Pulling cash out of a syndication

[Menachem Krasnjanski]

I invested in a syndication in April of 2022 that was projected to give me an 18 percent return for 4 years after which I would be refinanced out on a waterfall and left with 5 percent of the deal post the waterfall as long as the deal is owned by the GP. The deal hasn't performed up to projections and the GP has offered to pay me back my original capital plus 12 percent to buy me out of the deal. My question is whether it makes sense to keep the capital in the deal banking on it performing better long term and the retention of 5 percent of the deal after the waterfall as a long term asset, or if it makes sense to take the capital back and put it into my own deals (my partners and I are currently working on buying a hotel and I could use the capital to get myself equity and to help us close the deal).

[Chris Seveney]

Quote from @Menachem Krasnjanski:

I invested in a syndication in April of 2022 that was projected to give me an 18 percent return for 4 years after which I would be refinanced out on a waterfall and left with 5 percent of the deal post the waterfall as long as the deal is owned by the GP. The deal hasn't performed up to projections and the GP has offered to pay me back my original capital plus 12 percent to buy me out of the deal. My question is whether it makes sense to keep the capital in the deal banking on it performing better long term and the retention of 5 percent of the deal after the waterfall as a long term asset, or if it makes sense to take the capital back and put it into my own deals (my partners and I are currently working on buying a hotel and I could use the capital to get myself equity and to help us close the deal).

 Take your money out now as any syndication that projects 18% in today's environment is going to be very disappointing.