All Forum Posts by: John Blanton

Thanks for the response @Ben Leybovich and opinion.

I guess my question is meant specifically around a few sponsors who have been sitting on the 'sidelines' since 2018 or even before saying the market has gotten too 'hot.'

If managing investor money or investing in general is looking to predict the future...how confident can you feel in their ability to predict the future of investments/ valuations if they have chosen to not buy in two years while values have continued to climb?

What would have changed in their investment thesis that makes me believe they are any better at predicting today than they were in 2018/2019?

I would personally be more hesitant to invest with them as I feel there are some differences between their thesis and the market

But I am by no means an expert!

Both great points @Arn Cenedella and @Evan Polaski!! Appreciate both of your thoughts

There are some Syndicators who have been on the sidelines for sometime waiting for a 'Correction' or at least relief on current Cap rates. Of course within any investment thesis there must be many 'assumptions' made about future values, economics, etc.

If someone has a successful track record before 2019, but has not bought in this new low interest, hyper Cap rate compression market...is it fair to rely on their past track record to justify future success?

How much credence should you give someone who bought on the upswing (2011-2019) vs buying in the current market environment?

It appears low interest rates are going to be here to stay for quite some time some assumptions must be even more aggressive than 2018-today.

Just making sure I am comparing apples to apples...

Do you actually get any investors from posts like this?

I've used Reonomy before to good success. The contact info isn't entirely reliable, but a good start

Thanks @Ashish Acharya for the insight!

You hear a lot that there are great tax benefits from investing in syndications as a passive investor. That you are able to offset your income from W2 or other avenues (even if you are not a real estate professional).

It is my understanding that if passive losses can only offset passive gains. So unless you have material participation (as an LP likely you don't) how would the tax benefits of depreciation, etc affect anything more than just the cashflow (passive gains) you receive from the passive investment?

Am I understanding this correctly?

I've seen them usually do income approach and comparable sales in combination to find a valuation. They will use a market cap rate for that class and similar vintage of asset. The Cap rate won't necessarily compress just do to the increase in income, but you may be able to argue a more aggressive figure. Many times it comes down the specific lender you are working with. I have seen recently higher cap rates being used in secondary and tertiary markets that the borrower has had to contest the originally used cap rate, arguing for a lower figure. 

@Yonah Weiss!!!! I like the perspective of not looking at it in a vacuum and love your perspective as always!! Always about the scale, makes total sense. Will connect with the CPA and go from there. Thanks!

Makes sense thanks @Greg Dickerson