Get out of syndications?

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sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Get out of syndications?

Post by sillysaver » Sat Aug 04, 2018 8:33 am

In 2016, I liquidated most of my IRA's and cashed in a 401k to invest about $170k in two multi-family partnerships.

One of them did a refinance at the beginning of this year and distributed 90% of capital. I quickly reinvested the proceeds by funding Roth IRA's for me and my wife and put $50k into another deal in Dallas that came up at the same time.

I'm getting just under $1000/mo in tax-free income and expect that to go up to $1300 once the third deal starts cash-flowing. The returns have been OK, but I'm worried about the lack of diversification and the concentrated exposure to a single asset class. The two big deals are in the same geographical area, San Antonio, Texas.

Applying some zero-based thinking based on what I know today, I would rather invest a limited percentage of my portfolio (maybe 20%?) in a fund -- perhaps some un-traded REIT's to capture the liquidity premium, or just a broad-based REIT index -- to get exposure to different sectors of RE and different parts of the capital stack (debt, preferred, equity, etc).

At this point, this is what our assets look like:

- About $390k in the 3 MF deals
- $270k in two rental houses, one of which is co-owned by my mother-in-law. I'd rather sell these, too, but am limited on what I can do. We'd lose money on the other one if we tried to sell, which we bought late last year. At least it's easy to dispose of, unlike the partnerships.
- $100k in home equity (residence)
- About $100k in liquid assets (401k's, IRA's, taxable accounts, savings and checking)

As you can see, we are very concentrated in real estate.

My goal is to accumulate more liquid assets over the next few years. If we could get to about $500k in our retirement accounts, I think that would be a good place to be.

I know it's possible to sell shares to another member. Someone had an "emergency" and liquidated his shares at the original value to another investor. However, I've only seen that happen once.

The sponsor in one of the deals (the lesser performing of the two) is now talking 1031 exchange and buying a larger building. It got me thinking do I want to keep expanding my portfolio in a single geographical market? With the concentration and lack of liquidity, I'm questioning if this investment is suitable for us and was wondering how do I go about getting out of these deals. Or should I stay in and just let it keep growing and generating income? It seems like the market has topped, but it has seemed that way for several years now, with cap rates at ridiculously low levels, prices at record highs, and interest rates and supply starting to creep up. On the other hand, I see no stopping the Texas economic engine, at least not yet, which has been great for real estate.

Due to the difficulty of changing, I'll probably just stop funding any more deals and use the income and distributions to fund my other investments. I am in a Vanguard Target date (2040) fund in my 401k. My wife has index funds that mirror the same portfolio in her 403B, and in the other accounts we have a mix of cash and ETF's. I own GAA, but have been thinking of switching to a more aggressive asset allocation with Schwab index funds.

Grt2bOutdoors
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Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Get out of syndications?

Post by Grt2bOutdoors » Sat Aug 04, 2018 8:41 am

Real estate is all about location, location, location. If you are living in Dallas, you ought to be aware of economic conditions, if not read the Federal Reserve Beige Book, the section on Dallas, it will talk about the real estate market and general economic conditions.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Sat Aug 11, 2018 9:47 am

Based on all the data I've seen, apartment growth (rents, NOI) is slowing down, but still in the expansionary phase, in the markets I'm in. Texas has benefited from a long boom due to migration that continues.

My question is more about whether it's a good idea to be so concentrated, and if I shouldn't try to exit these vehicles and diversify.

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Sat Aug 11, 2018 9:52 am

If I sell or take the distributions and don't reinvest in direct RE or syndications, then the income will no longer be tax-deferred because there will be no depreciation. That and the illiquidity is a big disincentive. REIT's are a good alternative but best owned in a tax-deferred account.

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Sat Aug 11, 2018 10:37 am

sillysaver wrote:
Sat Aug 04, 2018 8:33 am
In 2016, I liquidated most of my IRA's and cashed in a 401k to invest about $170k in two multi-family partnerships.

One of them did a refinance at the beginning of this year and distributed 90% of capital. I quickly reinvested the proceeds by funding Roth IRA's for me and my wife and put $50k into another deal in Dallas that came up at the same time.

I'm getting just under $1000/mo in tax-free income and expect that to go up to $1300 once the third deal starts cash-flowing. The returns have been OK, but I'm worried about the lack of diversification and the concentrated exposure to a single asset class. The two big deals are in the same geographical area, San Antonio, Texas.

Applying some zero-based thinking based on what I know today, I would rather invest a limited percentage of my portfolio (maybe 20%?) in a fund -- perhaps some un-traded REIT's to capture the liquidity premium, or just a broad-based REIT index -- to get exposure to different sectors of RE and different parts of the capital stack (debt, preferred, equity, etc).

At this point, this is what our assets look like:

- About $390k in the 3 MF deals
- $270k in two rental houses, one of which is co-owned by my mother-in-law. I'd rather sell these, too, but am limited on what I can do. We'd lose money on the other one if we tried to sell, which we bought late last year. At least it's easy to dispose of, unlike the partnerships.
- $100k in home equity (residence)
- About $100k in liquid assets (401k's, IRA's, taxable accounts, savings and checking)

As you can see, we are very concentrated in real estate.

My goal is to accumulate more liquid assets over the next few years. If we could get to about $500k in our retirement accounts, I think that would be a good place to be.

I know it's possible to sell shares to another member. Someone had an "emergency" and liquidated his shares at the original value to another investor. However, I've only seen that happen once.

The sponsor in one of the deals (the lesser performing of the two) is now talking 1031 exchange and buying a larger building. It got me thinking do I want to keep expanding my portfolio in a single geographical market? With the concentration and lack of liquidity, I'm questioning if this investment is suitable for us and was wondering how do I go about getting out of these deals. Or should I stay in and just let it keep growing and generating income? It seems like the market has topped, but it has seemed that way for several years now, with cap rates at ridiculously low levels, prices at record highs, and interest rates and supply starting to creep up. On the other hand, I see no stopping the Texas economic engine, at least not yet, which has been great for real estate.

Due to the difficulty of changing, I'll probably just stop funding any more deals and use the income and distributions to fund my other investments. I am in a Vanguard Target date (2040) fund in my 401k. My wife has index funds that mirror the same portfolio in her 403B, and in the other accounts we have a mix of cash and ETF's. I own GAA, but have been thinking of switching to a more aggressive asset allocation with Schwab index funds.
Those syndication deals are probably paying you at least a 16-20% IRR. You should try calculating it sometime and post it here. Index funds won't give you those returns, nor the net tax benefits.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Sat Aug 11, 2018 7:00 pm

Hey Doc, you're probably right. I was downplaying the returns, but they are higher than what I can get in index funds. However, I think it's fair to say these investments involve more risk.

You post a lot about RE here. Do you have any index funds or stock/bond investments?

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Sat Aug 11, 2018 7:16 pm

sillysaver wrote:
Sat Aug 11, 2018 7:00 pm
Hey Doc, you're probably right. I was downplaying the returns, but they are higher than what I can get in index funds. However, I think it's fair to say these investments involve more risk.

You post a lot about RE here. Do you have any index funds or stock/bond investments?
I'd say in a recessionary environment, these investments are definitely LESS risky. As long as you find reasonable LTVs (60-70%), and experienced operators. The thing is, if these buildings produce a 8-12% dividend/income, even if property values go south, you are totally fine and are still cash flowing. Vacancy rates actually went DOWN in '07-'09 in many residential multifamily submarkets. Manufactured homes and self storage did even better. If you are holding equities and the market goes south, you are screwed. A 1.8% dividend won't save you if equities go down 10-20%.

Yes, currently I have roughly 15% of my net worth in index funds. For me this is probably too much. The tax benefits are not nearly as good as with real estate. To date, I legally have not payed any tax on my rental real estate income, since 2012. I have actually offset my W-2 income with paper losses from real estate, despite having positive cash flow into my account monthly. I typically like to be 80% real estate/10% equities/10% cash. That is my ideal strike zone.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Sun Aug 12, 2018 11:15 am

WanderingDoc wrote:
Sat Aug 11, 2018 7:16 pm

I'd say in a recessionary environment, these investments are definitely LESS risky. As long as you find reasonable LTVs (60-70%), and experienced operators. The thing is, if these buildings produce a 8-12% dividend/income, even if property values go south, you are totally fine and are still cash flowing. Vacancy rates actually went DOWN in '07-'09 in many residential multifamily submarkets. Manufactured homes and self storage did even better...
This is the narrative I have heard, too, however I've read some analysis that suggests otherwise. This goes into some detail about what happened in the last downturns (1970's, 2007-2009):

https://www.therealestatecrowdfundingre ... ilding-End
https://www.therealestatecrowdfundingre ... hink-Twice

Excerpts:
If apartments are really recession-proof, there should be a ton of sponsors who have gone through at least one full real estate cycle. In reality, such sponsors are rarer than a purple cow. (See the very short list of Top Full-Cycle Sponsors for 2018). This is the first hint that perhaps the risk on some of these pitches may not be fully stated.

What does the data say? The average apartment got hammered and lost 37.5%. And it took 7 long and painful years to recover.

Some local markets did better and some did worse. I've seen more than one sponsor claim that their area did better, only to see the data contradict them. So I personally always double-check and don't take anything at face value.).

Why does this matter? Price drops are a problem because they usually make it impossible to exit. (This is especially true for value-added and opportunistic strategy investments which rely on price appreciation much more than core and core plus). So this often forces the investment to hold onto investor money longer than anticipated. For example, a 3 to 5 year value-added flip, might lock up the investor unexpectedly for 11 to 15 long years.

That's not all of the potential bad news though. During this time, the short-term debt that's financing the property has to be renewed to avoid going bust. This can be a double whammy and cause a really difficult problem.

First, in the last recession many banks completely froze their lending. So an investment relying on that would've been in big trouble.

Those deals that were fortunate enough to get financing, but which were burdened with high LTV loans, found a second problem. The loans they were offered were much smaller than they asked for, because the prices had dropped so much. So to avoid implosion, they had to go back to investors and ask them to pony up even more cash....

While the above are serious issues, there still some other things to worry about in these deals. Unlike prices that sometimes avoid drops, rents and occupancy always drop in EVERY recession. That can be a problem.

The average property rent dropped and took 3 years to recover. Vacancies were the same...

"But Class B Will Be Just Fine! Right!?"

This pitch has gotten so popular, that I'm going to talk about it explicitly for a second. 10 or 15 times a week, I see a sponsor claim that their apartment deal is exceptionally recession proof because it is Class B or Class C. (Class A is newer/luxury housing. Class B is older/workforce housing. And class C is even older/"affordable housing"). They point out the (quite true) fact that it's too expensive to replace such housing, so there isn't a lot of supply. So, they claim, there will always be lots of demand from people wanting to rent, even in a recession. And this prevents them from going down.

But does the data support this? Here's a look at class B performance in one supposedly recession proof market: Dallas-Fort Worth.
He shows the following chart showing effective rent growth in DFW, one of the better markets for multifamily in the past few years:

Image
An investor expecting a recession proof investment would've gotten a very rude surprise. As you can see, class B rents took a significant hit for 3 years, and did much worse than class A (which barely went negative at all). Class C did even worse. The narrative just wasn't true, here.

Here's a look at vacancies:
Image

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Sun Aug 12, 2018 11:17 am

I guess if you limit LTV, you can limit the damage, but to expect anything but declining rents, occupancies and NOI during a recession is not well-founded. Due to leverage, you can lose a lot of money and be stuck in an underperforming investment for years (or possibly lose the entire equity investment).

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Sun Aug 12, 2018 11:39 am

I never thought that residential apartments are "recession proof". I did however, know that self storage and mobile home parks are. This is demonstrably true. During the Great Recession, while stocks plummeted 50%, single family homes plummeted 20-30%, these two asset classes still returned 6-8% in their worst year.
There are obviously enough sponsors who were doing this before 2007. I am invested with two as we speak. There are fundamental reasons why self storage and manufacturered homes do well in a recession, that even a layperson can grasp after doing a little research.

That way that these deals are underwritten, they still make money if occupancy is mearly 70%. Do you think a drop from 97% to 92% would worry me in the slightest? :P
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Sun Aug 12, 2018 4:17 pm

sillysaver wrote:
Sun Aug 12, 2018 11:17 am
I guess if you limit LTV, you can limit the damage, but to expect anything but declining rents, occupancies and NOI during a recession is not well-founded. Due to leverage, you can lose a lot of money and be stuck in an underperforming investment for years (or possibly lose the entire equity investment).
"Recession Resistance (2007 - 2009)

According to the NAREIT, Manufactured Homes and Self-Storage were the two strongest performers of all commercial real estate during the 2007 – 2009 downturn.

Manufactured Homes .47%
Self-Storage -3.80%
Apartments -6.72%
Office: -8.16%
Retail: -12.32%
Industrial: -18.31%
Mortgage: -19.54%
S&P 500: -22.03% (https://dqydj.com/sp-500-return-calculator/ )

Numbers don't lie. 8-)
More info here: https://www.biggerpockets.com/blogs/914 ... -invest-in
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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unclescrooge
Posts: 2467
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Re: Get out of syndications?

Post by unclescrooge » Sun Aug 12, 2018 5:22 pm

WanderingDoc wrote:
Sun Aug 12, 2018 11:39 am
I never thought that residential apartments are "recession proof". I did however, know that self storage and mobile home parks are. This is demonstrably true. During the Great Recession, while stocks plummeted 50%, single family homes plummeted 20-30%, these two asset classes still returned 6-8% in their worst year.
There are obviously enough sponsors who were doing this before 2007. I am invested with two as we speak. There are fundamental reasons why self storage and manufacturered homes do well in a recession, that even a layperson can grasp after doing a little research.

That way that these deals are underwritten, they still make money if occupancy is mearly 70%. Do you think a drop from 97% to 92% would worry me in the slightest? :P
My wife's Uncle was a big time mobile home investor in Texas. I think they owned 1,000 units.

In the big recession they lost everything, and had to sell their multi million dollar home for half what they paid.

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Wed Aug 15, 2018 8:30 am

WanderingDoc wrote:
Sun Aug 12, 2018 4:17 pm
sillysaver wrote:
Sun Aug 12, 2018 11:17 am
I guess if you limit LTV, you can limit the damage, but to expect anything but declining rents, occupancies and NOI during a recession is not well-founded. Due to leverage, you can lose a lot of money and be stuck in an underperforming investment for years (or possibly lose the entire equity investment).
"Recession Resistance (2007 - 2009)

According to the NAREIT, Manufactured Homes and Self-Storage were the two strongest performers of all commercial real estate during the 2007 – 2009 downturn.

Manufactured Homes .47%
Self-Storage -3.80%
Apartments -6.72%
Office: -8.16%
Retail: -12.32%
Industrial: -18.31%
Mortgage: -19.54%
S&P 500: -22.03% (https://dqydj.com/sp-500-return-calculator/ )

Numbers don't lie. 8-)
More info here: https://www.biggerpockets.com/blogs/914 ... -invest-in
I know David, the author, he's a local syndicator. I wonder what the leverage levels of those REIT's was compared to the typical value-add syndication at 70/30. As stated in my previous post, the average apartment was down 37%, from peak to trough.

Here's the latest on the self-storage trend. There is some softening as more supply comes online:
https://www.nreionline.com/self-storage ... ts-compete
Developers are opening new self-storage properties in markets across the country, offering low rates to attract customers and pushing down average rents.

“Heavy new supply deliveries and slowing economic fundamentals are adding headwinds to street rates,” according to the “National Self Storage Report” for July 2018 from Yardi Matrix.

The number of new properties opening is expected to peak later this year. However, in the meantime, average occupancy rates for self-storage properties remain high. Even in metro areas that are overbuilt overall, individual submarkets are often very healthy and almost unaffected by competition from properties more than a few miles away. In most cases, if owners of new properties are willing to offer discounted rents, they have been able to complete lease-ups within the usual timeframe.

“Where new developments are having challenges, it’s not the lease-up. The challenge is to achieve pro-forma rents,” says Ryan Clark, director of investment sales for SkyView Advisors, an advisory firm. “Most properties are leasing up at the anticipated physical occupancy trend.”

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Wed Aug 15, 2018 1:30 pm

sillysaver wrote:
Wed Aug 15, 2018 8:30 am
WanderingDoc wrote:
Sun Aug 12, 2018 4:17 pm
sillysaver wrote:
Sun Aug 12, 2018 11:17 am
I guess if you limit LTV, you can limit the damage, but to expect anything but declining rents, occupancies and NOI during a recession is not well-founded. Due to leverage, you can lose a lot of money and be stuck in an underperforming investment for years (or possibly lose the entire equity investment).
"Recession Resistance (2007 - 2009)

According to the NAREIT, Manufactured Homes and Self-Storage were the two strongest performers of all commercial real estate during the 2007 – 2009 downturn.

Manufactured Homes .47%
Self-Storage -3.80%
Apartments -6.72%
Office: -8.16%
Retail: -12.32%
Industrial: -18.31%
Mortgage: -19.54%
S&P 500: -22.03% (https://dqydj.com/sp-500-return-calculator/ )

Numbers don't lie. 8-)
More info here: https://www.biggerpockets.com/blogs/914 ... -invest-in
I know David, the author, he's a local syndicator. I wonder what the leverage levels of those REIT's was compared to the typical value-add syndication at 70/30. As stated in my previous post, the average apartment was down 37%, from peak to trough.

Here's the latest on the self-storage trend. There is some softening as more supply comes online:
https://www.nreionline.com/self-storage ... ts-compete
Developers are opening new self-storage properties in markets across the country, offering low rates to attract customers and pushing down average rents.

“Heavy new supply deliveries and slowing economic fundamentals are adding headwinds to street rates,” according to the “National Self Storage Report” for July 2018 from Yardi Matrix.

The number of new properties opening is expected to peak later this year. However, in the meantime, average occupancy rates for self-storage properties remain high. Even in metro areas that are overbuilt overall, individual submarkets are often very healthy and almost unaffected by competition from properties more than a few miles away. In most cases, if owners of new properties are willing to offer discounted rents, they have been able to complete lease-ups within the usual timeframe.

“Where new developments are having challenges, it’s not the lease-up. The challenge is to achieve pro-forma rents,” says Ryan Clark, director of investment sales for SkyView Advisors, an advisory firm. “Most properties are leasing up at the anticipated physical occupancy trend.”
Interesting. That's good info. I still think that diversifying among asset classes (stocks, real estate, business) and different strategies within a given asset class like real estate is prudent. I like my odds with mobile home parks and self-storage, and almost any syndication vehicle over the projected 2 - 4% real returns of the S & P 500 over the next 10 years.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

sillysaver
Posts: 144
Joined: Thu Oct 08, 2015 5:24 pm

Re: Get out of syndications?

Post by sillysaver » Wed Aug 15, 2018 8:21 pm

WanderingDoc wrote:
Wed Aug 15, 2018 1:30 pm

Interesting. That's good info. I still think that diversifying among asset classes (stocks, real estate, business) and different strategies within a given asset class like real estate is prudent. I like my odds with mobile home parks and self-storage, and almost any syndication vehicle over the projected 2 - 4% real returns of the S & P 500 over the next 10 years.
I hope I'm not coming across as overly negative or argumentative. I'm just trying to think of things that could go wrong.

These syndication deals will probably do OK, and I know some smart people who are heavily invested in these kinds of deals.

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: Get out of syndications?

Post by WanderingDoc » Wed Aug 15, 2018 8:36 pm

sillysaver wrote:
Wed Aug 15, 2018 8:21 pm
WanderingDoc wrote:
Wed Aug 15, 2018 1:30 pm

Interesting. That's good info. I still think that diversifying among asset classes (stocks, real estate, business) and different strategies within a given asset class like real estate is prudent. I like my odds with mobile home parks and self-storage, and almost any syndication vehicle over the projected 2 - 4% real returns of the S & P 500 over the next 10 years.
I hope I'm not coming across as overly negative or argumentative. I'm just trying to think of things that could go wrong.

These syndication deals will probably do OK, and I know some smart people who are heavily invested in these kinds of deals.
For good reason 8-)
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

subdude
Posts: 2
Joined: Thu Oct 11, 2018 3:47 am

Re: Get out of syndications?

Post by subdude » Fri Oct 12, 2018 5:52 pm

WanderingDoc wrote:
Wed Aug 15, 2018 1:30 pm
sillysaver wrote:
Wed Aug 15, 2018 8:30 am
WanderingDoc wrote:
Sun Aug 12, 2018 4:17 pm
sillysaver wrote:
Sun Aug 12, 2018 11:17 am
I guess if you limit LTV, you can limit the damage, but to expect anything but declining rents, occupancies and NOI during a recession is not well-founded. Due to leverage, you can lose a lot of money and be stuck in an underperforming investment for years (or possibly lose the entire equity investment).
"Recession Resistance (2007 - 2009)

According to the NAREIT, Manufactured Homes and Self-Storage were the two strongest performers of all commercial real estate during the 2007 – 2009 downturn.

Manufactured Homes .47%
Self-Storage -3.80%
Apartments -6.72%
Office: -8.16%
Retail: -12.32%
Industrial: -18.31%
Mortgage: -19.54%
S&P 500: -22.03% (https://dqydj.com/sp-500-return-calculator/ )

Numbers don't lie. 8-)
More info here: https://www.biggerpockets.com/blogs/914 ... -invest-in
I know David, the author, he's a local syndicator. I wonder what the leverage levels of those REIT's was compared to the typical value-add syndication at 70/30. As stated in my previous post, the average apartment was down 37%, from peak to trough.

Here's the latest on the self-storage trend. There is some softening as more supply comes online:
https://www.nreionline.com/self-storage ... ts-compete
Developers are opening new self-storage properties in markets across the country, offering low rates to attract customers and pushing down average rents.

“Heavy new supply deliveries and slowing economic fundamentals are adding headwinds to street rates,” according to the “National Self Storage Report” for July 2018 from Yardi Matrix.

The number of new properties opening is expected to peak later this year. However, in the meantime, average occupancy rates for self-storage properties remain high. Even in metro areas that are overbuilt overall, individual submarkets are often very healthy and almost unaffected by competition from properties more than a few miles away. In most cases, if owners of new properties are willing to offer discounted rents, they have been able to complete lease-ups within the usual timeframe.

“Where new developments are having challenges, it’s not the lease-up. The challenge is to achieve pro-forma rents,” says Ryan Clark, director of investment sales for SkyView Advisors, an advisory firm. “Most properties are leasing up at the anticipated physical occupancy trend.”
Interesting. That's good info. I still think that diversifying among asset classes (stocks, real estate, business) and different strategies within a given asset class like real estate is prudent. I like my odds with mobile home parks and self-storage, and almost any syndication vehicle over the projected 2 - 4% real returns of the S & P 500 over the next 10 years.
Hey Doc, where do you find out about manufactured home and self storage syndicates? I've invested significantly in multi-family syndications and other real estate private placements, but I've never come across the storage and mobile home funds. Do you enter them through crowd funding sites, or look directly for syndicators?

I agree with you on the soundness of having good RE funds as a core part of my investment strategy. Passive investing in real estate has always performed well for me (even in downturns), and if you find funds that keep their leverage in check, it never goes to zero...unlike some of my stocks from years past.

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sergeant
Posts: 913
Joined: Tue Dec 04, 2007 11:13 pm

Re: Get out of syndications?

Post by sergeant » Fri Oct 12, 2018 6:18 pm

Most here would agree that you are too concentrated in RE and should follow your plan to increase other assets. Some will say that you are way too concentrated in RE and should get out of your syndications asap. I like your plan of slowly lowering RE as a percentage of assets.
Lincoln 3 EOW!

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