All Forum Posts by: Jamie Turbyne

 Hi Tammy,

The path from where things were for me when I started this thread, to where things are now has been a bit of a rollercoaster! I had pulled money out of the market as I was doing my DD on syndicates to put it in. Shortly thereafter, Covid happened and the market tanked. I ended up putting the syndicate investments on hold to put that money back to work in the market. 

I view evaluating syndicates a lot like evaluating a mutual fund. Yes, what they invest in matters a lot, but what matters more are the managers themselves. I wanted a track record of success, admittance of errors (and evidence of how those errors were handled) and managers that were available to their investors. I wanted transparency in their financials and I wanted a clear mission statement in where they intended to put my money and what sort of return they were expecting to get on that money over what time period.  

Since I've been out of this world for a bit, and since I ended up not investing in any of the syndicates, I'm not sure I feel right name dropping. I will say though, look at the names commenting in this thread and in this section of BiggerPockets. If they don't reach out to you, reach out to the folks here that are running money.

I know this isn't answering everything you asked, but I hope it helps.

-Jamie.

Thanks @Jonathan Killam. I spent far too much time last weekend doing exactly that! It's an awfully deep rabbit hole!

-Jamie.

Nothing says Happy Saturday more than a bit of number crunching. +10 for coffee! I've been looking at the Prospectuses (Prospecti?) of a few funds, and one thing that caught my eye in a couple of them were the projected cash-on-cash returns. To try and make my life a bit easier, I've been converting things into metrics I understand from the stock investing world. Namely CAGR (Compound Annual Growth Rate). Where I'm at now is I have three different CAGR metrics I need to track:

(1) The CAGR of the cash-on-cash return

(2) The CAGR of the underlying properties

(3) The total CAGR of the investment over its lifetime.

In the example table, it's a 10 year hold. Column A is the year, column B is the projected cash-on-cash growth rate from the fund's prospectus, column C is my calculation on what % that return changes year to year, and column D is the projected dividend based on 150k invested. Year 10 assumes no dividend and that the property is sold with a CAGR of 7%. 

To go back to my three CAGR calculations, referencing the table, we get:

(1) The cash-on-cash return CAGR comes out to 16.24%.

(2) The CAGR on the underlying property comes out to 7%

(3) The CAGR on the investment over the 10 year holding period comes out to 12.8%

Some probably loaded questions and comments since I understand these numbers are in a bit of a vacuum...

 Do these numbers seem realistic? Increasing cash-on-cash return at a 16.24% clip over 10 years would seem to require underlying assets that were horribly under-managed. Getting a CAGR of 7% on the underlying property itself would seem to require an asset that was bought well below market and / or something that was fixed up and enhanced with ancillary services. An overall CAGR of 12.8% seems fantastic, but it doesn't take much to derail that if the cash-on-cash and / or property CAGRs don't meet their targets.

Am I on the right track here?

-Jamie.

Hi @Gal Peretz, thanks! I'd love to check out the next Nashua meetup. 

-Jamie.

Thanks @Dmitriy Fomichenko, I'm happy to be here!

-Jamie.

Thanks @Troy Zsofka. I like the idea of investing in funds targeting Opportunity Zones. I hadn't even considered that! I'd read up about OZs not too long ago as there are a few in Nashua. As I'm going down the learning-about-syndicates rabbit hole I'm finding it's a fair amount more complicated than I initially thought... I guess I shouldn't really be too surprised by that though! 

I'd certainly be up for picking each other's brains, though I'm not sure I'll have much to offer on the RE side. I do qualify as an Accredited Investor.

-Jamie.

Thanks @Alina Trigub! Between the links you've given me and the thread @Brian Burke posted, I feel there's a real risk I'm not going to get everything else done this weekend that I'd planned for... Looks like it'll be gift bags over wrapping again this year!

-Jamie.

Thanks @Taylor L. and @Ian Ippolito.

Ian, what I'm looking to do seems to align pretty closely to what you outlined. As I mentioned above, my investing history is completely in stocks and other things that are publicly traded on the market. My portfolio there is divided between more aggressive growth and some fairly conservative (for as conservative as single stock investing can be) positions geared more towards slower growth, but paying out decent dividends. What's happened is that these more conservative positions are now valued well beyond what their fundamentals and growth rates would justify. So, from a capital appreciation standpoint there's risk there, and from a yield standpoint, it's no longer all that attractive because of the price appreciation. Many of these companies are "bond alternative" names, and with rates as low as they are, a lot of the price appreciation is coming from investors and funds seeking yield... If the price has been bid up to make the yield less attractive, and the price can't really be justified by the fundamentals or the growth rate, my conservative stock no longer seems so conservative!

Knowing a few people that do real estate, and that are here on BiggerPockets, I started digging around. This led me to syndicates. Weighing what I think the next ten years might look like from a total return standpoint on my "conservative" stock positions, versus what the same ten years might look like if that money were in syndicates, I'm fairly convinced the better total return can be had in the syndicates. 

-Jamie.

 

Well then, I look forward to reading it. If I've already invested in one by the time it comes out, hopefully it don't have an, "Oh crap, I missed that red flag." moment!

-Jamie.

@Brian Burke -- That's exactly what I'm looking for! Need a proofreader? :-) A lot of the books and resources I found were more on how to setup and run a syndicate. Finding info on how to evaluate one as a potential investment has been harder to come by.

-Jamie.