Ashcroft capital - Paused Distributions
Member since 2020 · 9 posts · 8 votes
Ashcroft capital - Paused Distributions
Most Popular Reply
Melanie P.Pro Member
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votesI guess there are about 20 suckers born every minute. Every one of you in this is an accredited investor, right? A two-second glance at their materials reveals that when they distribute funds from a property sale one of the categories is: unpaid distributions. This has been the plan since the start.
Investing in real estate is not that hard. I can't imagine what would make anyone put their money into one of these things. Pure laziness I guess. TBills are paying over 5% if you need lazy guys. No need for this nonsense.
248 Replies
- Member since 2021 · 53 posts · 26 votes2y
Quote from @Carlos Ptriawan:
Quote from @Chris Seveney:
Quote from @Carlos Ptriawan:
Quote from @Account Closed:
Anyone else getting notified this morning of paused Ashcroft distributions due to refinancing issues?
We have been working on refinancing the asset in order to access the equity and create liquidity to earnestly restart the renovations. The new lender we initially signed up with for the refinance notified us that they would not be able to provide the new loan at the agreed upon terms due to current market volatility.
We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months. To remain conservative with liquidity and continue increasing NOI through unit renovations, we are pausing distributions beginning this month. Your preferred return will continue to accrue and will be paid at the next capital event, or when cash flow allows.
While distributions are on pause, we are not collecting its asset management fee and Birchstone Residential is collecting a reduced property management fee.
70/80% of syndications are in trouble in 2024. Especially if they have multiple portfolio in asset structure.
You would lose money 100% for sure. What we don't know whether you lose 50% or lose 100%.actually you can lose MORE THAN 100% if they took accelerated depreciation, you may end up owing more than your investment. That happened I believe on those houston deals.
Another way they are doing it is by creating next series of fund , like ponzi, the next fund investor is subsidizing the asset of previous fund.
or the most brutal way is basically bankrupt the current LP, and buy again the same asset from the lender with new cap with the new lpConsidering the current real estate environment and the frothy stock market, I’m considering taking a fairly large position in a diversified debt fund (notes) like offerings by PPR Capital (10% dividend, 1 year hold) https://pprcapitalmgmt.com/strategy/
and would like opinions on comparing risk for something like this vs syndications and other alt investments. To me the notes seem far less risky with the pretty large geographically diverse holdings, but am I wrong about that? What is the black swan event to worry about? How can I lose my money?
- Investor · Bucks County · Member since 2023 · 196 posts · 156 votes2y
Would others agree syndications that are geared towards new development where value is being created has more upside than merely investing in multi-family syndications that may or may not recieve phsyical upgrades and perhaps new property management? If I am beginning to familiarize myself more with the real estate industry and would rather just own a duplex than a small percentage of a larger multi-family buildings. Besides the passiveness is there something else I am missing?
- 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votes
Quote from @Bryan H.:
Quote from @Carlos Ptriawan:
Quote from @Chris Seveney:
Quote from @Carlos Ptriawan:
Quote from @Account Closed:
Anyone else getting notified this morning of paused Ashcroft distributions due to refinancing issues?
We have been working on refinancing the asset in order to access the equity and create liquidity to earnestly restart the renovations. The new lender we initially signed up with for the refinance notified us that they would not be able to provide the new loan at the agreed upon terms due to current market volatility.
We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months. To remain conservative with liquidity and continue increasing NOI through unit renovations, we are pausing distributions beginning this month. Your preferred return will continue to accrue and will be paid at the next capital event, or when cash flow allows.
While distributions are on pause, we are not collecting its asset management fee and Birchstone Residential is collecting a reduced property management fee.
70/80% of syndications are in trouble in 2024. Especially if they have multiple portfolio in asset structure.
You would lose money 100% for sure. What we don't know whether you lose 50% or lose 100%.actually you can lose MORE THAN 100% if they took accelerated depreciation, you may end up owing more than your investment. That happened I believe on those houston deals.
Another way they are doing it is by creating next series of fund , like ponzi, the next fund investor is subsidizing the asset of previous fund.
or the most brutal way is basically bankrupt the current LP, and buy again the same asset from the lender with new cap with the new lpConsidering the current real estate environment and the frothy stock market, I’m considering taking a fairly large position in a diversified debt fund (notes) like offerings by PPR Capital (10% dividend, 1 year hold) https://pprcapitalmgmt.com/strategy/
and would like opinions on comparing risk for something like this vs syndications and other alt investments. To me the notes seem far less risky with the pretty large geographically diverse holdings, but am I wrong about that? What is the black swan event to worry about? How can I lose my money?
Are you crazy? They're all over the place. First it's how specific they are, note experts, if you will with the broadest criteria for acquiring notes possible. Very next slide they're buying commercial real estate, with leverage, NOT something I want to be doing in 2024. Then you've got the 16 year track record, yet somehow after all that time they don't have a single investment product that is safe enough for a non accredited investor to buy into. Real winners over there! Ready to take your cash.
My advice is - don't be afraid of the little bit of elbow grease it takes to far outpace these clown's returns and leave yourself a nice asset at the end of your hard work.
- 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votesSyndications are geared toward the syndicator. Which is why they have to spend so much money on fancy websites and charming salespeople who know what to say to get you hard or wet over the phone.
Quote from @Sebastian Bennett:
Would others agree syndications that are geared towards new development where value is being created has more upside than merely investing in multi-family syndications that may or may not recieve phsyical upgrades and perhaps new property management? If I am beginning to familiarize myself more with the real estate industry and would rather just own a duplex than a small percentage of a larger multi-family buildings. Besides the passiveness is there something else I am missing?
- Member since 2019 · 7k+ posts · 4k+ votes2yYou would lose money very quick with ground dev investing . go ahead it is not my money.
Quote from @Sebastian Bennett:
Would others agree syndications that are geared towards new development where value is being created has more upside than merely investing in multi-family syndications that may or may not recieve phsyical upgrades and perhaps new property management? If I am beginning to familiarize myself more with the real estate industry and would rather just own a duplex than a small percentage of a larger multi-family buildings. Besides the passiveness is there something else I am missing?
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes2y
First I want to say that multifamily was on a cycle high 5 years ago. Now a lot of that is tapped out. If you look at projections many outfits are paying almost nothing in the hopes of a return years down with the pro-forma.
I personally would be very skittish of those type of deals right now.
My syndications I focused on value add dark retail NNN buildings to re-purpose. They have higher growth equity multiple potential.
Currently I am more focused on core plus NNN buying all cash. High profile locations with investment grade credit tenants or strong private credit if available. 5% preferred return annually plus splitting of cash flow over that mark. I like buying all cash because we are not controlled by the debt market or what interest rates are. Those large debt deals you can win big or lose your %ss.
My deals aren't super sexy for returns by they do not have to be. Occasionally you can achieve cap rate compression for growth or the building comes with extra land for some value add but that's not a given. Multifamily on the other hand is heavily economic cycle, debt cycle dependent on exit.
Why do syndicators take on debt? So they have to raise less capital and can buy quicker and faster leveraging debt. In low interest rate times they can look like champions if they buy right but they can also lose it all in turbulent rate times.
( I am not talking about this company but in generalities ). I think it's good they are communicating. Lots of syndicators got mentored up with these multifamily type properties and were buying anything anywhere. That time is gone now nationally for multifamily. You better make darn sure you have a stellar location with tons of demand to rent so that the rehab matches the rent growth to NOI with what jobs are paying in the area. The rest are likely to get hammered hard in coming years.
Some of my friends that are long time with multifamily have pencils down right now unless a loan to assume in the 3's or 4's with rate and those get like 10 offers from syndicators when they hit the market.
- Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes2yGround up?...There should be a ton more value created for the additional risk you take on.
Quote from @Sebastian Bennett:
I've seen 3 ground up deals this week that are in severe trouble even before the ground breaks.
They may get finished, but lease up is going to be very very tough for them. One had a final projected cost of about $300K per door, while another 98% occupied building about a mile away and maybe 5 years old selling for $130K a door. The 300K/door is from a 1st time developer and I think their second deal. Development is risky even for the very experienced. I've seen so many developers get 100% wiped out and they were often very experienced and pretty sharp people with a lot of experience. The amateurs....too many around that made money in 2019 in 1-2-3 syndication deals and now thing they are ready for the big leagues. One of the presentations I heard recently had so many flaws it was embarrassing. Didn't seem to know the difference between occupancy and vacancy....didn't understand the word "submarket" and so many other issues. I felt really bad for them as it was mostly retired people I am sure sunk their life savings into these projects as sponsors and LPs and thought they were going to hit home runs and really enjoy retirement. Instead I expect them to be wiped out. - Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes2y
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward. I think if most can survive another 12-18 months, you'll be in good shape, and maybe if the deal can last 2-5 more years, you'll be in fantastic shape. Hopefully these great capital raisers will be great asset managers. I think the people that will really struggle will be the amateurs...who work other jobs, who don't know how to walk vacant doors, who don't stay on top of leasing and renewals and don't know about retention. These days the AM probably needs to be at the property weekly to get thru the crunch in many cases unless you just have an unusual or outstanding PM team. I expect most if not all of the Ashcroft assets will survive and thrive in the years to come. You may not get the 20-30% IRR you might have expected, but you'll probably still earn better than stock market...and certainly much more than lazy t-bills. All those suckers that put money in T-bills will be crying in 2-3 years.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Joel Owens:
First I want to say that multifamily was on a cycle high 5 years ago. Now a lot of that is tapped out. If you look at projections many outfits are paying almost nothing in the hopes of a return years down with the pro-forma.
I personally would be very skittish of those type of deals right now.
My syndications I focused on value add dark retail NNN buildings to re-purpose. They have higher growth equity multiple potential.
Currently I am more focused on core plus NNN buying all cash. High profile locations with investment grade credit tenants or strong private credit if available. 5% preferred return annually plus splitting of cash flow over that mark. I like buying all cash because we are not controlled by the debt market or what interest rates are. Those large debt deals you can win big or lose your %ss.
My deals aren't super sexy for returns by they do not have to be. Occasionally you can achieve cap rate compression for growth or the building comes with extra land for some value add but that's not a given. Multifamily on the other hand is heavily economic cycle, debt cycle dependent on exit.
Why do syndicators take on debt? So they have to raise less capital and can buy quicker and faster leveraging debt. In low interest rate times they can look like champions if they buy right but they can also lose it all in turbulent rate times.
( I am not talking about this company but in generalities ). I think it's good they are communicating. Lots of syndicators got mentored up with these multifamily type properties and were buying anything anywhere. That time is gone now nationally for multifamily. You better make darn sure you have a stellar location with tons of demand to rent so that the rehab matches the rent growth to NOI with what jobs are paying in the area. The rest are likely to get hammered hard in coming years.
Some of my friends that are long time with multifamily have pencils down right now unless a loan to assume in the 3's or 4's with rate and those get like 10 offers from syndicators when they hit the market.
buying with all cash is very smart thing to do, once I raised this question to my GP why don't you just buy cash and hold for 10 years, the guy got mad at me LOL
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO. - Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 796 votes2y
PPR is a good company. I have some money with them. They have been around for a few decades so they know what a recession is like. In general mortgage notes are less risky than traditional syndications that are trying to flip a property. There are no capital calls, Bogus IRR returns, or having to chase the owners for an update.
- Rental Property Investor · Hohenfels, Germany · Member since 2018 · 70 posts · 42 votes2y
Quote from @Pretty Khare:
Quote from @Account Closed:
I know of a couple of syndicators that have had capital calls. They were up front about it, they and no one else likes it, but with the jump in rates, it is not surprising.Quote from @Account Closed:
Anyone else getting notified this morning of paused Ashcroft distributions due to refinancing issues?
We have been working on refinancing the asset in order to access the equity and create liquidity to earnestly restart the renovations. The new lender we initially signed up with for the refinance notified us that they would not be able to provide the new loan at the agreed upon terms due to current market volatility.
We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months. To remain conservative with liquidity and continue increasing NOI through unit renovations, we are pausing distributions beginning this month. Your preferred return will continue to accrue and will be paid at the next capital event, or when cash flow allows.
While distributions are on pause, we are not collecting its asset management fee and Birchstone Residential is collecting a reduced property management fee.
@Account Closed @Jim Peret Have the distributions been resumed by Ashcroft and ODC or not yet? thanks
Not yet, at least for AVAF2. I'm in an ODC fund and they have been paying monthly, though only 1.67% of invested funds
- Member since 2019 · 7k+ posts · 4k+ votes2y
Realdeal dotcom is talking big in this subject. First they talk about how Adam Neuman group+YieldStreet+a6z Andreseen Horowitz. they trying to lure new investor (via Yieldstreet) via debt capital stack 8% rate to buy rate caps for Nashville Apartment. Their DSCR was 0.8.
Like what we discusssed yesterday, the new investor is becoming the bridge lender HAHA lol.... smart and crazy, only good for GP but LP gets slaughtered.
For Ashcroft capital, they stopped distribution because they would use the capital to purchase the rate cap.... for $18million LOL
The madness in this industry continues.Some of these cowboys in GP was still in highschool when 2008 collapse happened.
- Investor · Hillsboro, OR · Member since 2016 · 304 posts · 153 votes2y
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
- Investor · Hillsboro, OR · Member since 2016 · 304 posts · 153 votes2y
Todays blog post on BP :
Real Estate Investing For Beginners January 13, 20246 Low-Risk Real Estate Investing Strategies
#2. Syndications !
That's kinda embarassing, yeah?
Real Estate Investing For BeginnersJanuary 13, 20246 Low-Risk Real Estate Investing Strategies - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Christie Gahan:
Todays blog post on BP :
Real Estate Investing For Beginners January 13, 20246 Low-Risk Real Estate Investing Strategies
#2. Syndications !
That's kinda embarassing, yeah?
Real Estate Investing For BeginnersJanuary 13, 20246 Low-Risk Real Estate Investing StrategiesThose kid that wrote article many times are still high school when Latam Crisis happened in 1980, Asian Debt Crisis in 1990, dotcom crash of 2001, subprime mortgage of 2008 and Commercial Real Estate crash of 2023 LOL , the story is always the same.
There're A LOT of irresponsible fund manager even for large company as big as PIMCO/Blackrock, they just wanna get commision and give risk to investor while they reap the most benefit.
- Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes2y
Yeah, that is funny. Sorry, but that's what you get with being so focused in one segment and having to "sell" what they have. Thanks for bring that up!
- Investor · Indianapolis, IN · Member since 2018 · 1k+ posts · 756 votes2y
Quote from @Account Closed:
I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this.
If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension. - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom). - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom).Ok.... Let me interject a different line of thinking here. I'm going to try and take this conversation from black 7 white, into "Technicolor" and see if vision in this full spectrum doesn't help reframe some mindsets.
Q: What year did the 401(k) come into existence?
A: Nov 1978. So, for argument sake, let's say 1979 because that's really the first year of it.
So knowing the obvious, that such a thing takes an industry some time to adopt into it's actions.
Q: What did the stock market do for the previous 15 years, before 401(k) "gimmick" started?
A: Down. Down BIG time. No, not just big, Mt Everest BIG time. DOW from 9k in '66' all the way too 3k's when 401(k) was introduced.
Q: And then what?
A: Things kept going down, until..... By mid '82' thing's changed direction. Oh how they changed direction. From '82' too 2000 (yes you read that right) was a bull-run unlike ANYTHING EVER seen before, touching on 20k.
What changed?
Yes, post WWII there was a very similar bull-run, because of the obvious down from WORLD WAR, and the obvious rally from NO WORLD WAR and the bizonkers commerce explosion that rebuilding from WORLD WAR made. But this, '80's, '90's, there was nothing remotely close to that..... so what changed?
And for nearly a decade things held in the range.
Even '08' was not able to bring things below 10k....... Total global financial system meltdown, and result was nearly 4x market $ of early 80's..... How?
And post '08', which duration of '08' on chart's now looks more like a sneeze in it's duration, but what after? Another bull-run tapping on 40k. FOURTY THOUSAND! Think on that, 16X early 80's! Did 2021 feel like 16X the commerce from '82'? Did incomes feel 16X? Did all of life seem 16X MORE, bigger, richer????
What changed?
Q: Who is Wall Street???? Who is "The Stock market"????
A: TRADERS!
It's honestly that simple, all boils back to this simple fundamental. Wall Street is TRADERS.
Q: Why are they called TRADERS?
A: Because they TRADE!
The greatest delusion ever pulled off in human history thus far is the notion that $ goes to Wall Street to INVEST, to GROW, to RETURN, to PROFIT......
NO! $ goes to Wall Street to TRADE.
Traders trade. That is there singular purpose in existence, everything else is ONLY to facilitate or in part and parcel to that purpose.
When 401(k) happened, it was a GIANT fire-hose of not just NEW-$ to Trade, it was DUMB-$ to boot! $ that was ignorant of the system, because it was from the average John/Jane Doe who were knowledgeable and informed on everything involved in there sphere of life, in REAL life, groceries, fixing a mower, there job's, raising kid's, LIFE, not trading.
And Middle America was sold a dream. The dream of secure a financial future by trusting traders. They called it the American Economics machine, they called it this that and the other but NEVER once did they call it exactly what it is, TRADING.
And Generations were brainwashed into this blind trust, as traders honed there craft on how to maximize what they do, TRADING, to profit as maximally as possible, on this ignorant-$.
And an entire universe was built in the financial industry. A universe of gaining gargantuan wealth, via ignorant-$. The Wolf of Wall Street was born of this paradigm shift, Bernie "the bastard" Madoff was it's love child given unto the world.
Previous to all this, Wall Street, "Trading" was a boring, slow, slodge of those who as saying said wore ties so it would be more expedient when choose to hang themselves. it was nothing, NOTHING like the verse it became.
Today, we see the exact same expression in syndications. Since pandemic "ignorant-$" went throwing itself around, it is any surprise some Traders went and got into real estate?
Lazy $ get's abused, always has, always will.
This is the REALITY of the world. A market open for ignorant $, will abuse and neglect the vast majority of it. Don't believe me, just visit a Walmart and ask the Senior greeting people at the door how there 401(k) worked out for em.
I know how it worked out for Klaus.
- Investor · Hillsboro, OR · Member since 2016 · 304 posts · 153 votes2y
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom).Ok.... Let me interject a different line of thinking here. I'm going to try and take this conversation from black 7 white, into "Technicolor" and see if vision in this full spectrum doesn't help reframe some mindsets.
Q: What year did the 401(k) come into existence?
A: Nov 1978. So, for argument sake, let's say 1979 because that's really the first year of it.
So knowing the obvious, that such a thing takes an industry some time to adopt into it's actions.
Q: What did the stock market do for the previous 15 years, before 401(k) "gimmick" started?
A: Down. Down BIG time. No, not just big, Mt Everest BIG time. DOW from 9k in '66' all the way too 3k's when 401(k) was introduced.
Q: And then what?
A: Things kept going down, until..... By mid '82' thing's changed direction. Oh how they changed direction. From '82' too 2000 (yes you read that right) was a bull-run unlike ANYTHING EVER seen before, touching on 20k.
What changed?
Yes, post WWII there was a very similar bull-run, because of the obvious down from WORLD WAR, and the obvious rally from NO WORLD WAR and the bizonkers commerce explosion that rebuilding from WORLD WAR made. But this, '80's, '90's, there was nothing remotely close to that..... so what changed?
And for nearly a decade things held in the range.
Even '08' was not able to bring things below 10k....... Total global financial system meltdown, and result was nearly 4x market $ of early 80's..... How?
And post '08', which duration of '08' on chart's now looks more like a sneeze in it's duration, but what after? Another bull-run tapping on 40k. FOURTY THOUSAND! Think on that, 16X early 80's! Did 2021 feel like 16X the commerce from '82'? Did incomes feel 16X? Did all of life seem 16X MORE, bigger, richer????
What changed?
Q: Who is Wall Street???? Who is "The Stock market"????
A: TRADERS!
It's honestly that simple, all boils back to this simple fundamental. Wall Street is TRADERS.
Q: Why are they called TRADERS?
A: Because they TRADE!
The greatest delusion ever pulled off in human history thus far is the notion that $ goes to Wall Street to INVEST, to GROW, to RETURN, to PROFIT......
NO! $ goes to Wall Street to TRADE.
Traders trade. That is there singular purpose in existence, everything else is ONLY to facilitate or in part and parcel to that purpose.
When 401(k) happened, it was a GIANT fire-hose of not just NEW-$ to Trade, it was DUMB-$ to boot! $ that was ignorant of the system, because it was from the average John/Jane Doe who were knowledgeable and informed on everything involved in there sphere of life, in REAL life, groceries, fixing a mower, there job's, raising kid's, LIFE, not trading.
And Middle America was sold a dream. The dream of secure a financial future by trusting traders. They called it the American Economics machine, they called it this that and the other but NEVER once did they call it exactly what it is, TRADING.
And Generations were brainwashed into this blind trust, as traders honed there craft on how to maximize what they do, TRADING, to profit as maximally as possible, on this ignorant-$.
And an entire universe was built in the financial industry. A universe of gaining gargantuan wealth, via ignorant-$. The Wolf of Wall Street was born of this paradigm shift, Bernie "the bastard" Madoff was it's love child given unto the world.
Previous to all this, Wall Street, "Trading" was a boring, slow, slodge of those who as saying said wore ties so it would be more expedient when choose to hang themselves. it was nothing, NOTHING like the verse it became.
Today, we see the exact same expression in syndications. Since pandemic "ignorant-$" went throwing itself around, it is any surprise some Traders went and got into real estate?
Lazy $ get's abused, always has, always will.
This is the REALITY of the world. A market open for ignorant $, will abuse and neglect the vast majority of it. Don't believe me, just visit a Walmart and ask the Senior greeting people at the door how there 401(k) worked out for em.
I know how it worked out for Klaus.
I don't know enough to know anything to comment but I would like to add that this is an era of no consequences. It reminds me of executives that drive a company in to the ground and still walk with their $40 million dollar bonus. Are syndicators gonna walk with a lot of money? Or, are thy gonna get burned too ?
I always thought syndications were run by the smart guys. If you had enough money you could get it on bigger deals that the smart guys liked. Now, I'm thinking they are just flashy salesman. Are you all saying, that the cool kids arent' actually cool ????? Yikes.
- Investor · Hillsboro, OR · Member since 2016 · 304 posts · 153 votes2y
Quote from @Chris Seveney:
Quote from @Carlos Ptriawan:
Quote from @Account Closed:
Anyone else getting notified this morning of paused Ashcroft distributions due to refinancing issues?
We have been working on refinancing the asset in order to access the equity and create liquidity to earnestly restart the renovations. The new lender we initially signed up with for the refinance notified us that they would not be able to provide the new loan at the agreed upon terms due to current market volatility.
We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months. To remain conservative with liquidity and continue increasing NOI through unit renovations, we are pausing distributions beginning this month. Your preferred return will continue to accrue and will be paid at the next capital event, or when cash flow allows.
While distributions are on pause, we are not collecting its asset management fee and Birchstone Residential is collecting a reduced property management fee.
70/80% of syndications are in trouble in 2024. Especially if they have multiple portfolio in asset structure.
You would lose money 100% for sure. What we don't know whether you lose 50% or lose 100%.actually you can lose MORE THAN 100% if they took accelerated depreciation, you may end up owing more than your investment. That happened I believe on those houston deals.
The few syndications I've seen pushed the accelerated depreciation. The only thing worse then losing your money is losing your money and owing the IRS! Yikes.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Christie Gahan:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom).Ok.... Let me interject a different line of thinking here. I'm going to try and take this conversation from black 7 white, into "Technicolor" and see if vision in this full spectrum doesn't help reframe some mindsets.
Q: What year did the 401(k) come into existence?
A: Nov 1978. So, for argument sake, let's say 1979 because that's really the first year of it.
So knowing the obvious, that such a thing takes an industry some time to adopt into it's actions.
Q: What did the stock market do for the previous 15 years, before 401(k) "gimmick" started?
A: Down. Down BIG time. No, not just big, Mt Everest BIG time. DOW from 9k in '66' all the way too 3k's when 401(k) was introduced.
Q: And then what?
A: Things kept going down, until..... By mid '82' thing's changed direction. Oh how they changed direction. From '82' too 2000 (yes you read that right) was a bull-run unlike ANYTHING EVER seen before, touching on 20k.
What changed?
Yes, post WWII there was a very similar bull-run, because of the obvious down from WORLD WAR, and the obvious rally from NO WORLD WAR and the bizonkers commerce explosion that rebuilding from WORLD WAR made. But this, '80's, '90's, there was nothing remotely close to that..... so what changed?
And for nearly a decade things held in the range.
Even '08' was not able to bring things below 10k....... Total global financial system meltdown, and result was nearly 4x market $ of early 80's..... How?
And post '08', which duration of '08' on chart's now looks more like a sneeze in it's duration, but what after? Another bull-run tapping on 40k. FOURTY THOUSAND! Think on that, 16X early 80's! Did 2021 feel like 16X the commerce from '82'? Did incomes feel 16X? Did all of life seem 16X MORE, bigger, richer????
What changed?
Q: Who is Wall Street???? Who is "The Stock market"????
A: TRADERS!
It's honestly that simple, all boils back to this simple fundamental. Wall Street is TRADERS.
Q: Why are they called TRADERS?
A: Because they TRADE!
The greatest delusion ever pulled off in human history thus far is the notion that $ goes to Wall Street to INVEST, to GROW, to RETURN, to PROFIT......
NO! $ goes to Wall Street to TRADE.
Traders trade. That is there singular purpose in existence, everything else is ONLY to facilitate or in part and parcel to that purpose.
When 401(k) happened, it was a GIANT fire-hose of not just NEW-$ to Trade, it was DUMB-$ to boot! $ that was ignorant of the system, because it was from the average John/Jane Doe who were knowledgeable and informed on everything involved in there sphere of life, in REAL life, groceries, fixing a mower, there job's, raising kid's, LIFE, not trading.
And Middle America was sold a dream. The dream of secure a financial future by trusting traders. They called it the American Economics machine, they called it this that and the other but NEVER once did they call it exactly what it is, TRADING.
And Generations were brainwashed into this blind trust, as traders honed there craft on how to maximize what they do, TRADING, to profit as maximally as possible, on this ignorant-$.
And an entire universe was built in the financial industry. A universe of gaining gargantuan wealth, via ignorant-$. The Wolf of Wall Street was born of this paradigm shift, Bernie "the bastard" Madoff was it's love child given unto the world.
Previous to all this, Wall Street, "Trading" was a boring, slow, slodge of those who as saying said wore ties so it would be more expedient when choose to hang themselves. it was nothing, NOTHING like the verse it became.
Today, we see the exact same expression in syndications. Since pandemic "ignorant-$" went throwing itself around, it is any surprise some Traders went and got into real estate?
Lazy $ get's abused, always has, always will.
This is the REALITY of the world. A market open for ignorant $, will abuse and neglect the vast majority of it. Don't believe me, just visit a Walmart and ask the Senior greeting people at the door how there 401(k) worked out for em.
I know how it worked out for Klaus.
I don't know enough to know anything to comment but I would like to add that this is an era of no consequences. It reminds me of executives that drive a company in to the ground and still walk with their $40 million dollar bonus. Are syndicators gonna walk with a lot of money? Or, are thy gonna get burned too ?
I always thought syndications were run by the smart guys. If you had enough money you could get it on bigger deals that the smart guys liked. Now, I'm thinking they are just flashy salesman. Are you all saying, that the cool kids arent' actually cool ????? Yikes.
I know a few syndicators who are the "legit, real-deal". Although I'd bet for every 1 legit real-deal, there is no less than 100 if not 1000 who are just like you said, another CEO stacking there cash and if it crashes and burns, oh-well, onto the next.
And yes, that's exactly how $ is set-up for many if not most. Most syndicators will NOT get financially ruined by an investment going to 0. For most they just loose the profit potential, it's the LP's who are generally holding all the $ risk. Via various smoke and mirror tactic's it's readily made to look like a GP has a bunch of $ on the line, but it's rarely the case. That's generally fee's of some form or fashion used in a manner that views as invested capital.
So yeah, how you said. No consequence.
Again, Traders who got into Real Estate. WS was too slow or boring so RE is hot, rinse and repeat in RE what they do in WS. That sums up a great # of syndicators today.
And the good few syndicators I know, are just waiting for them to implode and swoop in with offers cent's on the dollar.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Christie Gahan:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom).Ok.... Let me interject a different line of thinking here. I'm going to try and take this conversation from black 7 white, into "Technicolor" and see if vision in this full spectrum doesn't help reframe some mindsets.
Q: What year did the 401(k) come into existence?
A: Nov 1978. So, for argument sake, let's say 1979 because that's really the first year of it.
So knowing the obvious, that such a thing takes an industry some time to adopt into it's actions.
Q: What did the stock market do for the previous 15 years, before 401(k) "gimmick" started?
A: Down. Down BIG time. No, not just big, Mt Everest BIG time. DOW from 9k in '66' all the way too 3k's when 401(k) was introduced.
Q: And then what?
A: Things kept going down, until..... By mid '82' thing's changed direction. Oh how they changed direction. From '82' too 2000 (yes you read that right) was a bull-run unlike ANYTHING EVER seen before, touching on 20k.
What changed?
Yes, post WWII there was a very similar bull-run, because of the obvious down from WORLD WAR, and the obvious rally from NO WORLD WAR and the bizonkers commerce explosion that rebuilding from WORLD WAR made. But this, '80's, '90's, there was nothing remotely close to that..... so what changed?
And for nearly a decade things held in the range.
Even '08' was not able to bring things below 10k....... Total global financial system meltdown, and result was nearly 4x market $ of early 80's..... How?
And post '08', which duration of '08' on chart's now looks more like a sneeze in it's duration, but what after? Another bull-run tapping on 40k. FOURTY THOUSAND! Think on that, 16X early 80's! Did 2021 feel like 16X the commerce from '82'? Did incomes feel 16X? Did all of life seem 16X MORE, bigger, richer????
What changed?
Q: Who is Wall Street???? Who is "The Stock market"????
A: TRADERS!
It's honestly that simple, all boils back to this simple fundamental. Wall Street is TRADERS.
Q: Why are they called TRADERS?
A: Because they TRADE!
The greatest delusion ever pulled off in human history thus far is the notion that $ goes to Wall Street to INVEST, to GROW, to RETURN, to PROFIT......
NO! $ goes to Wall Street to TRADE.
Traders trade. That is there singular purpose in existence, everything else is ONLY to facilitate or in part and parcel to that purpose.
When 401(k) happened, it was a GIANT fire-hose of not just NEW-$ to Trade, it was DUMB-$ to boot! $ that was ignorant of the system, because it was from the average John/Jane Doe who were knowledgeable and informed on everything involved in there sphere of life, in REAL life, groceries, fixing a mower, there job's, raising kid's, LIFE, not trading.
And Middle America was sold a dream. The dream of secure a financial future by trusting traders. They called it the American Economics machine, they called it this that and the other but NEVER once did they call it exactly what it is, TRADING.
And Generations were brainwashed into this blind trust, as traders honed there craft on how to maximize what they do, TRADING, to profit as maximally as possible, on this ignorant-$.
And an entire universe was built in the financial industry. A universe of gaining gargantuan wealth, via ignorant-$. The Wolf of Wall Street was born of this paradigm shift, Bernie "the bastard" Madoff was it's love child given unto the world.
Previous to all this, Wall Street, "Trading" was a boring, slow, slodge of those who as saying said wore ties so it would be more expedient when choose to hang themselves. it was nothing, NOTHING like the verse it became.
Today, we see the exact same expression in syndications. Since pandemic "ignorant-$" went throwing itself around, it is any surprise some Traders went and got into real estate?
Lazy $ get's abused, always has, always will.
This is the REALITY of the world. A market open for ignorant $, will abuse and neglect the vast majority of it. Don't believe me, just visit a Walmart and ask the Senior greeting people at the door how there 401(k) worked out for em.
I know how it worked out for Klaus.
I don't know enough to know anything to comment but I would like to add that this is an era of no consequences. It reminds me of executives that drive a company in to the ground and still walk with their $40 million dollar bonus. Are syndicators gonna walk with a lot of money? Or, are thy gonna get burned too ?
I always thought syndications were run by the smart guys. If you had enough money you could get it on bigger deals that the smart guys liked. Now, I'm thinking they are just flashy salesman. Are you all saying, that the cool kids arent' actually cool ????? Yikes.
Like this guy Adam Neumann, so he bankrupted his WeWork investors, now he is trying to make multifamily syndication flashy with some more marketing hype and use his connection in VC world to well....trap the naive investor again.
Be careful lot of these guy doesn't really have a shame and even someone said we have to thank them even here in biggerpockets LOL
many syndication are just snake oil for lack of better word, if you see their team and their acquisition team member, some of them are not yet even graduated when 2008 occured and teached all dangerous stuffs all over social media. Value add ? meaning painting the exterior LOL.
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