All Forum Posts by: Sanjay Bhagat

The 4 real estate cylces have been hit. We may or may not be done with the recession phase, but we certainly went through recovery, expansion, and hyper-supply.

Reach out to each individual syndicator that you like to discuss your questions. They should be able to provide you with a track record list. Ask them if that is a comprehensive list of all deals they have been involved in.

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Nicholas,
I agree with you to a "greater" extent. A investor in syndication invest in the person more than the deal. But in the end/exit , the deal tends to be more important.

Sanjay

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Quote from @Nicholas L.:

@Brian Burke

and in all these requests / proposals for data and analysis, doesn't the importance of relationships get overlooked?

i haven't read your book, but i've listened to all of the podcasts you've been on, and you talk about the importance of the character of GPs. where is that in what OP posted? if anyone could sit down at their computer and find the perfect fund or syndication where past results guaranteed future success then no one would ever lose money.

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Quote from @Brian Burke:

@Sanjay Bhagat BiggerPockets doesn't do this, but it's sister website, www.passivepockets.com does. They have a sponsor directory where sponsors can upload their track records and slide decks. Keep in mind this is sponsor-provided material, not something that the site discovered through research, nor verified. But it's a start.

While track record is very important, learning how to interpret a track record is just as important. You could view a sponsor's history and look at the returns shown on their track record, but without context it's meaningless. Are the returns gross or net? Are they projected or realized? Were the entry and exit points contained within an overall bull market?

Things to look for are how long the sponsor has been in business. Did they suffer loss of principal during down cycles (or even up cycles for that matter). Is their current portfolio distressed, or was the majority of their current portfolio purchased at the peak of the market, indicating that they might be in distress in the near future. What financing structure do they use--max LTVs and loan maturities.

One thing that is especially misleading are your questions 2 & 3. Comparing what was promised to what was delivered lacks context. There are plenty of sponsors that projected high-teens returns five years ago and delivered in the forties three years later. It was more lucky than good and says very little about the sponsor's abilities. Conversely, sponsors might have projected mid-teens in 2020 and deliver a zero when they sell in 2025. That doesn't make them bad, per se, it is just a very difficult market right now. You'll learn more about the sponsor by learning how they handle an adverse market, and how they survive it, than by comparing projected vs actual without context.

Good morning Brian,

I have heard so much about you that it is mind boggling.Thank you for answering to a newbie like me.

I had to read your post 3-4 time to comprehend it. Reading and comprehend are two separate entity.I am new to syndication and have never invested in it. Thank you for pointing me to Passive pockets.Thank you again for your insights on returns in bull vs bear cycles. On hind sight, I agree with you. My questions 2 and 3 are misleading while taking into context the bigger picture which you clarified.

I do not know how to track record of a syndicate. Having said that:

1) Should I hire a third party accountant to interpret the deal sponsor track record for due diligence? If yes then what should his/her credentials should be and "approximate" cost?

2) Get the sponsor accountant/CPA/CA to certify the sponsor result?

What do you suggest?

Thank you again

Sanjay

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@Chris Seveney

Thank you Chris for your reply and the link. The link was helpfull as a starting point for syndication.

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Fort Lauderdale, Florida

1) Is there a syndicate/s in BP which has gone through all the 4 real estate life cycle (recovery, expansion, hyper-supply, and recession) ?

2) What is their track record of delivering what they promise to deliver in percentage ?

3) Is there a chart in BP which tracks what is promised and what is delivered since inception by the Syndicate/promoter/General Partners?

4) If yes to #3, then may I have the link for such a information from a Limited Partner (investor) perspective?

5) If no to #3, then BP should start something in those line ( My 2 cents)?

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@Jonathan Greene Thank you for recommending Brian book. I intend to read it. I have also read and watched Scott's video on this link https://www.biggerpockets.com/blog/biggerpockets-money-podca...

Very insightfull

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Fort Lauderdale, Florida

@Chris

Thank you. Your reply was thoughtful and balanced. As a moderator can you guide me:

1) Is there a syndicate in BP which has gone through all the 4 real estate life cycle (recovery, expansion, hyper-supply, and recession) ?

2) What percentage is their track record of delivering what they promise to deliver?

3) Is there a chart in BP which tracks what is promised and what is delivered since inception by the Syndicate/promoter/General Partners?

4) If yes to #3, then may I have the link for such a information from a Limited Partner perspective?

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Fort Lauderdale, Florida

I have a dilemma. This is my first post in Bigger pockets.

S&P 500 index fund has given a historical AAR (Average Annual Return) of 10 % in the last 60 years and 14.5% AAR in the last 15 years as of today. The AAR does NOT include dividends. With margin trading of 20-25% of initial investment, when stocks market collapses with dollar cost averaging as a strategy , leverage of the initial investment in stocks, the AAR can be more.comparable to most syndication (compared to 20% down payment in real estate).

I have been following BP forums for the last 4-5 months and have spent almost 4-500 hours. Most syndicate offer 20%. I have never invested in syndication.

I understand diversification in different asset class (precious metals, real estate stocks etc). But if AAR is important and someone is starting out. why syndication is better than real estate for the next 10 years? My risk appetite is 80%. I do understant the team risk, market risk and deal risk in syndication as Scott in his podcast said.

Thank you for your insights

Sanjay

1 Vote

Fort Lauderdale, Florida

All Forum Posts by: Sanjay Bhagat

Sanjay Bhagat has started 2 posts and replied 10 times.

Post: Track record of Syndicate

Post: Track record of Syndicate

Post: Track record of Syndicate

Post: Track record of Syndicate

Post: Track record of Syndicate

Post: Real estate syndication Vs S&P 500 index fund

Post: Track record of Syndicate

Post: Real estate syndication Vs S&P 500 index fund

Post: Real estate syndication Vs S&P 500 index fund

Post: Real estate syndication Vs S&P 500 index fund