Track record of Syndicate

[Sanjay Bhagat]

1) Is there a syndicate/s in BP which has gone through all the 4 real estate life cycle (recovery, expansion, hyper-supply, and recession) ?

2) What is their track record of delivering what they promise to deliver in percentage ?

3) Is there a chart in BP which tracks what is promised and what is delivered since inception by the Syndicate/promoter/General Partners?

4) If yes to #3, then may I have the link for such a information from a Limited Partner (investor) perspective?

5) If no to #3, then BP should start something in those line ( My 2 cents)?

[Brian Burke]

@Sanjay Bhagat BiggerPockets doesn't do this, but it's sister website, www.passivepockets.com does.  They have a sponsor directory where sponsors can upload their track records and slide decks.  Keep in mind this is sponsor-provided material, not something that the site discovered through research, nor verified.  But it's a start.

While track record is very important, learning how to interpret a track record is just as important.  You could view a sponsor's history and look at the returns shown on their track record, but without context it's meaningless.  Are the returns gross or net?  Are they projected or realized?  Were the entry and exit points contained within an overall bull market?

Things to look for are how long the sponsor has been in business.  Did they suffer loss of principal during down cycles (or even up cycles for that matter).  Is their current portfolio distressed, or was the majority of their current portfolio purchased at the peak of the market, indicating that they might be in distress in the near future.  What financing structure do they use--max LTVs and loan maturities.

One thing that is especially misleading are your questions 2 & 3.  Comparing what was promised to what was delivered lacks context.  There are plenty of sponsors that projected high-teens returns five years ago and delivered in the forties three years later.  It was more lucky than good and says very little about the sponsor's abilities.  Conversely, sponsors might have projected mid-teens in 2020 and deliver a zero when they sell in 2025.  That doesn't make them bad, per se, it is just a very difficult market right now.  You'll learn more about the sponsor by learning how they handle an adverse market, and how they survive it, than by comparing projected vs actual without context.