Syndicate investment opportunity (Three Pillars Group) - Houston, TX apartment

[Vivek Chaurasiya]

Hey there folks,

Sometime I come across investment opportunity like below. My questions are around how to evaluate if its a safe/stable investment alternative? Since I want more hands off approach these are appealing but I want to be careful. Each of those deals have favorable IRR > 15%; so should I check for something else? What can I ask these investors? What else macro-economic factors do these type of deals hinge on? Any guidance in this matter would be really helpful.

~Jam

> Three Pillars New Acquisition of Riviera Apartments ~20% IRR

> Preferred return - 8% and 10% for class C/A

> Equity multiple - ~ 2x

[Greg Scott]

Here is what I see when looking at their information.

It looks like their first deal was a 14-unit acquired in 2017, so they are pretty new at this game.  Given their current size, they ramped up VERY quickly.  That is a huge red flag for me. Getting large quick doesn't mean you can stay large.

Regarding their historical returns, everything they sold was before interest rates started rising, so their claim of "$0 investment lost" may be more a function of timing than skill.

I'm mostly curious about their massive 544-unit which was bought at about the worst possible time.  Interest rates were starting to rise and Cap Rates were low.  Typical deals like that had short-term, variable rate 3-year bridge loans.  That could be a huge albatross around their neck, and may result in a massive loss in June of 2025.  But, I am just speculating.

I haven't seen this Riviera Apartments deal, but am happy to underwrite it if you DM me details.

My take:  Unless I knew them personally, and knew they were superheros, I'd be cautious.

[Cody L.]

Interesting that there are no comments from people that know these guys.  Since I live Houston multifamily RE day in / day out, I just assume others know about and comment on our little niche.