All Forum Posts by: Mark Robertson

If you go the syndication/crowdfunding route do as much research as possible on the sponsor.  They will make you or break you.  There are some good ones out there, but plenty of guys with no clue and are in it for the fees. Whatever you do,  ignore the ones that email you or ask you to PM them for more information.

Limited to 99 investors.  14 spots left. $6.2 million committed to date

The 506 Investor Group is launching its first 506c Fund of Funds SPV. With one $50k or more investment into the SPV, you get access to 3 quality real estate funds with otherwise very high minimums.

Grubb Fund VI - Current minimum is $1 million

Fontstreet Capital Fund II - Current minimum is $250K

BroadStone NNN Fund - Current minimum is $250K

The SPV has a 1 time 1% fee to cover SPV formation cost  and 10 years of K1's and distributions expenses. The carry is 4%. More information is available at the 506 Investor Group Website Instant diversification and access to funds that is difficult for the average investor. For accredited investors only.

Run Forest Run! Guys that pitch deals via Youtube hope to find the uninformed investor so he can rape them with that fee structure. OMG.

Sponsors should get paid for success and align their interest with investors. 1% asset management fee on equity, 8% 70/30 with no catch up and 1% acquisition fee is the most you should accept. Anything higher...walk away. Many will charge even less.  Read the PPM.  You will be surprised at what sponsors will try and get away with.  In the old days, the unsophisticated investor had no idea what a fair split was.  The jobs act and the transparency of the internet has changed that.  Thank goodness.

There are 2 crowdfunding portal models. One is a listing platform (Real Crowd and CrowdStreet) and the other is the middlemen platform (Realty Shares, Ifunding, Realty Mogul, Fundrise).  The middle man platform concept is pretty much dead. Extra fees and very little benefit from the "extra layer"  of Due Diligence. In fact iFundng and Realtyshares are out of business and Realty Mogul and Fundrise are for the most part just eReits.

RC and CS do a good job of screening sponsors, but you must do your due diligence on the sponsor.  They are a great place to start, but they are only the first step. Never invest with a sponsor that reaches out to you privately on BP.... It will happen.  I suspect your inbox is pretty full. 

MH University and then MH academy. I wonder who was first and who borrowed (stole) the idea?

It should work out if the underlying investment performs as projected. They still earn their 1 to 2% asset management fee.  If the project is floundering, you money is very much at risk. They will still service and distribute cash flow.  I suspect the days of the RS hiring lawyers to fight bad sponsors are behind them. The unscrupulous sponsors will just stop paying.  

When Bolstr went out of business, a lot of borrowers stopped paying because they could. Lesson learned...Always invest directly with a well researched experienced sponsor. 

For deals that are current and "working", there should be no issues.  The 1 to 2% asset management fee is plenty to cover distributions and K1's.  However, on all their problem investments, it is another story.  I suspect they will not spend the resources to  hire legal council etc. and fight for the investors.

They have plenty of dogs.  I stopped investing with them in 2015. 2 of the 5 remaining investments are in jeopardy.  One is in the middle of a lawsuit. (New England fund)  I suspect that and others like it will be a write off.  Hope I am wrong, but who is going to fund  the fight. Their long term  Investor relations employee's last day was today.

I would run and not walk away.  There is plenty of deal flow available to the accredited investor. There is no reason to accept a 6% 65/35 split. If its not at least 8% 70/30, I want even bother looking at the fees and the rest of the due diligence.  The ultimate goal is to get terms similar to family offices, ie 10% 80/20.  6% - 65/35 is just pure greed on the part of the sponsor.