All Forum Posts by: Tushar P.

Of course no syndicator says they want to scam the LPs by selling to themselves at exit. Exit is always expected at market value as per the documents, but probably they are hoping to grab any down-market moment to exit.

I’m not an expert, so you should ask those who have direct experience as syndicators, like @Brian Adams, @Rick Martin

As an LP, one scam I always look for before investing in any syndication is if the GP wants to exit by selling to themselves (another disguised entity) under market value - this is the easiest way for a GP to wipe out LPs with a loss while still making all the profit themselves. Most common scam I’ve seen is a vertically integrated syndicator using its development arm to start the syndication and then the exit plan is to sell to its own operating arm after stabilization. I guess they are hoping that they can exit at below market price, or grab any down-market moment to exit.

I guess there is no shortage of sucker LPs?

@Cameron Dierking if you are good at something and it’s working out well then perhaps focus on that to keep growing, and invest in real estate only passively. Unless you have the capacity to manage your ongoing business and the new real estate business at the same time. You don’t want the ongoing business to suffer because you are putting more time in real estate, which may or may not work out as expected, because there will be a learning curve.

I invest in real estate only passively (for diversification), which means syndications. I don’t even see turnkey rentals as a passive activity - it will eat up my time for meager cash flow that I can live without.

Is it because all your properties are fully paid off? What’s the rent ratio on your properties? 1%, 2%?

Haha, lots of turnkey operators will be willing to teach him the lesson

The reason I don't sell naked is because I'm use Roth IRA. And the reason I'm using Roth IRA is because the profits from puts are always taxed at the highest possible rate.

6-7% coc can be obtained with absolutely zero effort by dumping money in Fundrise or any public reit. Why invest in a non-passive activity to get the same?

I don’t invest in rentals, but if I did it will be for appreciation, in a location that can beat the stock market appreciation over the long term.

In the bull market like the current one, I'm doing DITM puts (with far out expirations) in my Roth IRA for growth stocks that I want to own. 10-20% monthly (not annual) seems to be the average return, even if the stock gets assigned at any stage (at a lower strike than market price). But I deploy only 10% of the capital in the Roth IRA for the puts. The rest 90% is index funds, which have appreciated 22% annualized in the last 12 years (with absolutely zero effort).

I’m still investing in RE syndications, but real estate investment is a capital preservation strategy for me rather than capital growth. I don’t see how it can be the latter.

while I can understand that someone poor with little capital who drank kool aid on owning rentals has no choice but to buy ghettos marketed by bottom feeders, what I don’t understand is why anyone well-off from Cali would want to expose themselves to the risk of owning something that resembled the conditions in the third world or sub-Saharan Africa? Are these retired people with too much time and money, with no clue of the risk they are taking? Or are these people unaware of better investment options? 

@Brad Fausett if indeed the property has dog cruelty going on and requires industrial rat killers to keep it habitable (though no remediation for black mold), are you not happy that you didn’t do business with someone who takes pride in representing/selling such properties? Or are you unhappy that you couldn’t patronize such things?