All Forum Posts by: Harish V.

i was also one of the victims of GEG. They now are.all working under new name sdirawealth. Beware of dealing with them. Any information of how to pursue the matter with them. It's nice to see you standing for your members.

BTW the properties are listed here on Bigger pockets: 

https://www.biggerpockets.com/...

Update on my post

As pointed out, the initial terms on my contract in Oct 2021 were beyond industry standards. It took a posting from me fir Grocapitus to make adjustments?? What’s that say about Grocapitus and their business model. 

Grocapitus had an ephipany about industry standards? 

So I would assume the San Antonio project is sold out if the terms have been adjusted to be more reasonable. However, as of June 2022, I see these properties are still being advertised. When I made my earnest money deposit, in Oct, I was told production would be in 2022 and completed by 2023. That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project. I was told ( I better hurry, the project is just about sold out) 

As of June, the project is still selling and now the timeline has moved to the right by another year, 2023-2024. If I hadn’t got out of the project, I would have tied up $500,000 for potentially 3 years. 

Industry standards are currently between earnest money to ownership is 12 months. 
Grocapitus is saying it’s ok to tie up hundreds of thousands of $$ for 3 years. Incredibly poor business deal. 

As for the increase in rental potential on the properties. That means nothing until the properties are sold and rented. Even with a bump of $200 in rent. That will most probably be offset by an increase in new mortgage costs and increased rates. 
It seems there are still issues with the San Antonio project. I am glad I walked away. It wasn’t a good deal and since the project production keeps moving to the right and there seems to be an unlimited number of properties available, one has to wonder what’s going on.  I find that amusing as I was told I was buying the last “two” buildings and I better hurry or they would be gone. I would caution any investor to beware and run the numbers independently of the spreadsheets provided by the Grocapitus sales team. 

@Joe Villeneuve I truly do not understand your comments regarding measuring value/equity.  All I know is it feels nice to hold real estate worth millions.  In any event, I agree you cannot know in advance how a particular market is going to move but sufficient demographic data exists to allow you to make educated guesses about where growth is going to happen.  We are invested in Northern California, Gulf Coast Florida and sunbelt (largely Las Vegas).  So far, these bets have played out quite well.  We sold our midwestern bets in 2014 once we fully digested the above principle and realized that capital costs were certain to outpace gains over the long run in those places.  

Check out Neal Bawa and his Grocapitus, their Equinox development in Idaho Falls.  That's more of syndication option but that's the only "newer" group of 4plexes I've heard of recently.  I think you may be hard pressed to find 10+ available in the same neighborhood.  We have communities of 4plexes in our area but unlikely that there would be 10+ motivated sellers right now.  Best wishes on your 

Harish, yes, 20-25+% IRR threshold. Do you invest in real estate? If so, I'm interested in your IRR experience and threshold return. Your profile says syndication experience. We can passively invest in syndications and achieve returns in the teens. So, there is no sense in investing in active direct owned real estate without a premium to that return. Incidentally, the 20-25% is about what it takes for the total return in a syndication to split returns and provide LPs with returns in the teens. It's not my model...it's most investors' models. None of us would invest in real estate for a 6-7% return...can get that with index funds/ETFs.

There are two types of appreciation in real estate: market appreciation and forced appreciation. Market appreciation is out of our control, and is the type of appreciation you're referring to here. Market appreciation is nice to have, but since it's largely out of our control we can't put too much emphasis on it.

Real estate's advantage over Wall Street is that we have the ability to force appreciation of our properties. We can buy properties that are underperforming, fix them up, and sell for a higher value later. Only billionaire activist investors can do that on Wall Street, and even then they're rolling the dice (cough, Elon, cough). 

From early on i was told to buy real estate as a HEDGE against inflation.  The dollar seems to be chasing the peso right now.  Look at the cost of everything!

If an investor can only get a 6-7% total return on real estate, they definitely should invest in something else. Direct owned real estate is too much work to not achieve outpaced returns. Most of us have 20-25+% minimum IRR hurdles. Otherwise, could just invest passively with others and get returns in the teens.