All Forum Posts by: Dan Rowley

I've always thought investing via HELOCs were risky, and now only more so as the rates are typically adjustable and would not be very high. For example, if you had bought some RE with HELOC funds a couple years ago and now have to service that debt at twice the rate, that could be really painful. Also, read the fine print HELOCs terms can also be changed or terminated if the bank changes their mind.

Seems clear they are running a 'fund' model and they are not the lead sponsors/GPs.  It appears that the appears that very low investment minimums are a key selling point. 

You'll want to make sure you understand the K1/tax filing implications because if you own very small piece of let's say 10 properties in 10 different states you would potentially receive 10 K1s (one for each deal) and 'may' have tax filing requirements in 10 states.  Consult your CPA but this may be way more trouble than it's worth for very small $ investment(s).

@Solomon Rosenberg  I'm sorry to hear about the deals gone bad.  I have not read every single message in this thread but why are you hesitant to share the name(s) of the sponsors with which you lost money?  Seems to me this would be a forum for doing so and you could be providing a valuable service to other investors.  

@Scott Trench

I think you have overstated the risk/reward here for GPs...

I would not want folks to be under the illusion that mngt fee is nearly as high as you state.  It's not % of the equity/$ raise but rather it's a % (often 1-2%) of revenue/rents collected.  This means there are significantly lower $s paid in ongoing mngmt fee (vs. the $2M you list).  And, I'd argue that often the work/effort GPs (hopefully) are putting in to manage the property probably exceeds the fee $s.

Also, 25% of net worth put into a single deal is not really realistic and if that were the bar then I believe there would be very few syndicated deals offered to LPs.

You also have not factored in that GPs are 'on the hook' if it's recourse debt used in the deal, while LPs have not exposure at all.  Certainly there is a $ value to LPs for this.

@Jennifer Cramer  This is one of the more challenging times to invest given the macro dynamics of rising interest rates and falling RE valuations, it's tougher to get a handle on what is a good deal.  Very experienced investors are struggling or have simply paused investing until things perhaps settle a bit more.  that said, there are distinct differences with actively investing vs. passively investing and you should do research to find out which you may prefer.  To manage your own properties out of state is not a simple matter.  good luck!

@David Menn  you mention Ashcroft and I've invested with them.  If you would like perhaps more perspective on LP investing and/or recommendations I have invested in > 25 deals and would be happy to connect.  You can DM if you like   ~Dan

@Doug Henderson  I have experienced business partners in SC like you that are doing solid deals in the Upstate region.  I am happy to forward you details if you'd like to an intro.  Please PM me if so.  

following...

as @Brett Deas suggests you can look for 506B investment opportunities.  These allow investors that are not accredited.  DM me if you'd like more info.