All Forum Posts by: Paul Azad

maybe Google just doing this like they did with Google Flights to leverage their negotiations for higher advertising dollars from VRBO/AIRBNB etc, like they did with Expedia/Hotels.com/United/Delta etc and they have no real interest in making it a discrete profit center but just a strong profit stimulant to their core advert business.

buy more Google stock usually a winning formula last 20 years

Good discussion on this topic here: 

Many Multi-Family properties acquired in 20/21, are down 25-35% due to rise in interest rates in 22-23, often wiping out much of the equity, so property unlikely to be sold in next few years, may be hard to find a buyer just now for units, but good luck. May want to post a reddit/syndication thread

Those Annuities don't sound great, 6.4% yield if just you on the policy and only 5.8% if you add your wife to inherit the policy if you die someday (sorry but high likelihood, nothing lasts forever)

consider as recc above, find a few good syndicators with several upcoming deals you can identify within 45 days of the sale of your condos (sell all 15 as a package to some investor), then invest as a TIC, tenant in common, with one syndication deal, there won't be any fees, then make sure it's a longer term 10 year at least investment, then keep rolling until death. Then kids get the step-up. I recc NNN-multi-tenant large shopping centers that due cost segregation analysis at purchase to get maximum depreciation up front. CRE retail has good fundamental outlook next 5-10 years due to lack of supply. This segment has been big picture stable last 100 years. Also, multifamily (now down 30%) but wait 1-2 more years for massive new supply to be absorbed. I just invested in 3 different Data centers, they are too high risk for most people to consider, especially in retirement. Industrial is great too, long term, but a little overpriced still for now.

or sell, pay the taxes, invest in VOO, get 8-10% next 30 years, or invest in REITs, get 10-12% next 30 years

or buy MUNIs, i'm getting 5% tax free, which is an effective yield of  7.94% for part of my emergency fund

If you die 1 day , 1 yr, 1 decade after you sign an Annuity, they keep all your money, your wife/kids get nothing, unless you add them, but then the returns do go way down and they were low to begin with, Remember the Annuity company is investing in VOO and last 20 years got 13% a year, (long term 8.4% since 1801) they pay you 6 and keep the rest, good luck brother :)

HL Menken "No One ever went broke underestimating the intelligence of the American public."

Putting aside AshCracks utter disdain for the LP investors, anyone willing to invest with them, FUND 3, given their current/recent track record needs to visit with a psychiatrist and also an elementary school math teacher to start with. 

Prediction, FUND 3 will be fully subscribed in record time

Everywhere I have traveled this year, New York, Paris etc Hotels are much cheaper than VRBO/AIRBnB and the experience and safety, location, quality of beds, bathroom fixtures are better at Hotels, but 5-10 years ago it was the opposite. I suppose the inflation adjusted 88% home price appreciation since 2000 has forced the nightly rates up to point now where short term rentals are just an all around crappy experience. Well, was nice while it lasted. 

Hi Brynn, there are 1031 exchange intermediary companies that can source deals for you but likely charge a commission and may not be aligned with your interest in getting best quality investment

you can join the 506investorgroup.com, which has hundreds of active CRE-passive investors who are always posting new deals, and reviewing them and have long threads on each investment going back years tracking how they have done.

you can google syndicators around the country and start contacting them and looking at their deals now and get a feel for which ones are good operators, so you will have a dozen or so lined up for when you need to invest

you can start networking locally with RIAs or lenders and find out who are good/active CRE syndicators

good luck :)

 The link above has most of those details, The fixed loan is from an insurance company, is interest only years 1/2/3, then no defeasance penalties up to year 10, they plan to sell/re-fi in 5-7yrs. There are 2 buildings, the first in Fort Wayne, near airport houses 1 tenant ZF, a german auto-parts supplier, been in the space x 22 yrs and only has 2-3 years left on lease but space is custom for them and they have long contracts from automakers for parts for legislatively mandated discontinued car parts, when car models get shut down, the manufacturers have to continue to supply parts for 10-15 years by law, and ZF gets many of these contracts, also all work force very established there so company less likely to move, but even if they do, Heritage could carve up the 1, 100k space into 4 smaller spaces and then get 50% more rent. (from $4 to $6 a sq/ft) The second building in north of Fort Wayne by 20-30 miles in Garret Indiana, with 100k and with four smaller tenants, including Vanderbilt Pontoon boat company, a bakery distributor, a home Leaf gutter supply place etc. 

Heritage owns 1.1 million square feet of industrial in Indiana already so this 200k adds to their footprint, They have 10 million sq ft in office/multi-family and industrial in 20 states with >2 billion AUM. i clipped some of the financials and debt info below

and since you are the DSCR Master,

and

Carlos, I know that initial and rising DSCR is making you a little moist :)

Hi Ken, coming from a drunk sloth level passive LP perspective, you have a fair approach, however the projected IRR is lower than most current offers out there so may be difficult to market to cursory investors, but your 80/20 is quite reasonable compared to most others. Check out Neal Bawa's latest offering by his GroCapitus group, BTR 92 townhomes in Idaho Falls. 18%IRR, 75/25 split, then 50/50split above 19%IRR or as docs say >25% AAR, he has 3 share classes, 6/7/8% preferred returns for higher investments
02. Equinox on Lincoln V27 Investment Summary.pdf - Google Drive

Your suggested fees are on the lower side of what's out there, but also lower IRR projected. I don't pay much attention to IRR alone, as GP can make up any number there he wants by sliding to more aggressive cap rate compression projections at exit, one can move IRR from 10-20% easily. I look at Equity Multiple and duration, local market, macro-environment for asset class, supply/demand, GP experience/longevity, and about 50 other things.

I posted a link to an interesting industrial syndication offer last night on the syndication forum, also 80/20 after 8%, then a bump to 70/30 above 14%IRR , check that out too, obviously different asset class/and existing, but their deck can give you an idea on what the fund raising environment is like too

NE Indy Industrial Portfolio (heritagegroupcapital.com)

good luck :)

Thankyou Brian, good point. I suppose any sponsor/GP could sell property early if they needed capital back as they as GP have full control. My guess would be that as this GP is doing 1031 as a TIC into the deal he would be a little less likely to want a sale, which is a taxable capital event, and would like to keep his money invested and sheltered from taxation as long as possible which tends to fit with my investing style of long term/preferably forever investing.

       I frustratingly see so many deal offers, particularly in Multi-Family space, where GP/sponsor is putting nothing or next to nothing into the equity portion and is collecting 2-3% acquisition fee/ 0.5-1% loan origination fee/ 1.5% yearly asset management fee/ 1-2% disposition fee and then 50/50 splits to 60/40 splits over fairly modest hurdle rates of like 14-15%, and it seems this latter structure incentivizes GP to take more risks particularly with debt options. It seems rather difficult to find GP - LP alignment today. :(