All Forum Posts by: Kent Parks

Quote from @Kent Parks:

Quote from @Cory TerEick:

I have one investment with FNRP and I don't recommend them at all based on this experience.  I invested $500k with them on a 1031 almost 2 years ago.  They actually did have some initially good payouts the first year; however, looking back at the financial reports, these first payouts seem to have been programmed into their acquisition model and financed via debt as opposed to the actual earnings of the property.  In year 2, I am looking at 2% in annual distributions.  They will have to refinance their debt soon, so I anticipate these returns going to 0 or negative in Year 3.  

Looking at the reporting I do get, their fees are very high for what you get in terms of them managing the asset.  They tout their leasing team, but to me they do a very pedestrian job and charge high fees for it.   In terms of accounting, they absolutely suck at getting out timely reports.  Last year I didn't receive their accounting file (a trial balance report) for my taxes (due in April) until July.  Lots of BS excuses and finger-pointing at their hired out Accounting Team for this.

My biggest concern now in terms of this one investment is that they are way over-leveraged and are in a position where they will need to refinance soon which will likely result in negative cashflow with interest rates where they are at.   They are not reporting this to investors or highlighting it as a major risk as of yet, but I see it coming in the next 6 months or so.

Before investing with them, I encourage you to look at their reviews.  The positive reviews are very short and look to be posted by employees, affiliates, or brand new investors without much experience with them.  Dig deep into the negative reviews that provide some context on actual experience.  

 Thanks for your feedback Cory. Did you do any due diligence before you invested with them?

I did, but I wish I would have done a lot more.  The sales rep that sold it to me quit just a few months after close.  I would have dug a lot more into their fees, their legal contracts, and their actual capital investment into the project.  They seem to have it structured so they make money no matter how the asset performs.  This lack of alignment with the investor's interest and their own is problematic.

I have a lengthy post on FNRP. All I can tell you is that they are a joke. Don't do it.

I am a seasoned investor and did 2 deals $400K each. my returns are no where close to what was promised and I don't see any hope. at the present time after 2 + years I am at about 1.5 - 2% return. I have discussed this with them and there was mention of a "Capital call". So instead of them giving me the returns or just returning my initial investment, they want more money to stay afloat.  

I have one investment with FNRP and I don't recommend them at all based on this experience.  I invested $500k with them on a 1031 almost 2 years ago.  They actually did have some initially good payouts the first year; however, looking back at the financial reports, these first payouts seem to have been programmed into their acquisition model and financed via debt as opposed to the actual earnings of the property.  In year 2, I am looking at 2% in annual distributions.  They will have to refinance their debt soon, so I anticipate these returns going to 0 or negative in Year 3.  

Looking at the reporting I do get, their fees are very high for what you get in terms of them managing the asset.  They tout their leasing team, but to me they do a very pedestrian job and charge high fees for it.   In terms of accounting, they absolutely suck at getting out timely reports.  Last year I didn't receive their accounting file (a trial balance report) for my taxes (due in April) until July.  Lots of BS excuses and finger-pointing at their hired out Accounting Team for this.

My biggest concern now in terms of this one investment is that they are way over-leveraged and are in a position where they will need to refinance soon which will likely result in negative cashflow with interest rates where they are at.   They are not reporting this to investors or highlighting it as a major risk as of yet, but I see it coming in the next 6 months or so.

Before investing with them, I encourage you to look at their reviews.  The positive reviews are very short and look to be posted by employees, affiliates, or brand new investors without much experience with them.  Dig deep into the negative reviews that provide some context on actual experience.  

I am a member/subscriber of Pace Morby Subto, Limitless Deal Flow, and Gator.   I am also a member/subscriber of Vodessey, Short Sale Prophets Basic, and several others.  I am happy to talk to anyone about my experience and views on these mentorships.  I would say first and foremost go download the "Guru Manifesto" from Vena Jones Cox who is by far my favorite educator.  Subscribe to her podcast too.  She's great and free (sure there is a paid option - Of course).

Also, keep in mind that some mentorships are lifelong and have conduct rules.  IE if you were to be "negative" you could be thrown out which is a pretty stiff penalty given the costs.  You will not get full honest reviews publically on any program. 

None of these programs contains magic.   They contain shortcuts to knowledge and potentially community.  You can get all that knowledge elsewhere it will likely take a lot longer.  Also for all the value they provide the number 1 thing they all exist to do is enrich the Guru and give him a captive audience to sell more stuff to.  Yes, there can be value in there but as a member subscriber, you will get non-stop solicitation.

Recently I had one of my Gurus tell me I would never get success with their basic program (of course this is well after I bought it) and I needed to spend $75K!!!!! for their one on one program.  Education on real estate appears to be a much better business than real estate itself.  

Hi

On one of my properties, I just requested rent to increase from$2300 to $2450.

Now,the teanent wants to move out due to her budget.

It is 3 bed with 1850 sqf.

It is brand new home.

Also she is a great teanent and I never had any problems with her during this 2 years.

What do you guys think?

Let her move out and find the new tenant, or not increase the rent and let her stay.

The renewal is July 1st.

The rent comps says $2200 wich I am at $2300 as of now?

Maby I am too greedy for asking $2450?

Appreciate your thoughts.

Quote from @Kent Parks:

Quote from @Russ Kitzberger:

Quote from @Kent Parks:

Quote from @Ronald Rohde:

Quote from @Kent Parks:

Quote from @Ronald Rohde:

Sure, we handle them.

I have been researching ground leases for over a year now and have learned that there is more then one way to structure the rent. What has been the most common method used in your experience?

 annual base rent

 How is the rental rate established?

Ideally, through comps.  However, you can capitalize through a standard Direct Cap if there is data available or run a DCF based on investor or market return expectation/rate.

 How do you obtain comps?

1. You can purchase research database subscriptions like CoStar, CREXI, etc. 
2. Locate (through records or research) and interview participants in the market IE; investigate.  

You can hire a broker or appraiser to help.