seveney are you referring to ODC specifically, or by "they" are you just referring to all operators in general?
Unfortunately too many operators manipulate the investment summary with unrealistic financial projections. I wouldn't imagine ODC would do it intentionally, and laugh about it like you mentioned.
Sorry to be clear, this was NOT ODC, I do not know who was doing it as they would not state the name of the company - what I was getting at is my third party verification report company had mentioned that the way syndicators and investment firms calculate returns is not as simple as 2+2 and its not uncommon for fuzzy math. Again nothing in my post was directed toward or about ODC.
7e investments53 Reviews - Accountant · 100% Remote · Member since 2019 · 495 posts · 216 votes1y
Quote from @Chris Seveney:
Quote from @Max Emory:
Quote from @Chris Seveney:
Quote from @Jeremy Horton:
Quote from @Bryn Kaufman:
Quote from @Justin R.:
@Jeremy Horton Your hindsight is 20/20. I've also been in ODC funds that have outperformed the S&P 500, so it's not fair to cherry-pick and say how someone "should have" invested while looking back.
@Bryn Kaufman That absolutely sucks - no sugar coating it. I'm in that syndication too. Losing capital cuts deep. It hits our livelihood, our future, our families. The pain is real.
But here's the reality of how this happens in RE versus crypto: leverage. We could have played it safe with Class A, but we chose Class B for the upside. When you take higher-risk equity positions combined with debt, you need to understand the math - if the property drops 25%, we lose everything. It's identical to buying your first home with 20% down and watching a 20% market correction wipe out your equity, except with shorter-term financing amplifying the pressure.
Here's what matters now: many operators are drowning right now. What separates the survivors from the failures is accountability, integrity, and relentless effort to get investors back on track. Brandon and ODC have those qualities.
What I feel is fair and honest, is random people spreading baseless rumors about him "living his best life on the beach" while investors suffer. Unless you have facts, keep the speculation to yourself. The man is losing money alongside his investors and fighting to turn this around.
Sorry to hear you are in the same situation and might lose 90% of your investment. It hurts.
I think it is critical for passive investors to realize they could lose 90% of their investment.
I was not aware of this fact. I figured Real Estate never goes down 90%. The worst case they sell at a small loss. Had I known up front I was risking 90%, there is no chance I would have made that investment.
The risk-to-reward ratio just does not make sense at all for an investment.
I think @Jeremy Horton brings up a great point in that the S&P 500 will never drop 90%.
While the performance might not be great every year, at least you have the option to get out if things don't look good, and even if you ride it out, you will come out with a profit eventually.
So in my opinion his point is valid. I wish I had put that $100,000 into a S&P 500 ETF. I would be very happy now as my profit would be around 70%, and I would have nowhere near the risk I took investing in passive Real Estate.
I would know even if I invested at the wrong time, I am not going to lose 90% of my investment. I just have to wait, and eventually I will be in profit again.
To be honest, I feel that at this point, ALL passive Real Estate investments are bad investments. Why risk 90%? It does not make sense.
My hope is that if anyone reads my posts, I can save them from this devastating loss.
It is really simple, think about the 90% loss, think about the potential reward, compare it to the S&P 500, and the decision is so easy to make.
I am a fool, I invested in Real Estate thinking it was safer than the stock market, and found out that is not true, at least for passive investments like this.Ah - I don't mean to beat down the people that lost money. It's a tough lesson, but it's over and all you can do is move forward now.
I think syndications CAN work - but it depends on a lot of factors. I think the syndicator makes money at the end of the day regardless of everyone else. And I think they have less to lose than everyone else.
The thing that got me during the low rate covid era investing period is that there were new syndicators popping up left and right (extreme greed). MOST of these RE purchases have a balloon payment 3-5-7 years out - and when rates were that low, there was only one place for them to go - up. Purchase prices were high - but hey that was ok because rates were low, right? The thing is - the rate is always subject to change with these commercial loans while the purchase price doesn't change. If it wasn't a fixed rate for 10+ years I would've been extremely weary.
The other thing I don't like about syndications is that your money is stuck - akin to angel investing (I'm assuming here, because I've never read that deep into participating in a syndication). So your money is now completely illiquid. This is a huge red flag. Stocks - totally liquid. Even LTR houses has some liquidity.
You hit the nail on the head with the risk vs reward ratio as well. This should be a pretty balanced ratio. Something to think about moving forward.
I'll have to read this thread back a little and see exactly WHY this syndication failed. On the surface it seems a little greedy.
I listened to a podcast with Brandon Turner not too long ago - TheIcedCoffeeHour. Now I like his old stuff A LOT, when he was coming up and getting big. I did not care for him on this podcast though - he came off like he just thought he was better than everyone. A total "holier than thou" type attitude. And SO much of his stuff is just hype and marketing now.
You actually see that a lot - the real estate guru makes more money through mentorships, master-minds and regurgitating the same info over and over. The car salesman makes more money selling sales courses, etc. A lot of these gurus are making their money off social media and content creation more than actual investing.
What would be interesting (and not directed at open door or any specific sponsor), is to see the actual track records of some of the so called gurus. Many tell tales that would make a fisherman look honest. I am curious if many have actually done what they said they have done.
Owning an REI bookkeeping firm, I can tell you it's scary what some REIs portray on social media.
Lots of due diligence needs to be performed before investing in anyone's deal or fund, whether they are an "influencer" or not.
I hope everything works out for the best for those of you who are seeing large losses right now.
- Time Capital Bookkeeping (REI since 2019)
When we had third party verification report done I was mindblown by some of the stories they were telling us. Basically GP's were creating their own math system to calculate investor returns to try and make numbers look better than what they were. I was like, is it not money invested and money returned? they laughed and were telling me stories of investors using IRR but lumping together everything in the same year or worse. For example if an investor invested $100k on Jan 1 and got $10k on Dec 31st they would group it together to inflate the IRR above 10% as an example.
Wow, that's horrible!
- Time Capital Bookkeeping (REI since 2019)
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Here’s my take on syndication. Please remember that this is coming from someone who has been in the syndication business for over 25 years, and a real estate investor 50 years.
The vast majority of syndications have fees “off the top” averaging 15% +. So investing $100k you’ve already lost $15k. You’re down to $85k BEFORE you start!
The majority of syndications utilize leverage of 60% +. So, you as investor now have have 25% equity with 75% debt after accounting for upfront “fees” by syndicator and third parties.
If the value of the underlying property drops 25%, your equity is WIPED OUT. If values drop a more modest 12.5% HALF your equity is wiped out. And, since commercial property is valued 2/3 by Cap rate (actually, by the present value of future returns, but Cap rate is a good short cut), a rise in interest rates of say 2% from a base of 4% to 6% can result in a 100% wipe out of your equity.
So here’s my take - the fees upfront are a non starter. I’d only invest in syndicated offerings with NO of VERY LOW upfront fees and MOST of my capital going to property purchase or rehab.
That being said 60% leverage is exactly the WORST amount of leverage you can use. 50% or less and you have STAYING power. 80% or more and you have “walk away” power. In a declining market 60 - 75% leverage is a “slow death”.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Don Konipol:
Here’s my take on syndication. Please remember that this is coming from someone who has been in the syndication business for over 25 years, and a real estate investor 50 years.
The vast majority of syndications have fees “off the top” averaging 15% +. So investing $100k you’ve already lost $15k. You’re down to $85k BEFORE you start!
The majority of syndications utilize leverage of 60% +. So, you as investor now have have 25% equity with 75% debt after accounting for upfront “fees” by syndicator and third parties.
If the value of the underlying property drops 25%, your equity is WIPED OUT. If values drop a more modest 12.5% HALF your equity is wiped out. And, since commercial property is valued 2/3 by Cap rate (actually, by the present value of future returns, but Cap rate is a good short cut), a rise in interest rates of say 2% from a base of 4% to 6% can result in a 100% wipe out of your equity.
So here’s my take - the fees upfront are a non starter. I’d only invest in syndicated offerings with NO of VERY LOW upfront fees and MOST of my capital going to property purchase or rehab.
That being said 60% leverage is exactly the WORST amount of leverage you can use. 50% or less and you have STAYING power. 80% or more and you have “walk away” power. In a declining market 60 - 75% leverage is a “slow death”.
in my little world and the one syndication I did as the owner/sponsor I took no up front fees and no fees along the way and only get fee's if there is profit. Aligned interests. Now granted I understand most syndication's dont have the financial ability to work work work then get paid at the end Like I do.. on the flip side I do make more of the profit than what syndicators of MF make .. since i am not front end loading it.. I think thats fair. - Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes1y
Quote from @Don Konipol:
Here’s my take on syndication. Please remember that this is coming from someone who has been in the syndication business for over 25 years, and a real estate investor 50 years.
The vast majority of syndications have fees “off the top” averaging 15% +. So investing $100k you’ve already lost $15k. You’re down to $85k BEFORE you start!
The majority of syndications utilize leverage of 60% +. So, you as investor now have have 25% equity with 75% debt after accounting for upfront “fees” by syndicator and third parties.
If the value of the underlying property drops 25%, your equity is WIPED OUT. If values drop a more modest 12.5% HALF your equity is wiped out. And, since commercial property is valued 2/3 by Cap rate (actually, by the present value of future returns, but Cap rate is a good short cut), a rise in interest rates of say 2% from a base of 4% to 6% can result in a 100% wipe out of your equity.
So here’s my take - the fees upfront are a non starter. I’d only invest in syndicated offerings with NO of VERY LOW upfront fees and MOST of my capital going to property purchase or rehab.
That being said 60% leverage is exactly the WORST amount of leverage you can use. 50% or less and you have STAYING power. 80% or more and you have “walk away” power. In a declining market 60 - 75% leverage is a “slow death”.
This is an extremely good take - anyone who invests in a syndication should be completely aware of everything you mentioned.
I think it would be really interesting to see how ODC and some of these other failing/struggling syndications stack up as far as their fees, equity and their due diligence based on how the interest rate can affect property valuation which can in turn affect your equity %.
I'm sure there's sone stress involved - but if they take an upfront fee, they make their $ either way.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Don Konipol:
Here’s my take on syndication. Please remember that this is coming from someone who has been in the syndication business for over 25 years, and a real estate investor 50 years.
The vast majority of syndications have fees “off the top” averaging 15% +. So investing $100k you’ve already lost $15k. You’re down to $85k BEFORE you start!
The majority of syndications utilize leverage of 60% +. So, you as investor now have have 25% equity with 75% debt after accounting for upfront “fees” by syndicator and third parties.
If the value of the underlying property drops 25%, your equity is WIPED OUT. If values drop a more modest 12.5% HALF your equity is wiped out. And, since commercial property is valued 2/3 by Cap rate (actually, by the present value of future returns, but Cap rate is a good short cut), a rise in interest rates of say 2% from a base of 4% to 6% can result in a 100% wipe out of your equity.
So here’s my take - the fees upfront are a non starter. I’d only invest in syndicated offerings with NO of VERY LOW upfront fees and MOST of my capital going to property purchase or rehab.
That being said 60% leverage is exactly the WORST amount of leverage you can use. 50% or less and you have STAYING power. 80% or more and you have “walk away” power. In a declining market 60 - 75% leverage is a “slow death”.
here is a good article as well on debt funds and syndications and "affiliated transactions"
7e investments53 Reviews - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes1y
Quote from @Don Konipol:
Here’s my take on syndication. Please remember that this is coming from someone who has been in the syndication business for over 25 years, and a real estate investor 50 years.
The vast majority of syndications have fees “off the top” averaging 15% +. So investing $100k you’ve already lost $15k. You’re down to $85k BEFORE you start!
The majority of syndications utilize leverage of 60% +. So, you as investor now have have 25% equity with 75% debt after accounting for upfront “fees” by syndicator and third parties.
If the value of the underlying property drops 25%, your equity is WIPED OUT. If values drop a more modest 12.5% HALF your equity is wiped out. And, since commercial property is valued 2/3 by Cap rate (actually, by the present value of future returns, but Cap rate is a good short cut), a rise in interest rates of say 2% from a base of 4% to 6% can result in a 100% wipe out of your equity.
So here’s my take - the fees upfront are a non starter. I’d only invest in syndicated offerings with NO of VERY LOW upfront fees and MOST of my capital going to property purchase or rehab.
That being said 60% leverage is exactly the WORST amount of leverage you can use. 50% or less and you have STAYING power. 80% or more and you have “walk away” power. In a declining market 60 - 75% leverage is a “slow death”.
Exactly this! When the operator has already made his/her money on the front end of the deal there's a lot of incentive to scream the upside and whisper the downside. And other than the "hit to the reputation" claim of being a downside, they really don't have any risk in deals going sour so there's all kinds of incentive to structure and promise things that are virtually impossible outside of perfect conditions. There are a lot of people walking around with a lot of money that essentially became con men by maximizing their own upside and failing to provide any real risk management for their investors.
Skyline Properties
- Scottsdale, AZ · Member since 2017 · 21 posts · 18 votes1y
Does anyone else see the irony in what has happened to Brandon? Specifically, I recall the first appearance our RE lord and savior Grant Cardone made on the BP podcast where he, Brandon and Josh engaged in a heated debate on episode 250 ~40 minute mark where Grant specifically says it's flat out stupid to buy a home. Brandon disagrees, stating family structure and security reasons, conceding sure if your life goal is maximize your money, go big and buy multifamily and acquire units Genghis Khan style, but there's more important things in life.
My takeaway from Brandon in the 7 years since this podcast is, this specific conversation in episode 250 broke Brandon's brain. Since this episode, Brandon's strategy did a complete 180. Previously, he bought homes as a small mom and pop landlord the old school way, maybe a few duplexes or quads or small <10-20 unit apartments, scaling at a reasonable and responsible pace. After the Cardone interview, his primary motivation seemed to be to replicate Cardone's model, become a syndicator, collect syndication fees, screw the LTR strategy, with dreams and aspirations to acquire and manage over $1B in RE, advocating for the destruction of neighborhoods via rent by the room strategies (since all other viable models produce no yield due to FOMO/newbies jumping in/rates/prices) while selling personalized coaching services while running a prosperity gospel bible study group on the side. The level of hypocrisy and shape shifting that this once great podcast host has made really just made him extremely unlikable to me. It's been a fascinating arch to observe from afar and seems ironic to me.
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes1y
Quote from @Grant Tyler Short:
Does anyone else see the irony in what has happened to Brandon? Specifically, I recall the first appearance our RE lord and savior Grant Cardone made on the BP podcast where he, Brandon and Josh engaged in a heated debate on episode 250 ~40 minute mark where Grant specifically says it's flat out stupid to buy a home. Brandon disagrees, stating family structure and security reasons, conceding sure if your life goal is maximize your money, go big and buy multifamily and acquire units Genghis Khan style, but there's more important things in life.
My takeaway from Brandon in the 7 years since this podcast is, this specific conversation in episode 250 broke Brandon's brain. Since this episode, Brandon's strategy did a complete 180. Previously, he bought homes as a small mom and pop landlord the old school way, maybe a few duplexes or quads or small <10-20 unit apartments, scaling at a reasonable and responsible pace. After the Cardone interview, his primary motivation seemed to be to replicate Cardone's model, become a syndicator, collect syndication fees, screw the LTR strategy, with dreams and aspirations to acquire and manage over $1B in RE, advocating for the destruction of neighborhoods via rent by the room strategies (since all other viable models produce no yield due to FOMO/newbies jumping in/rates/prices) while selling personalized coaching services while running a prosperity gospel bible study group on the side. The level of hypocrisy and shape shifting that this once great podcast host has made really just made him extremely unlikable to me. It's been a fascinating arch to observe from afar and seems ironic to me.
He interviewed me a few episodes before Cardone and was talking about wanting to syndicate, asking me how I started and what I liked about it. Maybe the Cardone episode put fuel on the fire, but he had been thinking about it and exploring the idea for a long time.
- Lender · CA · Member since 2018 · 637 posts · 393 votes1y
I have always been wary of anything in real estate offering "passive returns" in excess of 10%. The age old adage if it is too good to be true it likely is. The entire benefit of real estate investing is the direct control of the asset and ability to force equity. I am not perfect and have made many very costly blunders in real estate but I will never invest in anyone's fund personally when I can do it myself and have direct control.
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesMark Twain quote “There are three kind of lies. Direct lies, indirect lies, and statistics.
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes1y
Go comment on his social media pages saying you want your money. If he doesn't feel pressure he will keep living his best life acting like a guru and get more people's money.
- Member since 2020 · 5 posts · 12 votes11mo
That is the correct URL. I joined this year and have been happy with what that community adds to my tools as a passive inventor.
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes11mo
UPDATE: they are raising around 4.5m more to buy time. If you are one of the people that put more money in, you (might) be made whole one day but not guaranteed of course. If you don't put any more in, you're probably screwed and most likely won't see anything. They are just trying to salvage what they can.
for me thinking about putting another 100k in, I would rather just drop it in crypto than open door Capital at this point. But that's just me. You live & learn.
Learning lesson: Don't take RE advice from marketers. ✔️
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes11mo
Quote from @Joey Wilson:
UPDATE: they are raising around 4.5m more to buy time. If you are one of the people that put more money in, you (might) be made whole one day but not guaranteed of course. If you don't put any more in, you're probably screwed and most likely won't see anything. They are just trying to salvage what they can.
for me thinking about putting another 100k in, I would rather just drop it in crypto than open door Capital at this point. But that's just me. You live & learn.
Learning lesson: Don't take RE advice from marketers. ✔️
I think ya'll are gonna wanna take a look at the thread below. It's incredibly eye opening how the guys at Open Door Capital are handling things.
Did Brandon Turner really lose $14M of investor money while pocketing $4.4M???
- Member since 2021 · 27 posts · 31 votes11mo
For me, the lesson learned is not to invest in passive Real Estate deals. Had I known I was investing in deals where there was a very real potential to lose everything, I would not have done it.
Many investments return the same or better with no risk of losing all your capital. These investments make no sense at all.- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes11mo"For me, the lesson learned is not to invest in passive Real Estate deals. Had I known I was investing in deals where there was a very real potential to lose everything, I would not have done it."
Quote from @Bryn Kaufman:
For me, the lesson learned is not to invest in passive Real Estate deals. Had I known I was investing in deals where there was a very real potential to lose everything, I would not have done it.
Many investments return the same or better with no risk of losing all your capital. These investments make no sense at all.
Serious question Bryn, because I truly want to understand your experience of things.
It's my understanding all of these syndications, especially those of any sizable operation, give the all-important disclosure that there is risk in the investment including up to total loss of 100%.
Are you saying you did not get such disclosure?
Or that you just glanced things over and didn't notice such?
Or that you saw it and just ignored it, thought "awh, but that won't happen to us"?
I want to understand the LP in this experience exactly as you have had. Because this is a reoccurring theme I hear.
I have ever so rarely heard any LP say they knew the risks, didn't expect it to happen but, they knew, now it's happening and it sucks.
In full disclosure I am ever so curious of your experience because I am hemming and hawing on the sidelines of opening a syndicated offering.
For the reasons of what I am seeing here.
I have seen way too many LP's burned in investments that leave me scratching my head.
I am that REI Pro who's been in the trenches, turned back LP offers, but I see a need developing for legitimate LP offerings (legit in my opinion of analysis).
What's held me back before?
I was too busy in the trenches helping investors build out individual portfolios. I have long advocated this for reasons your touching on; control and risk mitigation.
The other reasoning is I do legit REI. Rarely are the offerings with half the "pizazz" I have seen popularized syndicated deals presenting.
Much of what I do would be coined as "boring". And that's exactly why they work. Good solid deals are rarely "all that jazz".
But as said, I am seeing people get burned seemingly left right and center.
And while I kind of get it, rates changed. But for me, that's kind of a BS excuse because I think a good operator should have seen that coming, I did, many did, it was kind of simple math really. And if a deal didn't work at forecasted future rates during anticipated hold, well then what the heck, it's a setup for failure.
This is the math I was using during that time, we used 7.45% as a basis for analysis not the rates we were getting at the time. Plan for the worst, work for the best.
- Rental Property Investor · Boise, ID · Member since 2014 · 49 posts · 36 votes10mo
When the investment is down and the situation is dire you find out the real character/integrity of the investment managers. They will either dig into the grind of making the investment viable again to protect their investors money or they shirk responsibility and launch the next venture to enrichment themselves. I am neither invested in these deals nor have I read into all the details of Open Door but it does not look promising. The leadership of Realty Shares, also highly marketed on BP, followed a similar approach a few years ago leaving their investors out in the cold and with significant losses. It is a good lesson in diversification when investing in syndications. Spread the money among a few different deals with different operators.
- 10moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Nathan Carter:
When the investment is down and the situation is dire you find out the real character/integrity of the investment managers. They will either dig into the grind of making the investment viable again to protect their investors money or they shirk responsibility and launch the next venture to enrichment themselves. I am neither invested in these deals nor have I read into all the details of Open Door but it does not look promising. The leadership of Realty Shares, also highly marketed on BP, followed a similar approach a few years ago leaving their investors out in the cold and with significant losses. It is a good lesson in diversification when investing in syndications. Spread the money among a few different deals with different operators.
Nav got booted by the VC guys that invested with them..
- Minneapolis, MN · Member since 2018 · 33 posts · 53 votes8mo
7-month update: still $0 returned.
I invested $100k into a syndication in 2021. Years later, total distributions are effectively nothing ($355), and capital recovery is uncertain.
What’s hard to reconcile is seeing continue to teach and coach people on real estate success while this has been the outcome for LPs in this deal.
Not trying to stir drama, just sharing real results for anyone doing due diligence.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes8mo
Quote from @Joey Wilson:
7-month update: still $0 returned.
I invested $100k into a syndication in 2021. Years later, total distributions are effectively nothing ($355), and capital recovery is uncertain.
What’s hard to reconcile is seeing continue to teach and coach people on real estate success while this has been the outcome for LPs in this deal.
Not trying to stir drama, just sharing real results for anyone doing due diligence.
I do not disagree, I saw an ad last night for some conference speaking at and selling tickets. I would guess that at these conferences they do not talk about the millions of dollars of $ they are losing at this point in time.
7e investments53 Reviews - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes8mo
Quote from @Chris Seveney:
Quote from @Joey Wilson:
7-month update: still $0 returned.
I invested $100k into a syndication in 2021. Years later, total distributions are effectively nothing ($355), and capital recovery is uncertain.
What’s hard to reconcile is seeing continue to teach and coach people on real estate success while this has been the outcome for LPs in this deal.
Not trying to stir drama, just sharing real results for anyone doing due diligence.
I do not disagree, I saw an ad last night for some conference speaking at and selling tickets. I would guess that at these conferences they do not talk about the millions of dollars of $ they are losing at this point in time.
Of course not. Brand Turner is too busy telling people how Christian he is and how much he loves helping people.
- 8moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Joey Wilson It is the responsibility of the LP to perform their own diligence as well. From the information shared in these forums there were clear red flags related to the capital stack and investment thesis. In an earlier post you mentioned deciding between investing with ODC and Grant Cardone. Clearly you made investment decisions based on name recognition and not the underlying real estate. Next time focus on the merits of the underlying real estate.
- 8moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
If people are willing to invest thousands of dollars as an LP in ODC due to Brandon's name recognition, it shouldn't come as a surprise there's even more willing to pay for his education which is a lower cost of entry product.
- Member since 2021 · 27 posts · 31 votes8mo
For anyone reading this, do not invest in any syndication in my opinion.
The risk of it going to $0, which in this case it is, vs. the reward, just does not make sense.
There are so many things you can invest in without risking losing everything.
As a matter of fact, it is not easy to find investments this bad that go to $0.
This is like a Meme Coin investment, but fools you by thinking you are investing in something solid like Real Estate.- 8moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Bryn Kaufman:
For anyone reading this, do not invest in any syndication in my opinion.
The risk of it going to $0, which in this case it is, vs. the reward, just does not make sense.
There are so many things you can invest in without risking losing everything.
As a matter of fact, it is not easy to find investments this bad that go to $0.
This is like a Meme Coin investment, but fools you by thinking you are investing in something solid like Real Estate.Not all syndications take on max debt.. so in my mind its case by case. and a deep dive into the offering before investing. But for sure dont invest because someone has a lot of SM creds
- 8moIan IppolitoBusiness MemberInvestor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
Quote from @Bryn Kaufman:
For anyone reading this, do not invest in any syndication in my opinion.
The risk of it going to $0, which in this case it is, vs. the reward, just does not make sense.
There are so many things you can invest in without risking losing everything.
As a matter of fact, it is not easy to find investments this bad that go to $0.
This is like a Meme Coin investment, but fools you by thinking you are investing in something solid like Real Estate.I completely understand why someone who just took a large, realized loss would feel this way. After something goes to zero, it’s very natural to say “never again.”
That said, I don’t think it’s accurate to conclude that all syndications are fundamentally broken or comparable to meme coins.
I have a seven-figure portfolio in syndications/real estate crowdfunding and invested in multiple deals around the same time OpenDoor launched. None of those investments experienced any realized losses (let alone suffered a total collapse like this one did).
And I passed on Open Door due to what I felt were specific red flags that were present from day one such as:1) Inadequate skin the game (co-investment)...which ordinarily aligns the sponsor with investors.
2) Standard, critical info missing from the pitch deck that are required to understand the deal and the risk being taken (sponsor skin in the game, information on the debt, etc)
3) Too little experience: Sponsor didn't have experience across a full real-estate cycle (with little to no money lost).4) Heavy “financial engineering” to make projected returns look better (which increases risk) instead of relying on boring, simple fundamentals (buying good real-estate at reasonable prices).
5) Deals marketed aggressively to newer / less experienced investors (which experienced sponsors don't need to do, because they've already built up an organic following).
Good real estate is usually pretty boring. Simple capital structures, conservative debt, and realistic assumptions don’t make for the highest projected returns— but they also don’t tend to blow up as easily either.
And the math on large losses is unforgiving: a 90% loss takes a 900% gain to break even. IMO the key is to work as hard as possible to avoid large losses (rather than working as hard as possible to get deals with the highest projected returns).Bottom line: it's totally fair for someone to decide syndications aren’t for them after a horrible experience like this. I just don’t think it’s accurate to say they’re ALL inherently no different than gambling or meme coins.
The Real Estate Crowdfunding Review - Member since 2021 · 27 posts · 31 votes8mo
Quote from @Ian Ippolito:
Quote from @Bryn Kaufman:
For anyone reading this, do not invest in any syndication in my opinion.
The risk of it going to $0, which in this case it is, vs. the reward, just does not make sense.
There are so many things you can invest in without risking losing everything.
As a matter of fact, it is not easy to find investments this bad that go to $0.
This is like a Meme Coin investment, but fools you by thinking you are investing in something solid like Real Estate.I completely understand why someone who just took a large, realized loss would feel this way. After something goes to zero, it’s very natural to say “never again.”
That said, I don’t think it’s accurate to conclude that all syndications are fundamentally broken or comparable to meme coins.
I have a seven-figure portfolio in syndications/real estate crowdfunding and invested in multiple deals around the same time OpenDoor launched. None of those investments experienced any realized losses (let alone suffered a total collapse like this one did).
And I passed on Open Door due to what I felt were specific red flags that were present from day one such as:1) Inadequate skin the game (co-investment)...which ordinarily aligns the sponsor with investors.
2) Standard, critical info missing from the pitch deck that are required to understand the deal and the risk being taken (sponsor skin in the game, information on the debt, etc)
3) Too little experience: Sponsor didn't have experience across a full real-estate cycle (with little to no money lost).4) Heavy “financial engineering” to make projected returns look better (which increases risk) instead of relying on boring, simple fundamentals (buying good real-estate at reasonable prices).
5) Deals marketed aggressively to newer / less experienced investors (which experienced sponsors don't need to do, because they've already built up an organic following).
Good real estate is usually pretty boring. Simple capital structures, conservative debt, and realistic assumptions don’t make for the highest projected returns— but they also don’t tend to blow up as easily either.
And the math on large losses is unforgiving: a 90% loss takes a 900% gain to break even. IMO the key is to work as hard as possible to avoid large losses (rather than working as hard as possible to get deals with the highest projected returns).Bottom line: it's totally fair for someone to decide syndications aren’t for them after a horrible experience like this. I just don’t think it’s accurate to say they’re ALL inherently no different than gambling or meme coins.
My point about Meme Coins is that they also go to $0.
Why invest in something that can go to $0 when there are tons of safer investments that you know will never go to $0?
Maybe you did 19 out of 20 checks on the deal to make sure everything is right, but the one check you missed turns out to be critical, and your deal blows up and goes to $0.
So, from now on, I will stick to investments that can't go to $0. It feels a lot safer, and really, if I thought for even a second that this could go to $0, I would not have invested in it.
I hope you never have to experience this, and I also have other passive Real Estate investments that are still OK, but the fact that this one went to $0 really scared me. - 8moIan IppolitoBusiness MemberInvestor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
Quote from @Bryn Kaufman:
Quote from @Ian Ippolito:
Quote from @Bryn Kaufman:
For anyone reading this, do not invest in any syndication in my opinion.
The risk of it going to $0, which in this case it is, vs. the reward, just does not make sense.
There are so many things you can invest in without risking losing everything.
As a matter of fact, it is not easy to find investments this bad that go to $0.
This is like a Meme Coin investment, but fools you by thinking you are investing in something solid like Real Estate.I completely understand why someone who just took a large, realized loss would feel this way. After something goes to zero, it’s very natural to say “never again.”
That said, I don’t think it’s accurate to conclude that all syndications are fundamentally broken or comparable to meme coins.
I have a seven-figure portfolio in syndications/real estate crowdfunding and invested in multiple deals around the same time OpenDoor launched. None of those investments experienced any realized losses (let alone suffered a total collapse like this one did).
And I passed on Open Door due to what I felt were specific red flags that were present from day one such as:1) Inadequate skin the game (co-investment)...which ordinarily aligns the sponsor with investors.
2) Standard, critical info missing from the pitch deck that are required to understand the deal and the risk being taken (sponsor skin in the game, information on the debt, etc)
3) Too little experience: Sponsor didn't have experience across a full real-estate cycle (with little to no money lost).4) Heavy “financial engineering” to make projected returns look better (which increases risk) instead of relying on boring, simple fundamentals (buying good real-estate at reasonable prices).
5) Deals marketed aggressively to newer / less experienced investors (which experienced sponsors don't need to do, because they've already built up an organic following).
Good real estate is usually pretty boring. Simple capital structures, conservative debt, and realistic assumptions don’t make for the highest projected returns— but they also don’t tend to blow up as easily either.
And the math on large losses is unforgiving: a 90% loss takes a 900% gain to break even. IMO the key is to work as hard as possible to avoid large losses (rather than working as hard as possible to get deals with the highest projected returns).Bottom line: it's totally fair for someone to decide syndications aren’t for them after a horrible experience like this. I just don’t think it’s accurate to say they’re ALL inherently no different than gambling or meme coins.
My point about Meme Coins is that they also go to $0.
Why invest in something that can go to $0 when there are tons of safer investments that you know will never go to $0?
Maybe you did 19 out of 20 checks on the deal to make sure everything is right, but the one check you missed turns out to be critical, and your deal blows up and goes to $0.
So, from now on, I will stick to investments that can't go to $0. It feels a lot safer, and really, if I thought for even a second that this could go to $0, I would not have invested in it.
I hope you never have to experience this, and I also have other passive Real Estate investments that are still OK, but the fact that this one went to $0 really scared me.That makes total sense — and honestly, I don’t think you’re being irrational at all.
After you personally experience something going to zero, the risk stops being theoretical. It becomes visceral. Wanting to avoid anything that can plausibly hit $0 is a very human reaction, and for some investors it’s absolutely the right long-term choice.
Where I’d gently add nuance is this:
Almost all return-seeking investments can go to $0 under the wrong combination of leverage, structure, management, timing and bad luck — public stocks included. Individual stocks, banks, REITs, oil & gas partnerships, venture funds, even “blue chip” names have all gone to zero at different points in history. The difference is that in public markets, that risk can be spread out and often hidden inside an index.
Syndications make that risk more concentrated and visible, which cuts both ways:
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1) You can have very conservative, boring structures that have very little chance of going to zero.
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2) You can also have deals that have a high chance of going to zero in a downturn (like this).
I tend to focus less on upside and more on loss-avoidance: simple capital structures, conservative debt, real sponsor co-investment, and strategies that have survived full cycles. Those don’t eliminate risk — but they dramatically reduce the odds of catastrophic loss.
But your point about “missing one critical check” is also right. So syndications aren't for everyoneThat said, deciding “I never want to be in a position where I could see $0 again” is a perfectly valid line to draw. For many people, the psychological cost alone isn’t worth it. And a person can invest in index fund. It's return could be alot more volatile than other investments from year to year....but the go-to $0 risk is usually very small.
The Real Estate Crowdfunding Review -
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