All Forum Posts by: Ian Ippolito

Quote from @Tom Grieshammer:

I have 120,000 that I want to maximize long term profits. I’m a full time teacher and swim coach so I can’t go into real estate full time. Should I invest in a syndication instead of buy my own investment property? Can I even invest in a syndication with my relatively low income as a teacher/coach. 

I invest in both direct real estate (via residential rentals) and syndication/crowdfunding passive investments. In my opinion, both have their pros and cons and neither is 100% superior to the other. And I feel the ideal portfolio can benefit from the diversification of both.

I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want. So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession. That's unusual and it would be very difficult to find a passive investment like that.

Also direct control means I know exactly what's going on. And, for those people who have more time than money, they can put in sweat equity into directly owned real estate. This will increase the return above what can be obtained on a passive investment.

The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity). Not everyone wants that or is willing to put up with that. It also requires gaining a level of sophistication and knowledge that not everyone has the time, inclination or ability to do. And someone jumping into this as a complete newbie can expect that they have a decent chance of making some expensive newbie mistakes.

On the other hand, I feel one of the main advantages of passive investments (via syndication/crowdfunding) is that I can hire a manager who has years more experience than I can ever hope to obtain myself. And once I finish the due diligence, my work is done: it's completely passive. Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments. This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.

The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else. That means learning how to vet a manager. Not everyone has the time and ability to do that and not everyone feels comfortable turning over control. So I feel it's not a fit for everyone. Also there is a management fee to pay for all of the above. So someone who is looking purely to maximize potential return (and has unlimited time) is unlikely to find this a good fit.

Hope this helps.

Quote from @Nick Volz:

I have been doing some reading and hear all these great things about syndications and getting into and being a part of these big deals. 

-How much to get started?

-Where to find these type deals?

By the way. I'm currently reading a book right now that it is pretty informative called: "Fire Yourself"

Nick, there are literally hundreds of these deals that come out every month.And syndications include crowdfunding deals which are essentially the same thing except they are allowed to advertise over the Internet. So there are websites as well where you can see these deals.

One important thing is that there is a big divide between the investments that are available for nonaccredited investors and accredited. And I'm a conservative investor so others will disagree. But, in my opinion, the nonaccredited offerings are generally pretty poor (sponsors generally don't have full real estate cycle experience, higher expenses, fees and promotes charged to the investors, less or no skin-in-the-game, etc).

Quote from @Spencer Cuello:

Has anyone worked with a multi family syndication company they would recommend? I'm looking for minimum investment sizes on the lower end to start. 

I've invested in a multifamily syndication company that has a rare track record of multiple real estate cycles with no investor money lost. Debt is conservative and usually around 65% loan-to-value or less, generally fixed rate financing. They put major skin in the game at 10%+ and fees are normal/inline (and not inflated).

They market under 506B so cannot advertise on the public Internet and work off of referrals. if you're interested in the details, then private message me.

Quote from @Christopher G Bogle:

Considering fix n Flip around Tampa but found Holdfolio and others.  Invested $40 k there.  Considering 200K more in syndication vs fix n flip.  Any thoughts?

I invest in both direct real estate and syndication/crowdfunding passive investments. In my opinion, both have their pros and cons and neither is 100% superior to the other. And I feel the ideal portfolio can benefit from the diversification of both.

1) Holdfolio isn't a match for me, personally (due to not enough experience, skin in the game, etc). But others investors with different risk tolerances, goals and financial situations invest in the platform.

2) I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want. So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession. That's unusual and it would be very difficult to find a passive investment like that.

Also direct control means I know exactly what's going on. And, for those people who have more time than money, they can put in sweat equity into directly owned real estate. This will increase the return above what can be obtained on a passive investment.

The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity). Not everyone wants that or is willing to put up with that. It also requires gaining a level of sophistication and knowledge that not everyone has the time, inclination or ability to do. And someone jumping into this as a complete newbie can expect that they have a decent chance of making some expensive newbie mistakes.

3) On the other hand, I feel one of the main advantages of passive investments (via syndication/crowdfunding) is that I can hire a manager who has years more experience than I can ever hope to obtain myself. And once I finish the due diligence, my work is done: it's completely passive. Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments. This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.

The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else. That means learning how to vet a manager. Not everyone has the time and ability to do that and not everyone feels comfortable turning over control. So I feel it's not a fit for everyone. Also there is a management fee to pay for all of the above. So someone who is looking purely to maximize potential return (and has unlimited time) is unlikely to find this a good fit.

Quote from @Hector Escobar:

Want to learn how to save THOUSANDS on the interest  of your mortgage? 

Looking to simply park some money and get a BETTER return than the S&P 500 or a money market account? 

At Blue Onx, we specialize in the horizontal development of residential land. We work directly with some of the nation's Top 30 builders and they have a say in our acquisitions to ensure once our lots are 100% pre-sold before even finishing the job.

I am looking for investors to help us raise 2.5 million for our next few projects.

What you can expect as an investor:

- Annualized 15% return for 3 years or 18% for 5 years.

- 15 years of experience delivering guaranteed returns to our investors.

- Constant updates on our project progress

Reach out for more information!!

 A *guaranteed 15% return*?

As you should already know, the Securities and Exchange Commission (SEC) considers any “guarantee” a major red flag for fraud, (and especially when paired with a very high claimed return) because no legitimate investment can guarantee a return. Even treasury bills, which are the safest investment around (and some of the lowest yielding), are not guaranteed and not risk free.

Also the SEC also actively investigates and prosecutes this issue.

Quote from @Dennis Silver:

Hello. I want to ask the community at Bigger Pockets about what you think about this gentleman out of Wisconsin advertising for BNB Accelerator (Nicholas Korom). I am a physician and work too much. I want to be involved in real estate but really don't have much time to get anything done. I earn >$500K / yr, and he advertises to people earning over s$400K / yr about how to get into a Air BNB property through seller financing, low down payment, and they facilitate the entire deal including cohosting the property. Obviously saying all the things I would love to hear, but is it too good to be true? Before that, I had contemplated working with Rent To Retire Group as they are a reputable group finding turn key properties for sale. What are your thoughts on all of this?, and would you have any suggestions for a person like me?

I invest in both direct real estate (via residential rentals) and syndication/crowdfunding passive investments. In my opinion, both have their pros and cons and neither is 100% superior to the other. And I feel the ideal portfolio can benefit from the diversification of both.

I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want. So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession. That's unusual and it would be very difficult to find a passive investment like that. 
 
Also direct control means I know exactly what's going on. And, for those people who have more time than money, they can put in sweat equity into directly owned real estate. This will increase the return above what can be obtained on a passive investment.

The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity). Not everyone wants that or is willing to put up with that. It also requires gaining a level of sophistication and knowledge that not everyone has the time, inclination or ability to do. And someone jumping into this as a complete newbie can expect that they have a decent chance of making some expensive newbie mistakes.


On the other hand, I feel one of the main advantages of passive investments (via syndication/crowdfunding) is that I can hire a manager who has years more experience than I can ever hope to obtain myself. And once I finish the due diligence, my work is done: it's completely passive. Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments. This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.

The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else. That means learning how to vet a manager. Not everyone has the time and ability to do that and not everyone feels comfortable turning over control. So I feel it's not a fit for everyone. Also there is a management fee to pay for all of the above. So someone who is looking purely to maximize potential return (and has unlimited time) is unlikely to find this a good fit.

You said you don't have the time to work on real-estate due to your extremely busy day job as a physician. So sweat equity is completely out (and probably anything that requires more work for you...like direct real-estate often does). 

So passive syndications/crowdfunding might be something you find to be a fit.

Quote from @Matthew Brown:

Thank you all! 

Ian - do you have any recommendations for a good securities law attorney? 

Evan Hiller was quoted in the Wall Street Journal article about the Nightingale/Crowdstreet deal debacle:
https://www.riggsdavie.com/team/evan-c-hiller

Quote from @Matthew Brown:

I'm looking to find others invested in the Fairway America Vivo Rancho Cordova syndication deal to discuss their experience with this investment and Fairway America, overall. 

Personally, I've felt the investment has been poorly run in almost every possible way. The updates they provide are bare bones and usually only come after I've reached out to them asking about the investment. The investment itself seems to have been under-performing since the very first quarterly report. You can't blame that on poor market conditions.

I've been in contact recently with the Fairway America team and they've been utterly useless. 

I know it's a long shot, but I'm currently having lawyers review the signed subscription documents to see if there's any way to minimize the losses here. 

I'd love to find some other people who are currently invested with Fairway America and - ideally - in this exact investment.

Thanks,

Matt Brown

Fairway has put out a ton of deals in a variety of real estate asset classes and strategies.

None were a match for me personally and many were not a strategy I wanted or too speculative (such as opportunistic strategy which is the riskiest strategy or investing in tertiary markets which also tend to be the first to go belly up when there is trouble etc).

You probably actually want to look at your operating agreement to see what rights you have to books and records, etc. Additionally, there typically are additional state protections (outside of the agreement) based on where the fund is located. For example Delaware has additional default rights and processes that an investor can follow if they feel they are not getting old books and records. A good securities law attorney will be able to advise you, on your specific situation.

Quote from @Spencer Ware:

Looking to start expanding portfolio.  Would like to be more hands off as well. Seeking connections, advice, deals. Thanks 

Hi Spencer, I have a seven-figure portfolio that is a combination of both hands-on (direct real estate) and hands-off (syndication and crowdfunding)

In my opinion, both have their pros and cons and neither is 100% superior to the other. And I feel the ideal portfolio can benefit from the diversification of both.

I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want. So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession. That's unusual and it would be very difficult to find a passive investment like that.

Also direct control means I know exactly what's going on. And, for those people who have more time than money, they can put in sweat equity into directly owned real estate. This will increase the return above what can be obtained on a passive investment.

The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity). Not everyone wants that or is willing to put up with that. It also requires gaining a level of sophistication and knowledge that not everyone has the time, inclination or ability to do. And someone jumping into this as a complete newbie can expect that they have a decent chance of making some expensive newbie mistakes.

On the other hand, I feel one of the main advantages of passive investments (via syndication/crowdfunding) is that I can hire a manager who has years more experience than I can ever hope to obtain myself. And once I finish the due diligence, my work is done: it's completely passive. Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments. This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.

The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else. That means learning how to vet a manager. Not everyone has the time and ability to do that and not everyone feels comfortable turning over control. So I feel it's not a fit for everyone. Also there is a management fee to pay for all of the above. So someone who is looking purely to maximize potential return (and has unlimited time) is unlikely to find this a good fit.

Here are some good websites for seeing the variety of deals that are available for hands-off investing/passive.

1) CrowdStreet.com
2) 1031Crowdfunding.com
3) Ark7.com
4) Finresi.com

Good luck!

Quote from @Cheryl A.:

Quote from @Chris Seveney:

@Cheryl Abram

Out of curiosity what type of return were they promoting?

Curious as another poster is intrigued by the 24% but it sounds like your return is negative 100%.

Common syndicator game of throwing out huge returns when other funds are going under because they want you to only look at that shiny number and not what their past performance has been

@Chris Seveney

25.7% Annualized Return / 21.7% IRR.

This was my first passive investment and yes I was under educated, naive and attracted by the expressed returns. I did what I felt was good amount of due diligence, but in hindsight I missed some deeper layers of analysis. 

My biggest frustration isn't with the deal failure itself, it's more with the operating performance of the GP and honestly I'm not sure how an LP can really determine this. Ask for references which are hand picked by the GP? I don't think so. Social media seems the best resource for this nowadays.

Out of curiosity, what recourse do LPs have when GPs fail to operate according to the operating agreement? Fail to produce K-1s in time for LP tax returns to completed on time, refuse to communicate with LPs, when LPs start to express frustration.

Cheryl

 Cheryl, I'm sorry to hear this.

Many investors learn expensive lessons with their early investments.

Knowing nothing about this deal (because I didn't invest) I can already tell you the 24% projected return was a major red flag (in my opinion). That is just not realistic in this current market.

So in my opinion it's important to expose yourself to a large number of deals, so you can develop an intuitive sense of what's reasonable and what's not (and quickly discard the ones that aren't).

And it's true that there is no way to 100% protect from fraud (and not just in passive real estate investments but even in public stocks etc.). But there are many things that can be done to greatly reduce the chance.

For example, many sponsors are audited which provides an additional set of eyes.

A sophisticated investor will also typically ask for the entire claimed track record and then run it through the wringer. They will do things like compare with public records/Internet records. And for example if they see a property was taken back by the bank and is not shown on the track record as a huge loss, then that is another type of red flag.

Internet searches can also be done on the sponsor looking for lawsuits, etc.