All Forum Posts by: Carlos Ptriawan

Many experienced GPs and investors did see in late 2020 and throughout 2021 that massive inflation was on the way, which then began in mid 2021 and ramped up to 9% by mid 2022. All from the 27% increase in global US Dollar M2 money supply in 2020, the largest ever in US history. So many GP's did avoid variable rate debt and short term maturity loans requiring RE-FIs at predictably much higher rates. But there are many GPs that would buy at any inflated price as they had no skin in the game and even fewer neurons under the scalp :)

The US has now shrunk the M2 money supply by 4% in last 18 months, which has brought inflation rate down, This decrease in M2 has only happened 4 x in US history and every time caused a recession. Let's hope this time is different.

well the holy cycle :

QE Started(2009)--->all asset pricing spikes--->first attempt to rate hike(2019)--->covid-->massive M2 print (March 2020)--->rate cuts to zero and print more (until Q2 2022)--->all asset peaked--->all residential and CRE Fomo buyers activity escalted---->CPI rising(Q1 2022)--->Fed do nothing-->Inflation--->Fed Rate Cuts(Q2 2022)----->Asset dis-inflation/Recession/Stagflation-->cap rate decompression--->capital call (2023/2024)--->Office price falling/MF cap rate squeezed--->Capital Call on the rise/Prefs

Next: regional banking crisis/pension fund crisis------>liquidity crisis------> Fed bailout---->JP Morgan/Citigroup/Goldman would save everyone----> and then We restart QE Again (yayyyyy)

Been like these since 1993.

4 Votes

Quote from @Mark Cruse:

Quote from @Jim K.:

Quote from @Mark Cruse:

Quote from @V.G Jason:

Quote from @Mark Cruse:

For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!

Just don't encourage the behavior. Trust me, I get **** from all angles by standing firm. Wife, parents in laws, etc., but the lessons of delayed gratification is too paramount. I can withstand their nonsense, I know I'm setting mine up with a fundamental belief in things are earned, patience, and everything in between.

Yea, that´s probably the best way to go about it depending on the situation. Itś more complicated in the African American Community. Many in the last generation had nothing. They had nothing to give to their kids but bills while they could see others putting their children ahead of the curve. Now, in my generation so many have wealth and assets and they dont wont to see the kids denied anything. For me, I try to provide some sense of balance and hope it works. If everyone else can send their kids to school and the only thing they have to worrying about is grades, so can I. If other kids are starting off with passed down homes and trust funds, so are mine. However, I try to build discipline and work ethic with it, while they are still handed free sht all the time. Its a struggle. LOL

Mark, for what it's worth, the same sort of thing happened with the Greeks. The history is kind of complicated, but after the mess of the Greek Civil War and the junta, so many Greeks had nothing starting out in 1974 with the Third Hellenic Republic that by the time we were in the runup to the debt crisis, most Greeks really didn't want to see their children denied anything. It was a giant cultural movement. And it bred way too much entitlement with our young people in the home country.

Wow, I love history. I had no clue that was the situation for Greeks. I need to study up on that.

You know the history of "generational wealth" is having the same interlinked with the history of "land privatization" and "war against communism" haha lol ... as generational wealth is impossible in commie-land.

A family could offer "generational wealth" only if the land is private.

This is why also the original communists really disliked the landowner/landlord like us lol....

0 Votes

Pittsburgh, Pennsylvania

Quote from @Bill B.:

I paid state income tax in MN and CA so I wanted to so I’d that.
I’ve heard the horror stories of TX property tax so I looked for low property tax.
I didn’t want to deal with the Midwest snow/ice or the FL/SE storms.

That leaves you with NV,WA and now TN.

TN wasn’t a choice when I chose so I went with the low property tax, cheap insurance, no income tax, no weather, low maintenance, cheaper and newer inventory location that everyone is moving to.

this is the "preferable way" of approaching problem .... rather than just throw up everything wanna invest to all states but end up confuses.

1 Vote

Leyla wrote very good analysis about capital call, especially in this paragraph:

https://www.accreditedinsight.com/p/houston-we-have-a-proble...

3. Do the math on property valuation: deduct 20-25% from purchase price if bought post-2020, less remaining debt, less amount of preferred equity (if any), less any member loans. Spoiler alert: most deals will show a negative equity value at this step.

This is the key here, so assuming valuation went down 20-30% from peak to 2024, LP can just assume if DSCR during purchase is 1.3x ; then there may be a chance. With these assumption, 2024 DSCR most likely is in the range of 0.9-1.1

Also advice #4 is good :

Consider if the new capital injection is truly beneficial or just delaying the inevitable. At this point, ask yourself if the amount of called capital will solve the problem or put a temporary bandaid on the issue. Example 1. A GP is dealing with a one-time issue (e.g. boiler unexpectedly died) and the funds are sufficient to solve that problem (i.e. replace the boiler). Example 2. A GP needs to purchase a new rate cap for their floating interest rate loan: the funds will cover the cost of a rate cap for 1 year, at which point you are back to this decision point.

Here in example #2, is precisely the report from the lender that I forwarded to this group. If the rate cap extension is just one year and DSCR is 0.8 ; your equity is gone pretty much.

Actual loan extension for bridge-lender is, from rate of 4% in 2020/2021 to 9%, but only for 12 to 36 months. I guess that's reason many of them (GP) prefer to issue prefs.

1 Vote

Quote from @Kaushik Sarkar:

We have multiple single family homes on rental with stable tenants. Currently our rental real estate equity portfolio is somewhere in the range of $1.8 - $2M. Looking for ideas on how to leverage this equity to advance our investment portfolio.

In the current high interest market, is home equity loan still reasonable?

Should we think of Short term rental? ( some of our homes qualify in those counties)

Ideas on diversification outside of real estate?

Looking out for suggestions

Use it for your retirement

0 Votes

Dallas, Texas

Quote from @Peter W.:

Quote from @V.G Jason:

Quote from @Jim K.:

@V.G Jason

That's straight out of The Millionaire Next Door. I think something like 85% of American millionaires will answer in a questionnaire that their spouse is "as frugal as" or "more frugal than" they are compared to 35% of the general population.

Never read it, but it's true. I wouldn't say as frugal, cause it's more a combination of discipline, not caring, and enjoying what you have. Frugal is trying to skimp; we're not trying to skimp, we have nice cars, nice houses, enjoy great vacations. Just because someone else's was different doesn't mean it's better, and I think the constant looking around to find validation costs you to ruin the moment you're in.

And for the one's that didn't become millionaires, it's because the other spouse wasn't that way. It's rarely the guys, it's usually the ladies that do this behavior. Forget the hate that'll come this way for that comment-- it's true.

Haha, my wife will spend right up to her means but no more. It iterated me to hell when we first got married. We ended up setting up 4 accounts, one for the mortgage, one for everyday saving, one for medium term saving (car repairs, vet bills, new cars, vacations) and one for long term investing. I manage the medium and long term stuff she’s manage the day to day.
They say women spend 90% of every dollar spent in this country. Which is why marketers always tell you to market to women. (Of course, as is my case, it’s because all that spending has been delegated to her because I hate shopping)

Maybe I always lucky lol

1 Vote

Pittsburgh, Pennsylvania

Quote from @Bob Floss II:

The rich are getting richer and the poor are getting poorer. I want my kids to be in position to succeed in life. I typically recommend my clients allow me to set up a Trust for their family. That being said, I have worked with many second and third generation wealth clients. If you raise your kids right, they will use the money wisely. If you don't, there is no planning on earth that will prevent your kids from finding a way to waste all the money.

It is known due to inflation , the richer would be richer and the poorer would be poorer. Guaranteed.

I have SF with mortgage of $3500 ,$2500 and $2000.

If my kid has to repurchase the house the mortgage would be 8k and 7k.

For the rest of their life they would be only paying only for mortgage or rent. Hence generational wealth come to rescue.

5 Votes

Pittsburgh, Pennsylvania

Quote from @Jeremiah Dunakin:

Quote from @Carlos Ptriawan:

Quote from @Jeremiah Dunakin:

Quote from @Theresa Harris:

I'd also add that I think generational wealth is about more than money-it is the values you teach others that matters the most.

This a 100%. We as a society have become obsessed with the word generational wealth. It’s not the wealth but the culture and mentality that it encompasses that I don’t agree with. I am not saying I am a good parent I struggle and have ups and downs just like every parent that has ever lived. That said there are some steadfast profitable things that all kids can be taught and cultivated regardless of any excuse I mean social or economical challenges that they face.

The lessons you teach them far outweigh any buisness we give them. Work hard, take accountability, accept coaching, do the best job job you can regardless of whose watching, invest in yourself with knowledge and self worth, spend less than you make, stay out of bad debt, keep your hands with calluses, give cheerfully both time and money, count your blessing being born in America, be the person who will take the risk and don’t be ashamed whether you strike out or most definitely hit a home run.many more principles but values trump degrees any day of week

Thing is this....kind like difficult to explain, but thing like "Work hard, take accountability, accept coaching, do the best job job you can regardless of whose watching, invest in yourself with knowledge and self worth, spend less than you make, stay out of bad debt, keep your hands with calluses" .... should be there/exist by default.

I meant those are the the traits that's very common these days especially in certain society, 99% people is supporting and building that aspect of life.

Thing is... in 2024, just "work hard" alone is not enough, these new generation still need access to generational wealth so they can live better than previous generation.

The new generation in 2020 they are facing with way more higher inflation, debasing of dollar and the downgrade quality of living even if they are making the same money and work harder. They live in the world where American no longer control the worl
we are gonna have to agree to disagree, I came from not one aspect of wealth. I started working in a factory at 18 worked my butt off and made something of myself. I work with a couple young guys have did the same thing. They didn’t go on trips and buy new trucks or drink fancy coffee. These guys worked 84-100 every week for awhile saved a bunch of money (while still paying bills) bought some property and now in thier mid 20s the value of the real estate is 1.5x what they payed for it. They are loaded at 25/26 years old. They sacrificed, they didn’t blame the president, the parents, the school system, or anything else. They packed a big lunch and got after it. No trips, no new cars,no new clothes. Now these guys drive brand new trucks and take trips whenever and wherever they want. Mind you these are high school factory workers not college educated trust fund babies. It’s an attainable achievement it’s just a bit harder now. Working 25 hours at the coffee shop ain’t gonna cut it

precisely what i'm talking about.

every society and generation would create their own version of pivot generation which create "upward mobility class" and hopefully starting to generate generational wealth for their next gen or so.

0 Votes

Pittsburgh, Pennsylvania

Quote from @Chris Seveney:

Quote from @Alice Ye:

Quote from @Jon Zhou:

After many of the Ashcroft capital syndications paused distributions, I get this surprise email this morning saying all LP investors need to pay additional 19.7% of invested capital call

anyone have experience with capital calls and syndications? Is there ever a position outcome to these or are we putting more money into a failing syndication?

“Thank you for your patience as we continue to navigate our way through this current economic cycle and unprecedented time in the capital markets. We recognize that this email contains a substantial amount of information, which is why a member of our Investor Relations team will be contacting you shortly to address any questions.

We need to solve for three major factors as it pertains to Elliot Roswell:

Allow the multifamily market time to stabilize.
Meet liquidity needs for the rate cap, capital expenditures and unexpectedly high debt payments.
Resume renovations which have been temporarily paused.

How do we achieve this?

Based on feedback from our existing lender, other potential partners, and the significant capital requirements to potentially buy down the loan to refinance, we determined the best path forward is a successful LP capital call of 19.7%. This will allow us to maintain flexibility to potentially sell the property within 24 months.

This is Ashcroft’s first capital call, and while it’s regrettable to take this step, our primary focus remains safeguarding your investment. Therefore, all LPs must participate

Elliot Roswell is a strong asset that is poised for a strong rebound in value as markets improve. This is due to the property’s institutional quality and the continued growth within the Atlanta market. Moreover, demand and absorption rates are currently at 25-year highs and are continuing to trend in that direction with a 70% reduction in new construction permits and drop off in deliveries in early 2025.

We will maintain flexibility to sell Elliot Roswell as markets improve and anticipate doing so within the next 24 months. In the meantime, we need to cover rate caps costs and resume renovations so that we are best positioned to maximize your potential return.

Why is a capital call necessary?

Preserving Capital: If this capital call is not successful, we will have to sell Elliot Roswell in an inopportune market. This would result in selling the asset below our basis and incurring a significant loss of LP-invested equity. Specifically, if forced to sell now it would be a total loss of capital for both Class A and Class B.
Replacing Rate Caps: Our rate cap is expiring this year, and the projected replacement cost is $736k.
Resuming Renovations: Given rising inflation and labor costs, our capital expenditure exceeded initial underwriting. This prompted a temporary pause to renovations. However, resuming renovations is essential to increasing revenue, and a capital infusion allows us to resume both interior and exterior renovations. We will consistently evaluate the cost vs. benefit, adjusting the renovation scope as necessary.
Maintaining Lender Requirements & Loan Covenants: We (Joe & Frank) will consistently support you and our other investors through both favorable and challenging times. We’ve already extended a $2.9M interest-free short-term loan to cover various unexpected expenses, including the replacement rate cap over the past 12 months. While this was meant as a temporary solution, it must be repaid promptly to maintain compliance with loan agreements and ens

Hi Jon,

My name is Alice Ye from Philadelphia.

I also invested in this Ashcroft Fund and received the email. Did you invest this project through Shirley Xu's Golden Bridge Investment Club? I did it through Shirley from her WeChat group.

I would like to connect with you.

I think we (all the LP investors) should set up a group and come up with a solution on this.

Have you decided that you wanted to put more money in as capital call at this time?

Please message me privately.

Thank you,
Alice

things that I would question:

Resuming Renovations: I would ask more about this as labor costs are not getting cheaper they will continue to increase in the near future. How much of the capital call is going to renovations

$2.9M Loan - Will this loan be converted to a contribution by the sponsor or is the capital call going to pay back this loan? If this capital call was to pay back the loan to the sponsor (this is just my opinion) - looks like they are getting their $ but putting others at risk.

Personally I would NOT contribute to any capital call in the MF space (note easy for me to say, not invested in any MF deal because my ego will say I saw this coming), but there is no data provided to me that shows any of these offerings with a capital call have a satisfactory exit where you would be able to recoup your initial investment.

big problem in this industry is asyncronous information because the nature of the business investment is this is PRIVATE business. In private business it's market where there's less reporting, less auditing and less public information. In syndication it's expected for the LP investor to be on the same level of knowledge and expertise with the GP. It was like that before. But what really happen is that unsophisticated GP is chasing unsophisticated LP (thru social media of course).

If people want to do bit of searching, they can find low risk multifamily fund that has DSCR fund level of 1.90 but instead they are chasing to invest to a fund that all assets are using floating with as-is DSCR of 0.80x.

These are asyncronous information. First, the LP does not know how to DD but they have lot of money (and ego) and second, they don't know how to categorize risk. Investing at S&P500 and crypto for example, has vastly different risk profile.

Now if syndication already mentioned that in January 2022 that they are going to use bridge-debt 3% rate 80% LTV with less than 1 DSCR ; LP needs to know and understand what that means. The GP does not hide information. If they're later fail in the business because of the financing scheme. It's really not a surprise.

1 Vote

Quote from @Jay Hinrichs:

Quote from @Alice Ye:

Quote from @Jon Zhou:

Allow the multifamily market time to stabilize.
Meet liquidity needs for the rate cap, capital expenditures and unexpectedly high debt payments.
Resume renovations which have been temporarily paused.

Preserving Capital: If this capital call is not successful, we will have to sell Elliot Roswell in an inopportune market. This would result in selling the asset below our basis and incurring a significant loss of LP-invested equity. Specifically, if forced to sell now it would be a total loss of capital for both Class A and Class B.
Replacing Rate Caps: Our rate cap is expiring this year, and the projected replacement cost is $736k.
Resuming Renovations: Given rising inflation and labor costs, our capital expenditure exceeded initial underwriting. This prompted a temporary pause to renovations. However, resuming renovations is essential to increasing revenue, and a capital infusion allows us to resume both interior and exterior renovations. We will consistently evaluate the cost vs. benefit, adjusting the renovation scope as necessary.
Maintaining Lender Requirements & Loan Covenants: We (Joe & Frank) will consistently support you and our other investors through both favorable and challenging times. We’ve already extended a $2.9M interest-free short-term loan to cover various unexpected expenses, including the replacement rate cap over the past 12 months. While this was meant as a temporary solution, it must be repaid promptly to maintain compliance with loan agreements and ens

Please message me privately.

Thank you,
Alice

how do you invest through these other entities like you describe here do they have a series 7 license to raise funds ? I am sure they dont do it out of the goodness of their heart.. I suspect when this goes to litigation and these usually do.. that is going to be a course of action taken by plantiffs attornies.. who violated the laws on compensation.. You know you sue everyone..

@Chris Seveney Chris do you get approached by these types of groups to raise funds for your business ???. I know I have referred quite a few investors who have invested in the two Sponsors I like and who are not in this situation and for that I get a thank you they cant pay me a fee as I am not licensed to do so.. I suspect there is a ton of this going on in the industry and when the litigation flies that is a something that will be pursued who was the procuring causes and did they get comp and could they legally take comp. ???

If they're not registered broker they can't market securities. In 2019 I've invested to one SF fund/REIT/OZ that's later investigated by SEC. The "broker/marketer" has to return all the commision (from the fund) or face a jail time.

Three years later however, we all got 92% of our money back (reason we got our money back is because underlying asset was/is single family and not CRE,single family keeps appreciating nicely). The assets are now managed by SEC receivership.

Funny thing is this marketer still approaching his "deals" from CRE, life settlement, oil and gas,etc,etc.

0 Votes

All Forum Posts by: Carlos Ptriawan

Carlos Ptriawan has started 84 posts and replied 7088 times.

Post: Ashcroft capital: Additional 20% capital call

Post: GENERATIONAL WEALTH: Do you worry about your kids?

Post: did you pick your market or did it pick you? All-arounder looking for a market

Post: Ashcroft capital: Additional 20% capital call

Post: Best use of real estate equity in today's market

Post: GENERATIONAL WEALTH: Do you worry about your kids?

Post: GENERATIONAL WEALTH: Do you worry about your kids?

Post: GENERATIONAL WEALTH: Do you worry about your kids?

Post: Ashcroft capital: Additional 20% capital call

Post: Ashcroft capital: Additional 20% capital call