All Forum Posts by: John Cho

These old comments didnt age well. 

They are just middlemen looking to extract another layer of fees and promote on top of what the real operator charges.  Sponsor gets the benefit of getting one big check and out sourcing their investor relations so they dont have to deal with the headache of multiple individual investors at small amounts.  

Early in my investing career, I made the mistake of investing through one of these people and I came to realize they have no real role in the operating GP and are a just useless layer preventing the LPs from getting answers from the GP when a deal is underperforming or losing money.  You can pretty much tell who these people are as they are prevalent on podcasts looking to get leads from uninformed investors.  They all quit their former jobs to pursue passive income . They all seem to have the same boilerplate website. Easy tip off is if they paid money to be on the "Forbes real estate council" to get social proof.     

My understanding is that fund of fund models allow capital raisers to evade broker dealer rules.  I would love to see some of these people get nailed by the SEC but I havent heard of any active or past case.  All this shadiness didn't matter when LPs made money but now people are losing their capital and LPs are pissed.

I am a LP in over 50 deals invested over the years so could name groups that are capital calling or losing capital calling right now.  Some of splashier defaults/foreclosures seems to be tied to Sumrock and his mentees including the Applesway guy but WWC and GVA is pretty much selling large chunks of their portfolio at a loss right now.  There is also a whole ecosystem of capital raisers for these people that have basically misled investors in their involvement in the GP and dont have much to offer as deals go bad.  I could name dozens and that are active in the BP forums.  

Rather than recreating the wheel, I would just go to LP centric forums/groups like 506b or PIC group that dont allow GPs or capital raisers so people can post their bad experiences without intimidation.   Wall street Oasis also but that seems to be geared more toward industry insiders than from the LP perspective. 

Im not in this fund but another Ashcroft deal originated in 2019 that has underperformed. They just put a slug of pref equity on my deal financed by Related and slashed distributions from 8% to 2% after pausing distributions. 

This was my initial test investment with Ashcroft but they my impression is that they they are always looking to acquire to generate fee income rather than maximize the value of what they have acquired.  I get bombarded with more communication about the next deal or fund they are looking to raise instead of the deal Im actually in.  As a LP, I hate that.   

They have one of the more unfriendly fee and waterfall arrangements for LPs and both Frank/Joe have made alot of money over the years during the ZIRP period.  Someone raised the question of why they are not fronting more of the money for this fund debacle and I would press them on that.  Citing loan covenants seems like a weak excuse.

People in the industry seem to have a dim view of much of class B equity can be recovered for this fund.  

https://www.wallstreetoasis.com/forum/real-estate/another-on...

Thanks.  Keep most of these docs you mentioned in a dropbox folder to keep things organized and ready to go.    

The loan applications of some of these lenders/brokers are pretty janky and make me want to stab my eyes out trying to fill them out. I want to just get a quick and dirty on the rate and terms offered before having to commit to filing anything out.   

Need some advice and some basic questions about maxing out conventional financing before resorting to commercial financing/DSCR loans for STR.

Im trying to figure out how much I can afford on my next acquisition based on DTI. Ive got pristine credit (>790) and can put 20% down. Some of the lenders Ive spoken to have just used my W2 wages and discounted what Ive made on K1 income as a LP in syndicated deals and 1099 income reported on schedule C. I also have irregular biweekly paychecks due to variable income I make on bonuses but my W2 is relatively stable year to year. Im also a little confused that some lenders wont consider rental income from a STR at all or some after one or two tax returns and how that fits into DTI calculations.

What do I need to communicate to lenders/brokers that so that I can get gauge of what the max purchase price I can seek on my next acquisition
while minimizing the amount of financial colonoscopy I need to perform with all the document requests/credit pulls? 

Acquiring one in the Orlando area soon and just want some advice on the best insurance options.

I like Proper in terms of coverage (liability, loss of business income, etc) even though its pricey but they informed me they wont cover wind/hurricane damage and suggested doubling up with another policy.  That seems pretty excessive on top of their pricey rates. 

Anyone know of what other carriers I can try to get comparable coverage and reasonable rates?  Tried a independent insurance agent but got a policy quote that doesnt have alot of the coverage offered by Proper.   

I would pass sounds highly unusual

I dont want to out them in a public forum but anyone can PM me.  I just want to know if this is a typical QI experience or out of the norm.  

I am partially through my first 1031 exchange and I have to say I found the QI I used to be thoroughly underwhelming and not worth the 1k I paid for the service.  

I received no advice at any time during the identification period except a generic form letter just stating dates and deadlines.  No discussion about potential mortgage boots or looking at alternative backup strategies like DSTs to salvage the exchange.

For a service that essentially just collects, wires money and pushes papers electronically, the company I used doesn't even use Docusign and asked me to print, sign papers and rescan them.  It's baffling to me why the fees are so high or maybe I just picked a terrible QI.  If I were to select again, I think I would have just gone with the lowest cost provider.