All Forum Posts by: John P.

 I'm in the Wavemark income fund and am getting paid my distributions

Invested with Four Peaks Partners 8 years ago in a MHP. Have never received a distribution and It’s extremely difficult to get communication and financials. 
I understand that not all deals pan out as pro forma says but at least yearly updates are essential, quarterly even better. Silence is not acceptable. 

Last week Neal and the staff at Gro Capitus let us all know that ALL of our Principals were at risk now in the RTP Nova project of the newly built Townhomes.  Originally it was only going to take a year after investing 3 years ago, but the excuses just kept building Quarter after Quarter with Covid Covid Covid, construction costs, interest rates, and then their Facebook Ads not working.  Even as early as this August, they were supposed to send us our original investment back, and then it really took a turn last week and when I finally got Neal on a Zoom call, he was talking another 2 years before it all played out.  The guy should be in jail in my mind, but even with the market and all the other problems that have come up, they could have been straight with everyone.  It went from getting our principal back in the August webinar to our entire principal being at risk a few months later.  The part that really upset me was their attitudes.  Poor us, we worked so hard, we've tried everything, were transparent, but yet we still don't know where things went wrong and why the building still has not been completed.  I really never thought it would come to this. He sounds so intelligent on webinars, but can't even calculate losses properly, how could he calculate profit?  It needs to be discussed in forums like this and shut Gro Capitus down.  

Open Door Capital paused distributions on a couple funds. I've been in their Sun Belt Fund for 18 months. I received 1% annual return one month and the next month they paused distributions. At least Ashcroft is not taking asset management fee and getting reduced property management fee. Open door Capital is just focusing on funding new funds and really not putting any extra effort into investor returns.

So I just sat with a friend who spent his career (decades) as a commercial bank loan officer, mostly in real estate, with a retirement career as an independent bank auditor. Together we looked at three DST from three different Sponsors. Each one had a Master Tenant Lease agreement with the DST. We tried to analyze financials with reference to the terms of the agreement. It's clear the Sponsors are shifting income to itself, but it is very difficult to know how much or make heads or tails of this. It is happening differently in each PPM so there is no consistent example to provide.

I thought the NOI is supposed to be distributed to the investor by their percent of units owned. The deals we looked at had Master Lease Agreements between the Sponsor or an entity of the Sponsor and the DST. In some, Sponsors have rent, over the Master Lease rent, or some other means, by agreement written into the terms of the PPM, inure to the Sponsor and in one some real DST expenses are being paid for by the Sponsor so income and expense is bypassing the DST I&E. It makes evaluation difficult to impossible.

I am wondering, if, as a general rule, the investor will find any DST that don't break the financials up like that. In one of these PPM, the proforma cash flow statement does not disclose the Master Lease Payment. Shouldn't a Master Lease Payment be considered a DST operating expense and therefore be reflected in the proforma, the banker has asked.

I have spent a lot of time trying to understand the whole 1031/DST/UPREIT space. For me fortunately I believe I have traditional security losses that equate to my capital gain, but I fear this DST industry has successfully pulled the wool over the eyes of retail investors who have a 1031 - 45 day count down and feel they have no other choice.

The debate can start here. I am just not going to participate.

I think you mean to save "Composite" return instead of "Consolidated"

Composite when dealing with a real estate fund may be a bad idea because you can potentially be forgoing all the suspended losses and therefore paying tax on the net gain at the end without factoring in past losses.

How much is your CPA charging for each additional state return to be filed?

Best of luck.