All Forum Posts by: Joanne Laipson

Hi David L, the timing of your response was fortuitious as I just received the July 2023 update on Fund 4 this past week.  Still significantly lagging but yet again with promises of an imminent turnaround.  Much longer report this time which suggests they are getting lots of questions and concerns particularly in light of having paused distributions. 

Occupancy is down relative to projections and operating expenses are up relative to projections.  Their explanation: "The overall theme for 2023 is that unexpected roadblocks and delays throughout 2022 put us behind our originally targeted timelines for infill (occupancy increases) impacting how quickly we could increase revenue."   So I stick with my initial assessment - insufficient due diligence was done at outset.  To pause distributions two years into the fund (when, presumably, some contingency was built into the financial model at outset for 'surprises') suggests a magnitude of issues that were not caught during due diligence. 

Are they in over their skis?  My opinion is yes.   Take a look at what they have going on: https://odcfund.com/our-offerings/.  It's hard to focus when you have so many balls in the air and some of those balls need dedicated attention because you didn't do your homework at inception.    Brandon Turner's post on Twitter on Aug 29: "There is a big difference between being busy and being effective, and in the case of a lot of investors; they believe that because they're buying properties, means they are going to succeed."   Ahem, perhaps they should take some of their own advice!

So, David L, if your objective is a successful exit (or even predictable returns as forecasted - which was my objective), my opinion is stay far away from Open Door Capital.   There are many other plan sponsors out there who are willing to be held accountable for delivering on their projections without whining about unexpected roadblocks and delays  - that they should have anticipated had they done their homework.   Personally, I don't have confidence any longer that Open Door Capital is doing the type of due diligence required to deliver to their projections.

I'm in Open Door Capital's Fund 4 and I'm extremely disappointed. By their own admittance, as I write this on 8/1/23, their latest update (received today) acknowledges they are STILL behind target. They've been at this Fund for a couple of years now with no turnaround in sight (despite glowing monthly reports of an imminent turnaround that never materializes). This time, they have PAUSED quarterly distributions and TTM NOI is now close to 40% BELOW projected targets. Not good and continuing to get worse and worse.

I initially got involved with them because I wanted to be in mobile home parks and they seemed to have a successful and longer track record than others.   However, my take on this is they did not do sufficient due diligence on many fronts, including city government challenges, operating challenges, infrastructure challenges and marketing challenges.  Because of this lack of due diligence, their projections were way off.  Rather than underselling and over delivering, they over sold and under delivering.  Currently, they appear to be rushing into putting lots of offerings on the market these days but if Fund 4 is any indication, they are not doing the required due diligence on the quality of what they are offering.    Go into any investments with them with extreme caution. 

I suspect the early funds were good. That's how they built their reputation. However I'd be very suspect of anything more recent. I've stopped considering them for any further investments for sure. Who knows if I'll ever see my initial investment in Fund 4 returned, let alone any ROI. I'm not holding my breath.