Syndication Investing - Holdfolio

Multi-Family and Apartment Investing
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Syndication Investing - Holdfolio

Eric Williams
Boston · Member since 2022 · 7 posts · 2 votes

Been doing some research into Holdfolio trying to find the best RE Syndication opportunities with the lease overall fees. They provided me with this: https://drive.google.com/file/...

- The left side of the chart represents the flow of the distributions from the normal operating cash flow of the project (rent less expenses). The right side of the chart represents the flow of distributions upon the sale or refinance of the project.

- The 80% split on the right side of the graph only comes into play once Holdfolio investors have achieved a 10% IRR from the distributions received from the project entity. This includes cashflows from normal operating activities.

So upon a sale/ refinance, if the project has a lead partner invovled, you are essentially getting 56% (partner keeps 30% then the 70% left over goes to Holdfolio who then does a 80/20 split). 

Doesn't seem like a very good deal. What have you guys/gals seen elsewhere for what other syndications are offering? 


Eric

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y

@Eric Williams

There are many syndicators on this site. It depends also in the type of syndication you want to invest in.

There are STR, multifamily, storage units, commercial, mortgage note syndications. I am a GP in a syndication so I of course am bias.

What I will tell you is look for syndicators with past experience, good reputation and read the docs thoroughly. Some are loaded with fees after fees and promise high pref or high returns that may or may not ever be achieved.

Understand where the money goes and who gets it first. Also understand hold time and what is the sponsors reporting process.

If your using a sdira, understand if they take on leverage as that will impact your sdira.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Eric Williams

    Wow. I have done multiple syndications and I have no clue what they are trying to get too or understand if I invest $100k where does it go and what are my returns.

    I am a big fan of kiss (keep it simple stupid). This to me is furthest from that and I would not even bother considering it.

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  • Eric Williams
    OP
    Boston · Member since 2022 · 7 posts · 2 votes
    4y

    Hi Chris, Who do you suggest for syndications? I would like to look into more companies. I have only really looked at Holdfolio and Cardone. 

    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Eric Williams

    There are many syndicators on this site. It depends also in the type of syndication you want to invest in.

    There are STR, multifamily, storage units, commercial, mortgage note syndications. I am a GP in a syndication so I of course am bias.

    What I will tell you is look for syndicators with past experience, good reputation and read the docs thoroughly. Some are loaded with fees after fees and promise high pref or high returns that may or may not ever be achieved.

    Understand where the money goes and who gets it first. Also understand hold time and what is the sponsors reporting process.

    If your using a sdira, understand if they take on leverage as that will impact your sdira.

    7e investments53 Reviews
    WebsiteView Page
    1Reply
  • Eric Williams
    OP
    Boston · Member since 2022 · 7 posts · 2 votes
    4y

    Thanks for the info. Not using sdira. If you can provide a few including the one your invovled in, I will take a look. Open to different kinds. More importantly, the ones with history, straight forward fees, and realistic profit scenarios with historically achieving what they say they will do. 

    1Reply
  • Jorge AbreuPro Member
    Rental Property Investor · Dallas, TX · Member since 2015 · 513 posts · 380 votes
    4y
    Quote from @Eric Williams:

    Hi Chris, Who do you suggest for syndications? I would like to look into more companies. I have only really looked at Holdfolio and Cardone. 


     I would highly suggest you spend a lot of time educating yourself on the process and find sponsors that you align with. The first thing you should always evaluate is the sponsor and their team FIRST and the deal second. 

    You can do this by asking here on forums (like you are now), performing background checks, Facebook groups, Linkedln, or searching on professional websites such as VeriVest.

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  • Ian IppolitoBusiness Member
    Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
    4y
    Quote from @Eric Williams:

    Been doing some research into Holdfolio trying to find the best RE Syndication opportunities with the lease overall fees. They provided me with this: https://drive.google.com/file/...

    - The left side of the chart represents the flow of the distributions from the normal operating cash flow of the project (rent less expenses). The right side of the chart represents the flow of distributions upon the sale or refinance of the project.

    - The 80% split on the right side of the graph only comes into play once Holdfolio investors have achieved a 10% IRR from the distributions received from the project entity. This includes cashflows from normal operating activities.

    So upon a sale/ refinance, if the project has a lead partner invovled, you are essentially getting 56% (partner keeps 30% then the 70% left over goes to Holdfolio who then does a 80/20 split). 

    Doesn't seem like a very good deal. What have you guys/gals seen elsewhere for what other syndications are offering? 


    Eric


    Market rates depend on the asset class as well (with multifamily giving better terms than say, mobile home parks). And everyone has their own preferences as well

    For multi-family I personally like to see at least a 75% investor/25% sponsor split. And I prefer it when it's better...there are sponsor who will do 80% investor/20% sponsor. I might make an exception for 70% investor/30% sponsor, but would have to really, really love the sponsor and the deal. And I generally don't do deals with multiple middle men putting their fingers into the pie and making my split even worse. It's cheaper to go direct when that's an option.

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  • H. Jack Miller
    Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes
    4y

    I would focus on the safety of them, leverage and net yield to investors. 

    0Reply
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