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  • Ready for syndicated real estate investing

    I have done well in the market with index funds (until last week) and I now feel I am ready to branch out and put some money into syndicated real estate. A friend of a friend recommended Buck Joffrey (who does the Wealth Formula Network podcast) and a company called Western Wealth Capital. I have learned a lot about real estate from WCI and other websites, but am still a bit naive in the arena. I will certainly start with a small percentage of my portfolio.

    Has anyone done deals with this company or have any firsthand knowledge?

    Thanks for this and everything.

  • #2
    I listened to a bunch of Buck Joffrey's podcasts (including one where he interviewed Jim, the WCI..), researched his investments, and decided he's not at all who I'd like to invest with. First of all, and granted this might be the weakest of reasons, I find it hard to listen to him as he's incredibly full of himself, and self-righteous in terms of his viewpoint - which is essentially that anyone who invests in the public stock/bond markets is a true sucker, and "Wall Street, index funds, and 401k's are for losers, etc.." So he's hard to listen to just in terms of his very narrow focus and speaking style. Second, he touts (and profits off) several very dissimilar investments, including "infinite banking," (which I believe involves lending money from inside whole life insurance policies), multifamily real estate, and life settlements - I personally focus non-stock/bond investment choices (real estate, which is about 1/3 of my portfolio) recommendations from people who know it well, not the jack of all trades. Me putting in a central line in the ER - bad; the ER doc scoping a variceal bleeder instead of me - bad. You get it. Personally, I'd look elsewhere.

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    • #3
      There are so many real estate companies out there that there is no reason to invest with anyone if there is any reason whatsoever you don't like them. I seriously am seeing at least a dozen pitches a week. It would be a full time job just to evaluate them all. It's pretty much impossible to tell who "the best" is, although you can often identify people, firms, and deals you aren't comfortable with. I don't know the relationship between this company and Buck so I wouldn't necessarily hold that against them. I'm not even necessarily against life settlements, multi-family real estate, or even infinite banking (as long as you really understand how it works, more on that here: https://www.whitecoatinvestor.com/a-...ife-insurance/, I mostly just hate the way it is sold as some fantastical deal which it is not).

      I agree with your decision to tread carefully and slowly in this space. As your assets grow and you watch a few deals go full circle (takes years) it all becomes a little easier to figure out what you like and dislike.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        Thanks for your input, positive and negative. I am definitely on the WCI side of the coin.

        Real estate is something I have been wanting to get into, but to your point, "there are so many deals out there!" I looked into 37th Parallel, but found some negative comments about investor vetting that would seem to be a red flag. I don't know who to trust, because the playing field doesn't seem even. Much more difficult than picking index funds.

        Buck is definitely a character, but I have a good reference and WWC looks solid.

        I guess I will just start small and ease into it with multiple small deals.

        Do you have any good recommendations for other syndicated multi-family companies that I should look into?

        Thank you for all that YOU do.

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        • #5
          I invested in many projects with Western Wealth Capital via Buck. My initial investment was with Sun Wood apartments in 6-2018 of $100K. They sold the building in 12-2019 and I had ROI of 30.1% with Annualized Return of 20.2% - see the attached statement. You probably understand the Infinite Return concept that they use for syndication. Since then, I have invested in Valley Oaks in Dallas TX, Parc in Atlanta GA, and Stone Canyon in Houston TX with each $100K. They are totally passive income. The great thing about it is that I created many life insurance policies to store all my income / wealth. Then I borrow against it at 5% interest cost and invest in these projects using all insurance company's money. By not using my own money directly I avoid the lost opportunity cost of using my cash for investment, as my cash continues earning uninterrupted compound interest in the policies.
          Attached Files

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          • #6
            Hi,

            2019 was the first time I invested in crowd funding in a hotel. It is through Napali Capital LLC. Do you know anything about this company?

            They have sent me a K1 form couple weeks ago. We invested $100k and they have shown a $54000 in net rental loss. We file jointly and our adjusted gross income this year was about $356k. Once we input information of K1 form in turbo tax, we did not get any tax break because of the net rental loss of $54k. Called a couple of Turbo tax CPA's and they said deduction is phased out due to our income level. We can show this year's loss against other year's profit- if and when we get profit. Does that sound right to you? Do you have any suggestion as to how to input information from K1 form. Your advice would be highly appreciated.

            Thank you

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            • #7
              Originally posted by [email protected] View Post
              Hi,

              2019 was the first time I invested in crowd funding in a hotel. It is through Napali Capital LLC. Do you know anything about this company?

              They have sent me a K1 form couple weeks ago. We invested $100k and they have shown a $54000 in net rental loss. We file jointly and our adjusted gross income this year was about $356k. Once we input information of K1 form in turbo tax, we did not get any tax break because of the net rental loss of $54k. Called a couple of Turbo tax CPA's and they said deduction is phased out due to our income level. We can show this year's loss against other year's profit- if and when we get profit. Does that sound right to you? Do you have any suggestion as to how to input information from K1 form. Your advice would be highly appreciated.

              Thank you
              Yes, you just carry it forward. Yes, I know of Napali Capital. Run by an emergency doc as I recall.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #8
                Thank you very much for replying! so not getting any tax cut this year sounds correct, given our income situation?

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                • #9
                  Hi
                  I have been filing taxes as a sole proprietor. I am thinking of forming S corp this year. Do you have any advice on forming PA vs. PLLC? Is there any advantage in one over another?

                  Thank you!

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                  • #10
                    I've been investing in syndications for roughly 4 years now and wish I had started doing it sooner in my career. We have about 30% of our investments in syndications and the other half in index funds. I wanted diversification and passive income after we became consumer debt free to start the process of retiring earlier.

                    Comment


                    • #11
                      Originally posted by [email protected] View Post
                      Hi,

                      2019 was the first time I invested in crowd funding in a hotel. It is through Napali Capital LLC. Do you know anything about this company?

                      They have sent me a K1 form couple weeks ago. We invested $100k and they have shown a $54000 in net rental loss. We file jointly and our adjusted gross income this year was about $356k. Once we input information of K1 form in turbo tax, we did not get any tax break because of the net rental loss of $54k. Called a couple of Turbo tax CPA's and they said deduction is phased out due to our income level. We can show this year's loss against other year's profit- if and when we get profit. Does that sound right to you? Do you have any suggestion as to how to input information from K1 form. Your advice would be highly appreciated.

                      Thank you
                      Yes, I have invested with Napali Capital (Dr. Tom Black et al) and have had good experiences. I benefit from aggressive depreciation losses since it offsets the other passive income that I would have had to pay income tax on. PM me for more info if you want.

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                      • #12
                        Any advice on how to learn how to vet real estate syndication deals? Any books/courses anyone recommends?

                        Comment


                        • #13
                          Originally posted by jacktorrance View Post
                          Thanks for your input, positive and negative. I am definitely on the WCI side of the coin.

                          Real estate is something I have been wanting to get into, but to your point, "there are so many deals out there!" I looked into 37th Parallel, but found some negative comments about investor vetting that would seem to be a red flag. I don't know who to trust, because the playing field doesn't seem even. Much more difficult than picking index funds.
                          Can you elaborate on your 37th Parallel concerns? I have a few investments with them and still feel naive in this syndication thing.

                          Comment


                          • #14
                            polaris In regards to vetting sponsors, here are some of the better questions, in my opinion, I get as a sponsor myself that may be helpful for you:
                            • Who gets paid first, what kind of upfront fees do the sponsor charge?
                            • Is the sponsor equitably aligned with the investor?
                            • What is the track record and approach of the sponsor?
                            • Is the investment goal aligned with investor goal? For example, a cash flow seeking investor shouldn't invest in a high value add project that will be sold as soon as the strategic plan is exectued, etc.
                            • What are the economics of the underlying property? Are the assumptions made attainable? How much of the upside is based on market appreciation and how much actual value opportunity identified (rebidding expenses, better marketing, renovations needed, etc.)
                            • Who is responsible for the debt? Are their any personal guarantees required of the investor?
                            • Referrals
                            It may be helpful to have a CPA or real estate professional help provide some analysis.
                            Noah Swank, Real Estate Investment Advisor
                            n[email protected]

                            Comment


                            • #15
                              Originally posted by toofy View Post

                              Can you elaborate on your 37th Parallel concerns? I have a few investments with them and still feel naive in this syndication thing.
                              Mostly under performance of actual vs. pro forma from what I heard from other investors. Its hard to underperform in texas multifamily with all the cap rate compression.

                              There was a new book released by CEO of Praxis regarding RE syndication for the LP. Really excellent book .

                              https://www.amazon.com/Hands-Off-Inv...2569247&sr=8-1

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