All Forum Posts by: Harish V.

I eco what @Brian Burke is saying above, especially on "Pref is generally a shorter term than common equity, which means you need to have a way to redeem it out. This could come from an early sale or from a refinance" ... and that put you on the clock. "Over the last four tightening cycles, the time between the first hike and first cut averaged 2.2 years, and never exceeded 3.2 years" - credits for www.pensford.com 

More projects that are dead in the water.

• Botanical SouthPark, Austin - Projected construction completion (Oct 2023), Projected IRR 20%, Preferred return 8%
• Botanica Chase Hill, San Antonio - Projected construction completion (June 2023), Projected IRR 22%, Preferred return 10%
• Park Lane, Houston - Projected construction completion (July 2022), Projected IRR 22%, Preferred return 8%

 No, I didn't invest with them at all after learning your experience with Grocapitus.  They did contact me asking to invest despite initially telling me it was full (space opened up, etc, etc) but I just ignored them after learning other's experience.

Important note - All the negative comments about Grocapitus in this string are not related to Grocapitus performance. They are for a past company called Financial Attunement, where Neal was a minority partner from late 2015 to Feb 2018. Grocapitus has an absolutely stunning profit track record over 7 exits (see below) and 800+ happy investors in 31 projects.

I contacted Grocapitus a few days after their webinar presentation on Botanica Southpark.  I was told that the deal was full within minutes after the webinar ended.  Apparently 200 some people sent in signed paperworks within minutes.  I am puzzled how people were able to complete proper due diligence that quickly.  Or is Grocapitus really is that solid that people just have that much faith.  I am new to syndication investing so I really don't know which is the case here.  I looked at their Houston Fourplex presentation deck and it appears that the Southpark project is almost the same in terms of building design etc (the interior pictures of the fourplexes are exactly the same).

I too am considering investing in their Southpark fourplexes so would definitely appreciate people sharing their thoughts and investment experiences.

Update on my post

As pointed out, the initial terms on my contract in Oct 2021 were beyond industry standards. It took a posting from me fir Grocapitus to make adjustments?? What’s that say about Grocapitus and their business model. 

Grocapitus had an ephipany about industry standards? 

So I would assume the San Antonio project is sold out if the terms have been adjusted to be more reasonable. However, as of June 2022, I see these properties are still being advertised. When I made my earnest money deposit, in Oct, I was told production would be in 2022 and completed by 2023. That was the only production schedule I was given even though I specifically earmarked the buildings I was purchasing in the project. I was told ( I better hurry, the project is just about sold out) 

As of June, the project is still selling and now the timeline has moved to the right by another year, 2023-2024. If I hadn’t got out of the project, I would have tied up $500,000 for potentially 3 years. 

Industry standards are currently between earnest money to ownership is 12 months. 
Grocapitus is saying it’s ok to tie up hundreds of thousands of $$ for 3 years. Incredibly poor business deal. 

As for the increase in rental potential on the properties. That means nothing until the properties are sold and rented. Even with a bump of $200 in rent. That will most probably be offset by an increase in new mortgage costs and increased rates. 
It seems there are still issues with the San Antonio project. I am glad I walked away. It wasn’t a good deal and since the project production keeps moving to the right and there seems to be an unlimited number of properties available, one has to wonder what’s going on.  I find that amusing as I was told I was buying the last “two” buildings and I better hurry or they would be gone. I would caution any investor to beware and run the numbers independently of the spreadsheets provided by the Grocapitus sales team.