Quote from @Josh C.:
@Shiloh Lundahl, unsure you understand the facts but I'll simplify due to timing. He took a 4 mil fee for buying an asset. He lost 100% of LP equity on this same asset. He then starting selling a course saying don't be careful when in investing in real estate.
why are you defending him?
I can't post about sometime I've not paid someone back I've promised too as it's never happened. The vast majority of investors would say the same thing. Filing bankruptcy, defaulting on loans, and losing all of your investors money is a big deal. Not the norm.
if he lost all the investors money he should pay his 4MM fee back and then sell a course saying "I screwed up and here's why", not teaching more recklessness and keeping his end.
If you went into business with someone and the deal went bad wouldn't you at least want it to go bad for both you and not just you?
So when you are investing, it is important that you are able to compartmentalize things. You are saying he took a 4 million dollar fee while other people lost their money. And you are saying that this is bad. But I need to tell you that this happens all of the time. When you buy stocks, a broker gets paid even if the stock goes down. So you lose money while the broker still gets paid because the broker is getting paid for the service.
If his fees were not disclosed, then there is a problem. If his fees were disclosed, and he did not commit any type of fraud, then there isn't a problem.
When investing into someone else's deal, there are 3 parts. There is the asset, there is the operator, and there is the market. You can vet the asset. You can vet the operator. But then you guess on the market. What you are saying is that because there was a loss of the investor's capital, that it is Brandon's fault and that he should not have made money. If that is how the pitch deck and the investment documents stated that things should go, then I agree with you. However, if Brandon did his job correctly and operated the asses as described, and the asset was as described, but the market took a drastic turn (which it did when interest rates skyrocketed) what you are stating is that he should not get paid for the work he did because the result didn't produce what the expectations were. Would you also say that the people who did the exact same things that Brandon did a few years back with a more favorable market that paid their investors out at 18% - 21% which was higher than their estimated 15% (again because of a favorable market) should have just paid out their investors the 15% and kept all of the extra upside? The investors were investing in a syndication. They weren't lenders on the deal. If they were lenders then they should get their money back plus the interest according to whatever the contract states. But if they are investors, and if they are accredited investors, which I believe they should have been, then they should have understood the risk, they should have vetted Brandon and the asset, and they should have better predicted the market.
So, if Brandon did not operate the asset according to the investment document, then yes, I agree, he should give any gain he got from the deal back and more. But if he did operate the asset according to plan and the market shifted causing a loss for the investors, then no, he should have no reason to forfeit the payment for his work just because the asset lost money.
As far as you quoting the ad by stating "don't be careful when in investing in real estate." The ad doesn't state that. The ad states, "Careful Investors Often Miss the Biggest Opportunities." which has a different meaning. There are a lot of investors who are overly cautious and that keeps them from ever getting into the investing game. They miss out on most opportunities because they are risk averse. Other investors get into the investing game and may win some and lose some. But with every win and every loss, they learn how to improve their investing. I agree with that being too careful may keep people from ever getting into the game. It is unlikely that investors will always win at guessing the market. It is up to them to underwrite the assets and be a good operator and do their best to guess the market.
If these concepts are difficult for you or if you just don't like them, then investing in other people's deals may not be the best option for you. I personally just invest in my own deals because I get the best returns there and I am able to get mad at only myself when they go bad. But they are much smaller deals and have lower risk.
