Anyone With Experience Partnering With Viking Capital Multi-Family Syndicators

[Tim Berryman]

Hi,

I am considering investing on a multi-family syndication with Viking Capital. Looks like they have done around 25 syndications worth $800M in property value. Founders are Vikram Raya and Ravi Gupta. If you have had any experience with Viking Capital I would appreciate any feedback on your experience.

Thanks

[Paul Azad]

Don't know anything about them but per my calculations they are taking 27.2% of the capital appreciation on the New Braunfels deal at the end per their projections which seem optimistic in this oversupplied environment, (Austin MSA with largest new multi-family projects coming out this year in the country ,8% of total existing stock and already seeing rent rate declines of near 10%in the city so far) and they are taking a big chunk of the monthly cash on cash as the preferred payouts for their 3 different classes are well below the projected cash on cash total. (They concentrate/force the equity into their class B shares 13/18 million so they get 72% of the future capital appreciation at the higher 30% cut,
versus 5/18mil at the lower 20% rate) They also seem to be overpaying in this downward trending multi-family environment. Also, per their numbers they are buying for 37 mil, debt 24 mil, equity 20 mil, 44mil minus 37 price = 7 million in closing costs, which is 35% of the total equity, RE commissions of say 4% total 1.5 mil so they are taking 5.5 million in fees up front as well minus the inspections/loan fees etc. They appear to be really soaking their unsophisticated investors, my guess they focus on doctors, and it's a risky place and time to be buying too. good luck