All Forum Posts by: Cheryl A.

Quote from @Chris Seveney:

@Cheryl Abram

It’s typically called a co-investment which they can be very complex. (For those reading I don’t recommend these types of investments) the only way to get more info would be to get the partnership agreement which they should provide to you.

Who is the sponsor ?

Hi Chris, I would also not recommend these types of investments. My experience has been complete madness. The co-investment structure was not well explained to LPs, significant delays receiving investor reports / tax docs if you're not directly invested in the deal with the operator, when the deal fails co-sponsors that you are not invested with refuse to help citing advance from lawyers. 

Sponsors are: Community Investment Properties, Legacy Wealth Holdings, Djuric Family Office (aka Blake Capital). 

How is it the fully executed operating agreement clearly states investment directly in the deal, however sponsors say no the investment is with one co-sponsor only, but there's no legal contract to support this?

Thanks, Cheryl

Quote from @Henry Clark:

OP My point:

1.  Show us your checklist.

2.  Walk us thru your deal analysis and deals.

3.  Go make a post and add value.  Build a better due diligence checklist.

4.  If you haven't done a deal, then make a post saying you're in Analysis Paralysis, want to do a Syndication investment, what should you do.  Asking people for the Best markets, the Best GP, the best PM's, etc; adds no value.  If you were in my market, I would not give you the name of my best team members.  You have to pay for your learning.

5. If you are just hesitant on REI, then switch industries. Look up medical for Shock Wave therapy and/or Pre Nuvo body scan.

I just don't like Enabler or Victim approaches.  If you follow the thought process to the next steps:

1. Make a list of Good/Bad GP's. Thus far no one has shown a Due Diligence list or attempted. So why would you want to take LP advice on what a Good or Bad GP is? This Enables Lazy investing. More people "like" this GP, thus should invest there. You don't even know if it fits your REI type or Risk/Reward analysis.

2. Make a list of LP deal analysis and share. Who says the other LP's can even do a deal analysis and also understand Risk/Reward analysis? Or if it fits your investment strategy? And then why share your deal analysis? Ask the more prominent posters on this thread no matter what REI strategy. Please post each deal analysis you do, and tell us whether it is good or bad; before they even invest in it.

The last Bad GP post on BP, the investments were Broadway Plays, Defunct brand Names, Mastermind programs, and Crypto arbitrage.  All of those people investing in that deserve to lose their money.  People should lose their money.  It's part of the learning process and also an efficient market.

The majority of the Syndication issues right now are due to Greed on both the GP and LP's sides.  The numbers look better using Variable Rate interest.  They should have locked down their financing for the period of the investment or had the Balloon terms come close to the investment life cycle.  Syndication pro formas look better with a low interest rate, LP's want a better return, no one did a Risk/Reward analysis.  

If you were in a new construction syndication and got caught with a 300% increase in Lumber costs due to Trump applying Tariffs to Canada for anti dumping, and then Covid shut down both the logging and Lumber Mill industries in Canada I can understand getting nailed.  No one would have factored in a Black Swan event.  So, a really good GP could have some very bad results.

Hi Henry, I think you're missing my point. My frustrations aren't specifically with the deal mechanics, even though I'm very disappointed in how they turned out.

My frustrations come from the lack of GP "soft skills" / broken promises that were made around full transparency (good & bad), open and timely communications, prompt delivery of investor updates & k-1s, communication in laymen terms, actively updated & accurate portal, etc. 

These are points on my due diligence checklist, but they are very hard to vet and at the end of the day LPs put a degree of blind faith in GPs to keep their word. Much like we all do in other areas of life (e.g. doctors).  

I'm a technology professional, not a real estate professional & not a banker. Having a forum to share LP experiences like this is a valuable tool to have to help me complete my due diligence checklist.

Changing topics, can anyone help me understand how deals are structured behind the scenes when multiple GPs partner to run the investment, bringing in their own set of LPs? For example with one of my investments I'm being told by the operator that I'm not directly invested in the deal, but instead invested with the GP (DFO) that brought me in, however the executed PPM, OM and the bank I wired funds to all say otherwise. 

Despite requesting the GPs explain this to me in more detail I haven't been able to get them to explain. Leads me to believe there's something sketchy going on here.

Best wishes to all, 

Cheryl   

Quote from @Forest Wu:

Hi! One of my last posts was asking about syndications/PE opportunities. Unfortunately, I've come across quite a few people who are really upset with how their syndication experience has been. Quite a few people have lost a lot of money. I think it'll be very helpful to increase transparency on those operators who have betrayed their investors trust or simply are poor performers. So let's do the following:

1/ List the GP / syndication that you've had a terrible experience with

2/ At a high level (and as much as you're comfortable sharing), provide a reason for why the GP / Syndication should be avoided from your experience (or an acquaintance's experience)

3/ Any lesson learned to help future investors

Let's help each other avoid future mistakes and bring hold GPs/operators accountable. 

I appreciate the context, transparency & honesty shared here.

For the most part, I’m an inexperienced LP investor.

My first two investments with the Djuric Family Office / now Blake Capital Group, started in 2021 and my experience has been awful.

One deal collapsed in Dec 2023, which I found out 4 months after the property was sold back to the bank, by the operator. To date Blake Capital investors have not been formally notified and despite repeated requests I’m not able to get anything of legal value to support the collapse and narrative around it. All I’ve received is bad property managers and rising debt costs are to blame, GPs have lost a lot of money also, this is the first deal failure for the GPs …

The second deal has had two capital calls and is scheduled for foreclosure in August, unless additional funds are raised from the last capital call. My request for the root cause of the failure has yet to be answered.

My frustration comes from the lack of transparency into how the deal was structured with GPs/Operators. Seems like unless you invest directly with the operator, you’re going to be treated as a secondhand investor with lagging communications, investor reporting, tax docs, etc.

Extremely poor communication, most often I’ve had to repeatedly ask for a response.

Inconsistent investor reporting, sometimes monthly, sometimes quarterly, most of which has been received 2-4 months past the reporting period.

Investor portal that appears to be used for show only. I had to push for my investment to be registered and funds to be documented. The accounting has never been added and 8 months later and the portal still shows I’m actively invested in the failed deal.

K-1s received late Q3.

I was naïve and inexperienced, and I accept some degree of blame for this, however I feel I have been very misled and there appears to be no accountability for this.

Are LPs able to file a Suspected Securities Fraud or Wrongdoing report with the SEC? Any other recourse LPs can take?

Appreciate any advice on this.

Thanks, Cheryl

Hi, has anyone invested in deals with any of these GPs? If so, what's your experience been like?

blakecapitalgroup.com; Djuric Family Office; inmanequities.com

legacywealthholdings.com; Community Investment Properties