All Forum Posts by: Matt Mason

Jeff, thanks for being the MC yesterday. I think it was informative for everyone as well as a good time.

Too bad about the parking ticket. Unfortunately, with LA City, you pretty much have to measure in seconds the amount of time you might go over as they are pretty much there with a stopwatch ready to pounce.

It seems as if few syndicators want to bother with certifying accredited investors so many just keep their old model going, especially if they have a good stable of accredited investors ready to invest.

However, I think the crowdfunding sites seem poised to get involved here if rules regarding soliciting non-accredited investors are relaxed. It seems like a golden opportunity given their business model. I think this may be where we see a big change going forward. There is a big difference between someone accredited dropping $50k into a deal vs. a non-accredited investor putting $10k into a deal.

This is where we see some overla that isnt there today, but as others have pointed out good business practices and reputation matter more than anything else in any operator's success.

@Chris Clothier

Good points. I suspect that operators who use accurate projections and don't oversell and can retain repeat business and referrals will always have a viable business model in any case.

The rule changed regarding general solicitation of accredited investors. I believe this may include non-accredited investors in some form later this year. At least that seems to be the feeling of some.

I'd say REIT investing is as much stock investing as real estate. When one buys in, you are paying what Wall Street values the stock at, which can fluctuate quite a bit.

I once worked for a REIT in a fairly stable sector of real estate tied to long term leases. When I started, the stock price was in the high teens. 6 years later it was up to $100. 3 years later, it was down to below $6!!! 3 years after that it made it back to $60. That is a wild ride.

I agree with @Troy Fisher in that we will probably see some shady syndicators if they are able to really market to everyone.

I agree turnkey won't go away, but was really trying to see if people think that it will face some stiff competition from the SEC rule changes and the rise of crowdfunding.

@Jay Hinrichs

Yes, I usually make it down to the Manhattan Beach FIBI every other meeting or so. It is usually very worthwhile. If anything they are getting too big and popular for their venue. I'll look forward to seeing you at the April meeting.

@Jay Hinrichs

It seems as if control is a major part of the sell of turnkey. However, to me it doesn't seem to match up well with the actual investment, because one may have control, but it is control of an asset that is underwater so it will need to season for quite a few years in most cases. Also, it is control of an asset that could be thousands of miles away in an unfamiliar market, which seems somewhat less than ideal in terms of management.

Also, I wonder what the exit strategies really are if you have to wait 5-10 years, since it could need another rehab in 10 years. It seems we never hear stories of successful turnkey exits, but I am sure they happen.

I suppose that I tend to prefer investments with high barriers of entry either in location or product type with a value-add component, so it may just be hard to see the real appeal here.

@John Rooster not that it really matters to the premise of my post, but the vast majority of people are not full time real estate investors and much of the capital and disposable income in this country is concentrated along the West Coast and Northeast urban centers. Like it not the turnkey question is always popping up on BP, which is what got me thinking about this issue. I am not interested in turnkey as you could tell from my post, but it seems others are and I like to think in terms of business models and future trends just for the heck of it.

You think syndications are being pushed by the syndicators. I think that may be true more in the future if the SEC rules are changed, but as of now, it seems the turnkey operators are much more aggressive in their marketing. In fact if I were to post on BP as John Doe that works at IPO Tech Company in San Jose and think my market is expensive, I am guessing we would see more than a few posts from turnkey sellers.

I think that works for me as does during the week. I live a block from Bruhaus or Barfood, so I am biased for those locations.