All Forum Posts by: Forest Wu

I was impressed by how Melanie accurately saying "Syndication is not for newbie". Been trying to say the same.  The level of DD for syndication esp multifamily is overwhelming. But it's way easier for different asset class like industrial or warehouse, maybe because it's a niche sector.

ok I would answer OP question: CAZ is also good one.

Sometimes the best way to find best investment is to just follow the best 4 investors that you follow, let them do the DD for you LOL.

 Here's the problem with investors club. I am in many list so I can share my private view.
Disclosure: I don't mention specific club here.
There's always drama as well in such and such club, you question is great but it is not easy to answer. The investment club usually is following the bias of the founder or the most active of such club, so you've been redirected that such and such investment is great, while after investing for such "great syndicator" they also failed when the market is going againts them. 

Lot of investor trying to invest using SPV for example, but when market changes, they also get affected. 

Also there's something like Avestor where you can re-invest on top of SPV ( kinda of ETF/mutual fund of syndicator)..but the holding are not that great either although you can customize which fund you want to invest.

So after thousand and thousand of email. Your question is remain still unanswered. There're only few good guys overthere I can say.  

Sometimes, how to find great one is you can look also the performance from different asset class from very well known player, for example BlackROck decides only want to invest in specifc asset class only: warehouse. Now that's something.

@Carlos Ptriawan I am not sure what you mean.

Last deal I bought as a GP was a 1,000 unit deal and I know I am not a "worst possible operator".

 Also something like "GP Fund" is interesting for me when you say "what is in it for me ?"

So I may invest to GP fund rather than a LP, as GP fund the reward/risk is higher.

 I prefer to get a title to real estate when I invest in it. Having control over the investment, being able to sell anytime I want. Doesn't mean you need operate it. There are plenty of Class A properties that will return nice rent and appreciation that you can place with a property manager. We've seen average appreciation over 30 years of investing of 20% per year. Plus the rental income - which while it typically starts out around 5-10% per year by year 10 you're seeing 30%+++ annual return on original basis. 

Or if you must give your money to someone else. How about a stock, bond or other publicly traded security? This gives you greater than the potential upside you believe is out there in syndications and you own a slice of the company, have access to all of the information publicly traded companies are required to disclose and can sell your stock at any time you wish should you need access to your capital. 

The GPs that are around here seeking investors from the BP community are the worst possible operators. They are seeking the most uninformed, beginner investor client possible to hand money over to them. Because anyone with sense and experience, wouldn't. 

If you're an accredited investor preparing to send six figures out to something you haven't bothered to fully understand, you can afford to run it by a fee only CFP (financial planner) to get some professional advice that fits your specific situation. 

What appeals to you so much about investing with an investment promoter? You do realize getting 11% return is not that great for the huge risks involved. Or you can hope for later returns, tie your money up for who knows how long and maybe you'll get back twice your capital. Wow. Double in five years. Worth the risk? Worth having the capital literally gone and out of your control? Here's a great article from The Atlantic written in 1962 about Real Estate Syndications. You'll note none of these companies are still in business. 

https://www.theatlantic.com/magazine/archive/1962/04/the-rea...

@Forest Wu Getting referrals to investment promoters from an online forum is a sure way to lose money. 

Please take time to read the Syndications thread here with the never-ending horror stories of paused distributions, capital calls, loss of principal, inability to redeem and so on. 

There's a recommendation above for investor groups that are "LP only," but sometimes get special deals on certain investments. If no GPs allowed who is offering the "special deal?"

The syndication market exploded during a very unique time period that ended about 2 years ago. Anyone could raise money, buy a multifamily complex, hold it and sell it for some profit. With interest rates as they are and will be these times have past.

If you want to waste your money getting financial advice from someone you've never met to send money to some syndicator that you must rely only on what they tell you to invest, go for it. The syndicators model is to use distinct entities for every transaction so they do not necessarily have to disclose losing transactions. Moreover, the "projections" that turned you off of past deals you'd reviewed are entirely invented... they can be made to say whatever will get you comfortable enough to send the money. 

I recommend joining the private investor club. This was run by @Ian Ippolito. Free group of like minded investors who research and vet out private syndications. 

I gained a wealth of knowledge around syndications, different options, and basically what to expect when you get into a deal. 

 something like MLG is conservative core based syndication.
For me conservative syndication just means they have integrated business including integrated property management and integrated in-house repair department.

i am running away from 3 4 guys running syndication that hire outside PM and repair maintenance guy. 

So what does it means by conservative syndicators are not just about how the financial modelling aspect (eg: syndicator that took 10 year fixed loan is very different with syndicator with bridge loan 5 year 80%LTV floating debt) but also how about it operates its business.

I do not care about their philosophy as well, if they have the PM as their own internal team, I could be their friend.

unless you understand the actual DSCR, lender finance , there is no such thing as Great GP.

Great GP that works in 2018 ultimately many failed in 2023
 
There's difference between actual marketing pitch, and actual apartment condition in practice. 

Just read yesterday SS facity was running with 0.25 dscr lol , it is not unheard of that GP that offer 1.8 dscr in practice it has 0.9 dscr with 85% occupancy.

so what i am saying is try to understand the metrics first before saying holy moly this GP can't lose you any money.

I’m a multifamily syndicator and could toot by own horn but won’t. 😀

Check into Left Field Investors.

This is a great group of LPs who share their experiences with GPS across the country. The cost to join is nominal but well worth it.

You might also check out the Best Conference in Salt Lake City starts April 10.

LFI has a one day full day LP presentation the day before the Conference on Tuesday April 9.

This would be a great place to start your search.

Good luck.

One word of advice is you come across a deal where the GP is promoting 8% cash on cash 20% IRR, I'd be very skeptical given the current debt market.