All Forum Posts by: Paul Azad

Warren Buffett has a rule 1 of investing, which is "don't lose money.", and his rule 2 is "see rule #1"

This translates to me as "Don't overpay.", if you can be thoughtful and diligent and very skeptical, and wait until things are obviously cheap, you will generally outperform 90% of other investors. equation {Buy low + decades} = Rich

Get a hold of someone on the phone, about the investment, ask a few questions and get their best contact information. Don't be afraid to tell them you were nervous as you didn't hear back from them, and ask if they are swamped or were on vacation and expect and gage their answer. Life happens and people get busy or someone gets sick, so it may not be a red flag that they took a week, but it shouldn't happen again and again. They may surprise you with their honesty and that may make them a better syndicator actually. Lord knows there are a lot of fancy, online GP's now with beautiful websites, YouTube channels, and 10 people in their investor relations department but only 1 inexperienced guy in their acquisitions who couldn't underwrite a lemonade stand.

good luck :)

Copium2024 appears to still be the most plentiful element on the periodic table, and also on this thread, Remember Norada Capital Management invested the investor's note money into an obvious scam company run by a documented scammer, which filed for bankruptcy almost two years ago. It has a half a dozen lawsuits against it. Either Marco knowingly did this and was complicit or he unknowingly did this and was moronic. Any other interpretation is pure Copium2024 :)

The investors don't need "communication", they need an apology, an admission of what he did, and their money back. 

Great webinar/format, please keep it up.

If Monday is GP and operating the property, who is RSN? and why are they needed in this deal? Are they bringing equity? Are they part of the pref equity position? Are they given a JV-co-GP position for fundraising or will they be involved in the management of the property?

Atlanta MSA is great and growing, but Multi-Family supply coming on line there both now and through next year is significant, wouldn't this be a better/cheaper deal 1 year from now?

Does Trump's election yesterday, with presumed higher GDP growth and higher inflation (Tariffs/Deficits), which means higher 10 yr and Cap Rates, change timing of CRE acquisitions?

Thankyou

https://www.biggerpockets.com/forums/432/topics/1171472-pep-...

I think this is most recent bp thread on lane Kawaoka PEP fund etc

Quote from @Audris Tien:

Hi Paul, How can you tell that Good Egg is an entity (or fund of funds) that collates funds and invests those funds on your behalf (i.e. more of a capital raiser) rather than the actual operator/GP of the proposed property that is advertised for sale? It seems a bit misleading   to advertise as the actual syndicator if you are not? (I'll admit I am a fairly new potential investor)

So, they are definitely a fundraiser, and you are right, it is definitely misleading. The founder of GoodEgg explains their fees/structure at 20sec mark here in a 1 minute video about how they make their money. (they get a cut of the GP fees for fundraising)

Goodegg Investments – This Is Is How We Make Money Through Real Estate Syndications (youtube.com)

what's most annoying is the slide at 50sec, she has on the left the GP which "does all the work and takes on HIGH risk, while on the right the LP who does no work and bears low RISK". I'm like "What, What, What!!!" 
RISK is the potential for loss. and who in their structure of 3% acquisition fees, 3% asset management fees, and lord knows what pref/split fees they charge is bearing the RISK when only the LP is bringing any capital to the transaction? WHAT!!!! (I almost threw something at my monitor, but took a deep breath and realized my wife would be very upset if I broke another one :)

They are not doing anything illegal, they are just CRE Remoras, who exploit less experienced investors, and there are hundreds like them. Their mere interposition in the process adds a layer of unnecessary fees, and I just don't see what value they add. 

Syndication investing is awesome, it has given me sp500 beating returns for 30 years, fantastic tax benefits, great geographical diversification, a wealth of knowledge about this country and the economy in ways that a nerdy science type guy like me would never have known about. And as an LP, I can do 75% of my due diligence from my desktop computer, the rest is going to the properties themselves, going to sponsor meetings, talking with other investors etc, which is a ton of fun. 

good luck :) 

Warren Buffett has told his children to just buy the SP 500 index fund and do nothing else with any capital not allocated to Berkshire stock. This will provide a roughly 10% nominal return likely over the next few decades as it has averaged that since 1900.

He says it's simple and other than his son Howard, the others have little interest in investing/finance, and the sp500 index has outperformed >98% of professional money managers over any 20yr or greater stretch. 

Active or even passive management of real estate could be cumbersome for many heirs, not skilled in it. 

You can do both, not an either or, but focus on the one you like the most

RE and CRE are great if done carefully and methodically and with patience, but so is picking individual stocks.

I love researching good companies with good growth prospects and a long horizon to allow for compounding of value, much like finding a good property in a good area with good long term demographics in a friendly regulatory environment etc to allow for capital appreciation. 

EG. I have been buying a small pharma company in the opthalmic space, Harrow, HROW since May at $10, with good growth prospects and in an area with long horizon of medical need for the diseases it treats, they keep announcing better earnings each quarter, and stock now $44 in just 3-4 months, I've bought other companies with good products in the past like NVidia back in 2009 as they made the best graphics chip, G-Force, for gaming. I've also had to sell some stocks that went no where or declined when their "great" product turned out to not be so great, like buying a good property to see the neighborhood change over the years. 

Which is better? well that depends on you and your knowledge and your skill/luck etc and no one else. 

with stocks and with RE, sometimes you get the turn-around projects too, which can suck up your money and be losers or end up as huge winners, when the community recognizes the value add or the company turns it around. This month I am buying heavily into a tech company that the street hates and is dumping for fears of an accounting scandal. So, a risky reclamation project, like many shopping centers bought in potentially gentrifying neighborhoods. 

Academic studies both in Europe and US, show the average RE investor underperforms the public equity REITs by 3.5 to 4% per annum, but that's average, and that equity REITs have outperformed the SP500 by 2% over last 50/40/20 years (NAREIT data c1974 onwards) but not in the last 15 yrs, when SP500 has 15.1% annual return since 3/9/09 and has beaten most asset classes. longer term SP500 return is 8.4% nominal and 6.9% Real since 1801. 

you can do both, but focus your time on the one you love the most if you have a preference as each stock or property requires 50-100 hours of research time typically before pulling the trigger for me, 

best of luck Kyle

China has the best economic growth of any major nation in the world over the last 30 yrs from 1994, but Shanghai Comp is actually negative in real terms over that time, while SP500 up 1136%, why?

Well, do you trust anything in a Chinese company's 10-K?, no one else does either. They have millions of slaves and indentured servants who make our I-phone 16's, and almost everything Americans buy at Wal-Mart and Costco, but still their stocks can't catch a sustained BID. 

Is America the Greatest Country on Earth? Did the Trojan Horse have a wooden dick?

of course it is, no one's swimming across oceans to get into China, nor India, nor Russia, nor Saudi Arabia, and why not?

America has the 3 enlightenment Pillars that are true Civilization. 1) Rule of Law, 2) Freedom of speech/conscience, and 3) One life One vote

These 3 ideas are the air we breathe and water in which we swim, and give rise to actual and enforceable property rights, which allows for people to safely save, safely invest, safely create, and safely live a full and expressed life. Are we perfect? Heck no, but we are better than all the alternatives. And each generation has a chance and duty to get us all closer to perfecting that Perfect Union.

Freedom!!! (imagine Mel Gibson's voice at end of BraveHeart)  :)

For the last 20 years the Federal Reserve's dual mandate has been to prop up both the SP 500 and the Nasdaq, not its purported goal to maintain price stability and maximize employment. 5 days ago a collection of Democratic senators wrote a letter haranguing Jerome Powell and asking him to cut by 75 basis points. And four years ago, we all remember Donald Trump threatening to fire Jerome Powell if he didn't cut interest rates further at a completely unnecessary time, other than to help him try to win re-election. Both parties as long as I can remember want interest rates at 0. in order to inflate the assets of their donor pool which holds stocks, bonds and real estate. If you listen to the end of Powell's speech yesterday the most important part was rarely commented on by the media which is when he said, We will continue reducing the balance sheet. translation, They are continuing to let Mortage backed securities and US Treasuries roll off without renewed purchases. They have been doing this for two years now, and it is what's called quantitative tightening, The opposite of the quantitative easing over the past 15 years. This quantitative tightening fights inflation, and Most economists estimate that it adds another 100-150 basis points implicitly to the Fed funds rate so we have really been at 6.375 to 6.675% the last year. But now inflation has been tamed, core PCE run rate at 1.9% now, and headline CPI at 2.5%.  So why would the FED fight itself by doing Q.T. and cutting FedFunds Rate at the same time, as they have the opposite effect? 

I don't know, but I suspect, it's just to inflate the Markets which were up 2% today. One of the 800 economists who work there may have told them that since they decreased the M2 money supply by 4% over the last 2 years and currently now growing at only 1.26% not the pre-covid 6%, that they have stalled the plane, so forget the soft landing, get ready for some CHOP. So, they should have cut yesterday by 100, and they should have cut in July, but they don't want to crash the Markets (their true masters-as they are appointed by politicians beholden to asset owning donors). I think they will stop the quantitative tightening soon as well, but it won't help.  Inflation will continue to fall/unemployment to rise/the insider c-suite/director Sell/Buy ratio now over 25, (so the dudes running America think a Recession or hard landing is coming). So put your trays and seat backs in the upright position because we are probably in for a Hard Landing or at least a lot of turbulence.

Quote from @DJ Arora:

Quote from @Alex Tank:

I lost my money too in Norada Note. It is PONZI scheme. I am filing a suit in Orange County Superior Court and along with reporting to following government entity. 

If you don't try, you may not get anything. Be part of the "Class Action!" 

Report here:

1. Federal Trade Commission (FTC):
- https://reportfraud.ftc.gov/

2. Securities and Exchange Commission (SEC):
- https://www.sec.gov/complaint/select.shtml

3. Consumer Financial Protection Bureau (CFPB):
- https://www.consumerfinance.gov/complaint/

4. Internal Revenue Service (IRS):
- https://www.irs.gov/individuals/how-do-you-report-suspected-...

5. Federal Bureau of Investigation (FBI):
- https://www.fbi.gov/investigate/white-collar-crime

6. U.S. Postal Inspection Service:
- https://www.uspis.gov/report

7. State Attorney General's Office:
- Visit your state's Attorney General's website for more information.

 Alex - Similar experience with Norada investment!

 Hey D J sorry to hear about your possible/probable investment loss but out of curiosity and to educate others here. How did you hear about Norada Capital  management? And then what was your understanding of what specifically you were investing in (Real estate notes? etc) and what kind of returns were promised to you? And also, how much did you invest as a percentage of your investable portfolio?