All Forum Posts by: Joseph S.

@Russell Brazil What data do you have to claim that most syndications are doing capital calls? Certainly some have but I'm guessing its under 10%.

I can't help but think that this thread really displays the book ends of emotions in investing, neither of which are the most healthy. Early in this thread there seems to have been over optimism that syndications were the easy and passive way to make money. Later in this thread is all the hate now that some have underperformed.

I think a healthier middle ground is that syndications can be a more passive way to invest in real estate, but requires more due diligence on the front end of the sponsor, the investment, and the terms. There are great opportunities but also real risks.

Thanks for your feedback @John Terry. Yes I often hear PPR and DLP in the same breath as they both seem to offer solid income with fairly low risk.

Thanks for all these replies... I actually just finished reading his book and was surprisingly disappointed for a couple reasons. Primarily it is because he gets credited with "writing the book on notes" which his hardly is. I found it an enjoyable read about his journey into notes, but out of roughly ~180 pages only the last ~40 discuss notes and even those are very general and don't go into any number crunching. 

The other disappointment as a prospective investor in PPR is that his book could not be more loving of leverage and the ability to maximize returns by using OPM. My worry is that since he has built a 16 year track record of always paying his pref and returning capital on time, that he is now overleveraging.

Does anyone share this concern?

I was searching for a PPR Review within the last year and I think the most current one I could find was from 3 or 4 years ago. I wanted to confirm that to date they have never missed a payment and always returned principal?

I'm new the notes world and frankly the 3-year locked in PPR preferred return of 12% seems almost too good to be true if they in 16 years have never missed a payment or failed to repay principal. Obviously past results are not necessarily indicative of future performance, but it seems like a great investment for accredited investors to get a low-risk, solid return in exchange for some illiquidity.

Thanks @Chris Seveney and @Jim Pfeifer... To be clear I very much want to get paid for my illiquidity as I don't need money back in the near term. But this form that Jim runs is exactly what I'm looking for. BP is a little too broad I think for the niche I'm trying to research.

I'm considering making my first investment in syndications and am considering BAM, Ashcroft, and/or Praxis. Most of the reviews of these folks are quite dated, so I was wondering if people could offer more current perspectives or experiences they have had with them. In particular I'm considering BAM's Westgate property in Bloomington, IN and Ashcroft's Fund III that has properties in Sarasota, FL, Ft. Lauderdale, FL, and Chapel Hill, NC. I'm still getting access to Praxis' opportunities.

I'm less interested in current income and more interested in growth and building wealth. All perspectives appreciated.

SFH at 131 Indian Springs Rd. (no longer in MLS), currently with signed lease for $4200/month through July 1, 2024. No HOA, low taxes and low insurance costs. Seller lived with his family at home for last couple years and is relocating for job. Was jointly listed for sale and rent but rental market was going to dry up soon once classes at William & Mary were about to start, so we decided to accept rental contract but are still open to selling.

Great Seller Financing Available with <20% down and lower than market interest rates available! Value for the house is so protected by proximity to William & Mary and the campus is notorious for their housing shortages. 

Seller has been involved in real estate investment in the past with long-term rentals, but with higher paying job now and family responsibilities would rather save the brain space for other things. Was listed for $730k before we accepted rental contract. Happy to share more numbers with interested parties. 

After my first few tenants were spectacular in my young REI career, I became a bit overconfident and lax with screening/managing my most current tenant and it has come back to bite me. I neglected a lot of the sound advice on this forum and now I can be counted as one of the many who had to learn the hard way.

I suspect I may be heading toward eviction and was wondering if anyone had recommendations for a good lawyer/law firm to use. Not 100% sure it will be headed that way but I want to prepare before hand. 

@Dawn Brenengen

Yes I do think that generally the more expensive the area the less (as a percentage) PMs can charge. 

I still think that charging a "maintenance override" fee is absolutely ridiculous no matter the market. First, isn't that what the base (5-10%) management fee is supposed to be covering? Second, and more importantly, it sets up a horrible incentive for the PM to find the most expensive repairs.

@Mike D'Arrigo

Thanks for your response. I do apologize if my previous remark came across as snarky -- I do get a little passionate when IMHO I see other investors potentially getting ripped off.

I think what it really comes down to is that you and I have a fundamental difference in belief over what is fair or reasonable (perhaps this is because of the regions we are familiar with). In my experience the standard management fee ranges from 5 - 10%. If someone is being charged at the top of this range (10%), then to add on all the ticky-tack other fees (10% lease renewal fee, 7% upcharge on repairs fee, 25%finder fee) seems both too high and sets up a misalignment of incentives.

I don't think the 25% finder fee in isolation is too high. But when you say you'd be worried that fee is too low and they will go out of business, that seems overly dramatic and extreme. I've found tenants on my own places and done background checks, and in today's world of free online posting through hotpads, trulia, etc., the biggest expense involved is your time (and it often doesn't require an extreme amount of time).

Another PM in this thread posted that he charges a flat 8% management fee and nothing else. Obviously that pricing structure can succeed.