All Forum Posts by: Amit M.

Safe to say that many punters who invested in low cap rate syndication deals, especially during the peak of the hype, are getting schlonged right now. 

What Joel said, yes

DST industry cheerleaders, meh

@Jon Taylor I agree with those basic generalities. But I’m asking in practice how DSTs have fared in the last few years. Have more gone belly up? How about reducing or eliminating quarterly payments? Sure DSTs are more conservative in nature than syndications, but what are the statistics on their overall performance been over the last 5 years? Particularly the DSTs focusing on multi family, as the rise in vacancies and lower rents must have effected them too, especially in markets like Austin, Phoenix, Vegas, etc.

@Jon Taylor so given the info you have access to, can you give us an overall idea of how DSTs have preformed compared to similar apartment syndications over the last several years? How about DSTs in the office, retail, etc. spaces? I'm particularly interested in pre vs post Covid DST acquisitions, and how they have fared. I imagine that some DSTs are failing, but the question is how prevent that is, and what are the circumstances of those DSTs in trouble versus those that are meeting their return expectations. We know that there is a bloodbath in apartment syndications, so I'm wondering how they fared to DSTs.
Thanks

As @Joel Owens mentioned above, there have been *a lot* of multi family syndication fails recently. I'm wondering if the same thing has been happening in the DST space? Anyone with some data on this? Please chime in :)

“Should I start with a condo (about $400K for a studio/one bedroom) since that would be less than a single family home (800K+)?”

FYI- Those prices are at least double, for decent neighborhoods in SF.

@Frank Chin thanks for those specifics. We had similar ups and downs, but overall the market went up a lot as long as you held. 2 questions for you:

1- what part of NYC did you invest in? (I’m guessing Queens or Brooklyn)?
2- do you think manhattan had smaller down markets (and more appreciation) than your location?

@Frank Chin this only works if the market continues to appreciate. If your relatives leveraged 10 years ago then they did so in a great market. I did the same thing and made a lot of money strictly by smart leverage. BUT when the market in high appreciation areas like San Francisco and NYC tanked, mainly due to work from home and high interest rate, I sold my lesser locations in 2021/early 2022 (still a market high, even in my market San Francisco) and kept the best locations debt free.

I could easily leverage again now, but I don’t think we’re going to have the strong appreciation runs that we have had since the mid 1990s. For the past 30 years I rode that ride well (in spite of the dot com bust and mortgage crisis), and made a lot of money. But now I prefer to keep fewer debt free quality properties, which are easy to keep rented with great tenants, and check out of the leverage game. I just don’t see the crazy high appreciation coming back anytime soon. Stable appreciation yes, but what we had in the Bay Area and costal CA in general over the last 30 years was a one time, tectonic and largely tech based phenomenon that won’t be repeated imo. If you were fortunate to have made a lot of money during the run ups, it’s important to know when to hold ‘em and when to fold ‘em ;)

I agree with both of these comments. Especially if you’ll be paying off helocs. 
I essentially did this move in 2021-22, and kept my best properties debt free. It turns out to be A LOT LESS work.  Not only because you reduce the number of properties, but also because you get rid of the difficult ones. Now I just have a few high end condos that are much easier to deal with, so we can spend 4 months of the year out of the country :) Best. Decision. Ever. 
Good luck, and let us know what you decide to do. 

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