NRIA.NET - Real Estate Private Placement - 16% return

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aqan
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NRIA.NET - Real Estate Private Placement - 16% return

Post by aqan » Tue May 15, 2018 9:52 pm

After hearing their commercial for many years on Bloomberg I decided to call them to find out more. In a nutshell they are real estate developers, and offer 16-20% return on your investment of multiples of 50K. You're pretty much locked in for 5 years and WILL lose all your money if the market tanks.

I know I will have hard time convincing the lady but first wanted to hear what bogleheads think about this crazy idea?

here are some details

For over a decade, NRIA has delivered and continues to build upon a history of exceptional performance as a vertically integrated investment, management, and development firm. We have extensive experience in ground-up construction and complete renovation of planned unit townhome, luxury single-family residential, condominium, multifamily and commercial mixed-use rental development. All of our investment opportunities are strategically located in many of the most dynamic urban markets along the East Coast; to include Brooklyn, Northern NJ / NY Metropolitan area, Center City Philadelphia PA and Palm Beach County FL.

The cost per financial unit in this offering is $50k per unit. Your target returns per investment unit purchased are:
Return Options
· 1 unit = $50k - 16% IRR

· 2 units = $100k - 18% IRR

· 3 units = $150k - 20% IRR

· 20% is the max. return offered


Term and payout
· 5 yr. term - (limited liquidity available after 30 months)

· 6% of your IRR is annualized and paid monthly in years 1, 2, 3 & 4 (the remaining return accrues for payout in year 5)

· Your cash flow starts the month following payment (Check received March, first monthly payout – Mid April)

· In year 5, your investment is “trued up” to your targeted returns of 16-20%, plus the return of your principal upon liquidation of real estate portfolio

· The majority of the return will receive capital gains treatment

· 100% of free cash flow is dedicated to you first as an equity partner before National Realty takes a profit

· Regardless of actual net sales proceeds achieved, investors are guaranteed a minimum of 12% IRR and the full return of principal invested. (See Appendix C).


Additionally, each of the properties has been strategically handpicked for this Portfolio for their unique profit producing contribution e.g.
· 97 unit cash flowing apt building with 13k Sq. Ft of commercial space at street level

· 30 luxury unit condo build & flip with a parking deck and 8k Sq. Ft of commercial space at street level

· 55 luxury unit condo build & flip with 3 car parking per unit, overlooking the Hudson River and Mid-town Manhattan

· 40 unit cash flowing apt building to be completed July 2018

· 14 luxury beachfront townhomes build & flip with roof decks, pool, and 2 car garages

There will be detailed financial overviews of each project as final financing is approved (see the attached financial overviews for the approved target properties)

These properties are purchased for cash, at a 75% discount to development value giving National Realty and our investors a secure financial advantage. Additionally, each project is thoroughly vetted including alternate exit strategies to ensure safety & profitability.

To ensure the success of each project National Realty sets aside funds at the purchase closing needed for Senior Lender Interest Reserve, Fees, and Investor Monthly Payments. We also provide exclusive guarantees that thoroughly manage your risk exposure. They are designed to safeguard investors during construction & resale stages, protecting your projected income & full return of capital.

This is a limited partnership real estate offering and a perfect diversification to stocks. It is also a very desirable investment for retirement accounts.

https://www.dropbox.com/sh/tsn1gyuv2p5d ... AUGea?dl=0

Remember – You must be an Accredited Investor to make this investment. You must qualify by proving a net worth of $1M, Or $200,000 income for the last two years ($300 if joint), Or have your accountant or attorney sign an “Accredited Investor” letter stating that your finances are known to them and you qualify as an accredited investor (a template of that is also in the above link).

ThrustVectoring
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by ThrustVectoring » Tue May 15, 2018 11:36 pm

How do you think they can afford to pay for the commercials you saw?

As a rough rule of thumb, the more folks try to market to me the less I'm interested in investing with them. Just stick with index funds and be happy with the returns the market provides.
Current portfolio: 60% VTI / 40% VXUS

runner3081
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by runner3081 » Tue May 15, 2018 11:42 pm

Is this an infomercial for the company?

Independent George
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Joined: Wed Feb 17, 2016 12:13 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by Independent George » Wed May 16, 2018 12:01 am

So, if I'm reading this right...

1. Investor gives them a minimum of $50k in cash.
2. They use cash from investors to build/flip/rent real estate in expensive areas of the east coast.
3. They return an increasing % back to you based on how much money you sink in.

Seems like a scam to me - how exactly does anyone guarantee a 12% return? Does paying money into the company grant you an ownership stake in the properties they supposedly own and are developing? If not, why would anyone seeking capital for investments pay out a minimum of 16% annualized for what basically amounts to a 5-year unsecured bond? What the heck kind of profit margins are they expecting if they can afford to pay that much out to their investors?

Honestly, this sounds like a ponzi scheme - take in $50k, pay out $8k back to the 'investor' and pocket the rest, get him to convince his friends to 'buy in'. If you reel in enough new players, you can keep it going on for a few years before your investments 'crash', file bankruptcy, then disappear.

GibsonL6s
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by GibsonL6s » Wed May 16, 2018 12:12 am

I do RE for a living. As I have said before control is everything in real estate. I would never invest passively in a real estate deal ie one I did not control. Also I am sure they are not a benevolent society meaning high fees. I would steer clear.

Startled Cat
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by Startled Cat » Wed May 16, 2018 12:18 am

Independent George wrote:
Wed May 16, 2018 12:01 am
So, if I'm reading this right...

1. Investor gives them a minimum of $50k in cash.
2. They use cash from investors to build/flip/rent real estate in expensive areas of the east coast.
3. They return an increasing % back to you based on how much money you sink in.
That's essentially correct.
Independent George wrote:
Wed May 16, 2018 12:01 am
Seems like a scam to me - how exactly does anyone guarantee a 12% return?
The use of the word "guarantee" here is a bit distasteful. What they mean is that limited partners are entitled to 12% IRR before the sponsors get any residual profit. Returns may fall well short of 12%.
Independent George wrote:
Wed May 16, 2018 12:01 am
Does paying money into the company grant you an ownership stake in the properties they supposedly own and are developing?
This sounds like preferred equity, so yes. Your upside is capped at 16% or whatever number you agree on. Management takes the rest if there are funds left over.
Independent George wrote:
Wed May 16, 2018 12:01 am
If not, why would anyone seeking capital for investments pay out a minimum of 16% annualized for what basically amounts to a 5-year unsecured bond?
As you might imagine, it's a very risky investment (see below). Offering a preferred return of 10%-12%, plus some share of the upside, is typical for this kind of deal.
Independent George wrote:
Wed May 16, 2018 12:01 am
What the heck kind of profit margins are they expecting if they can afford to pay that much out to their investors?
These deals are generally heavily leveraged. The leverage magnifies profits and losses. The debt carries a lower interest rate than the preferred equity because it has a first lien on the property. If the project does well, management and the equity investors will divide the spoils. If not, the equity investors may lose their entire investment.
Independent George wrote:
Wed May 16, 2018 12:01 am
Honestly, this sounds like a ponzi scheme - take in $50k, pay out $8k back to the 'investor' and pocket the rest, get him to convince his friends to 'buy in'. If you reel in enough new players, you can keep it going on for a few years before your investments 'crash', file bankruptcy, then disappear.
Probably not a ponzi scheme, but definitely a very risky leveraged play. I don't like the fact that this partnership is marketed to the public, or the way the marketing copy emphasizes best-case returns and waves around a supposed guarantee.

WanderingDoc
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by WanderingDoc » Wed May 16, 2018 12:25 am

I do both active and passive real estate investing.

Agree with the last guy, control is everything. However, in the current overall market, investing in passive large apartment syndications has done very well for me.

In my passive investments, I like an 16-18% IRR and call it a day. For active investments, my worst is a 30% IRR on a leveraged deal. A couple of deals I pulled out all my initial capital, so the return is now "infinity" or undefined, whichever you prefer. That said, active real estate requires significantly more time and work.

Once the market corrects, I'll jump back onto some active deals to add to the portfolio. However, large apartment syndications imvested totally passively I am a huge fan of lately.

And by the way, it seems like they are offering/guaranteeing a 12% preferred return. I can almost guarantee to YOU that this is a lie. If you read the PPM, it will be protecting the sponsor in 98% of the language. You aren't getting a 12% preferred return. If they say you are, these are not professional or experienced operators. A preferred return of 6 or 8% is actually very good.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by Valuethinker » Wed May 16, 2018 4:48 am

aqan wrote:
Tue May 15, 2018 9:52 pm
After hearing their commercial for many years on Bloomberg I decided to call them to find out more. In a nutshell they are real estate developers, and offer 16-20% return on your investment of multiples of 50K. You're pretty much locked in for 5 years and WILL lose all your money if the market tanks.

I know I will have hard time convincing the lady but first wanted to hear what bogleheads think about this crazy idea?
If you make money on this, it will be by pure luck.

You are going to be paying big fees, to someone else, for them to do with your money what they see fit, with no guarantees to you.

If in poker, you can't figure out who the mug is, then you're the ...

Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by Valuethinker » Wed May 16, 2018 4:50 am

aqan wrote:
Tue May 15, 2018 9:52 pm


This is a limited partnership real estate offering and a perfect diversification to stocks. It is also a very desirable investment for retirement accounts.

https://www.dropbox.com/sh/tsn1gyuv2p5d ... AUGea?dl=0

Remember – You must be an Accredited Investor to make this investment. You must qualify by proving a net worth of $1M, Or $200,000 income for the last two years ($300 if joint), Or have your accountant or attorney sign an “Accredited Investor” letter stating that your finances are known to them and you qualify as an accredited investor (a template of that is also in the above link).
Amazed they can get away with that much sales language in promotion of an investment product.

Of course this is not being marketed in 2010 when the RE market was more or less at the bottom, but in 2018 when it has recovered most of what it lost in the Crash (depending upon location and type of property).

grok87
Posts: 8444
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by grok87 » Wed May 16, 2018 7:26 am

GibsonL6s wrote:
Wed May 16, 2018 12:12 am
I do RE for a living. As I have said before control is everything in real estate. I would never invest passively in a real estate deal ie one I did not control. Also I am sure they are not a benevolent society meaning high fees. I would steer clear.
I think the “high fees” comment is the key. Here is one of the quotes from the OP

“100% of free cash flow is dedicated to you first as an equity partner before National Realty takes a profit”

Note the word “free”.! The thing to realize is That this is like Hollywood movie accounting. National realty is probably going to be making a ton of money on fees and will thus be suppressing the “profit”. So you are not aligned with them.

Just like a smart Hollywood actor tell them you want a percentage of the gross not a percentage of the net!
Keep calm and Boglehead on. KCBO.

aqan
Posts: 425
Joined: Fri Nov 06, 2015 7:07 am

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by aqan » Wed May 16, 2018 6:07 pm

Independent George wrote:
Wed May 16, 2018 12:01 am
So, if I'm reading this right...

1. Investor gives them a minimum of $50k in cash.
2. They use cash from investors to build/flip/rent real estate in expensive areas of the east coast.
3. They return an increasing % back to you based on how much money you sink in.

Seems like a scam to me - how exactly does anyone guarantee a 12% return? Does paying money into the company grant you an ownership stake in the properties they supposedly own and are developing? If not, why would anyone seeking capital for investments pay out a minimum of 16% annualized for what basically amounts to a 5-year unsecured bond? What the heck kind of profit margins are they expecting if they can afford to pay that much out to their investors?

Honestly, this sounds like a ponzi scheme - take in $50k, pay out $8k back to the 'investor' and pocket the rest, get him to convince his friends to 'buy in'. If you reel in enough new players, you can keep it going on for a few years before your investments 'crash', file bankruptcy, then disappear.
yes that's mostly correct.. except they don't just use cash from investors, the use the investor cash as equity (or down payment) and go to the bank to get a mortgage/loan.
I wouldn't call it a scam, you and the bank hold the deed but it's highly leveraged so if the real estate market folds, the bank will claim the property and you lose everything.

aqan
Posts: 425
Joined: Fri Nov 06, 2015 7:07 am

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by aqan » Wed May 16, 2018 8:29 pm

grok87 wrote:
Wed May 16, 2018 7:26 am
GibsonL6s wrote:
Wed May 16, 2018 12:12 am
I do RE for a living. As I have said before control is everything in real estate. I would never invest passively in a real estate deal ie one I did not control. Also I am sure they are not a benevolent society meaning high fees. I would steer clear.
I think the “high fees” comment is the key. Here is one of the quotes from the OP

“100% of free cash flow is dedicated to you first as an equity partner before National Realty takes a profit”

Note the word “free”.! The thing to realize is That this is like Hollywood movie accounting. National realty is probably going to be making a ton of money on fees and will thus be suppressing the “profit”. So you are not aligned with them.

Just like a smart Hollywood actor tell them you want a percentage of the gross not a percentage of the net!
thanks I will ask my guy what on earth "free" cash flow is.

joer1212
Posts: 429
Joined: Sun Feb 17, 2013 1:55 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by joer1212 » Thu Aug 16, 2018 10:25 am

High returns=high risk. There is no free lunch. I can't emphasize this enough.
Last edited by joer1212 on Fri Aug 17, 2018 1:25 pm, edited 1 time in total.

garlandwhizzer
Posts: 2019
Joined: Fri Aug 06, 2010 3:42 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by garlandwhizzer » Thu Aug 16, 2018 12:58 pm

16% -18% per year over 5 years sounds very good indeed. I'm wondering why NIRA is offering this incredible deal and doesn't just borrow money at 4% - 6% and take all this great action themselves. That would provide a 12% to 14% return per year without risking a cent of their own money. Perhaps NIRA is just massively altruistic and would rather see their customers get rich than enrich themselves. It is indeed comforting to know that in the financial industry there are still some selfless Christ-like financial professionals who are simply trying to offer incredible deals to others whom they don't even know rather than reaping all the profits for themselves. How refreshing to see such altruism from an industry that cynics believe to be full of charlatans!

On a serious note, I suggest you run, not walk, away from this deal. There is no way the numbers make sense without massive risk and, likely, massive profits for those who created, structured, marketed, and sold it. I am speaking as a person who lost every cent in a real estate deal that also offered incredibly attractive returns and dividends that in the end turned out to be completely worthless, a lesson I have never forgotten.

Garland Whizzer

WanderingDoc
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by WanderingDoc » Thu Aug 16, 2018 1:55 pm

garlandwhizzer wrote:
Thu Aug 16, 2018 12:58 pm
16% -18% per year over 5 years sounds very good indeed. I'm wondering why NIRA is offering this incredible deal and doesn't just borrow money at 4% - 6% and take all this great action themselves. That would provide a 12% to 14% return per year without risking a cent of their own money. Perhaps NIRA is just massively altruistic and would rather see their customers get rich than enrich themselves. It is indeed comforting to know that in the financial industry there are still some selfless Christ-like financial professionals who are simply trying to offer incredible deals to others whom they don't even know rather than reaping all the profits for themselves. How refreshing to see such altruism from an industry that cynics believe to be full of charlatans!

On a serious note, I suggest you run, not walk, away from this deal. There is no way the numbers make sense without massive risk and, likely, massive profits for those who created, structured, marketed, and sold it. I am speaking as a person who lost every cent in a real estate deal that also offered incredibly attractive returns and dividends that in the end turned out to be completely worthless, a lesson I have never forgotten.

Garland Whizzer
For a syndicated large multifamily deal, a 16-18% IRR is very conservative, and on the low side for returns in these deals. It is not outrageous by any means. If a property is valued at $25M, a bank will give you a loan for about $15M. At maybe a 5-6% interest rate, 2-3 years IO, 7 year term, 25 year amo. You still have to raise $10M from investors. Even large operators don't usually have $10M of capital laying around, and even if they did, it makes no sense to use it all on one deal.

A bank won't lend 100% of the purchase price, $25M, at a 4-6% interest rate. The sponsor is actually being smart and prudent by only utilizing a 60-70% LTV. So your entire sarcastic post makes no sense. Maybe take time to learn what is actually going on, instead of the knee-jerk "anything that isn't a 3-fund index portfolio is a scam" mentality.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

HornedToad
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by HornedToad » Thu Aug 16, 2018 2:08 pm

It's not clear why I should invest in that vs real-estate crowdfunding companies that look more reasonable. Realtyshares, Fund that flip, etc

Or just a general REIT.

sillysaver
Posts: 147
Joined: Thu Oct 08, 2015 5:24 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by sillysaver » Thu Aug 16, 2018 2:53 pm

WanderingDoc wrote:
Thu Aug 16, 2018 1:55 pm
garlandwhizzer wrote:
Thu Aug 16, 2018 12:58 pm
16% -18% per year over 5 years sounds very good indeed. I'm wondering why NIRA is offering this incredible deal and doesn't just borrow money at 4% - 6% and take all this great action themselves. That would provide a 12% to 14% return per year without risking a cent of their own money. Perhaps NIRA is just massively altruistic and would rather see their customers get rich than enrich themselves. It is indeed comforting to know that in the financial industry there are still some selfless Christ-like financial professionals who are simply trying to offer incredible deals to others whom they don't even know rather than reaping all the profits for themselves. How refreshing to see such altruism from an industry that cynics believe to be full of charlatans!

On a serious note, I suggest you run, not walk, away from this deal. There is no way the numbers make sense without massive risk and, likely, massive profits for those who created, structured, marketed, and sold it. I am speaking as a person who lost every cent in a real estate deal that also offered incredibly attractive returns and dividends that in the end turned out to be completely worthless, a lesson I have never forgotten.

Garland Whizzer
For a syndicated large multifamily deal, a 16-18% IRR is very conservative, and on the low side for returns in these deals. It is not outrageous by any means. If a property is valued at $25M, a bank will give you a loan for about $15M. At maybe a 5-6% interest rate, 2-3 years IO, 7 year term, 25 year amo. You still have to raise $10M from investors. Even large operators don't usually have $10M of capital laying around, and even if they did, it makes no sense to use it all on one deal.

A bank won't lend 100% of the purchase price, $25M, at a 4-6% interest rate. The sponsor is actually being smart and prudent by only utilizing a 60-70% LTV. So your entire sarcastic post makes no sense. Maybe take time to learn what is actually going on, instead of the knee-jerk "anything that isn't a 3-fund index portfolio is a scam" mentality.
Indeed, such returns are reasonable in the world of syndications.

The real reason they seek equity investment from others is not:

- It's a scam
- Those returns aren't possible
- They don't have enough capital lying around

The reason is that they can make 20-40% in fees -- acquisition fees, disposition fees, management fees, equity split, etc -- on top of the capital that they themselves invest. It's more lucrative to syndicate the deal than for the sponsor to just invest his own money.

WanderingDoc
Posts: 1148
Joined: Sat Aug 05, 2017 8:21 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by WanderingDoc » Thu Aug 16, 2018 3:31 pm

sillysaver wrote:
Thu Aug 16, 2018 2:53 pm
WanderingDoc wrote:
Thu Aug 16, 2018 1:55 pm
garlandwhizzer wrote:
Thu Aug 16, 2018 12:58 pm
16% -18% per year over 5 years sounds very good indeed. I'm wondering why NIRA is offering this incredible deal and doesn't just borrow money at 4% - 6% and take all this great action themselves. That would provide a 12% to 14% return per year without risking a cent of their own money. Perhaps NIRA is just massively altruistic and would rather see their customers get rich than enrich themselves. It is indeed comforting to know that in the financial industry there are still some selfless Christ-like financial professionals who are simply trying to offer incredible deals to others whom they don't even know rather than reaping all the profits for themselves. How refreshing to see such altruism from an industry that cynics believe to be full of charlatans!

On a serious note, I suggest you run, not walk, away from this deal. There is no way the numbers make sense without massive risk and, likely, massive profits for those who created, structured, marketed, and sold it. I am speaking as a person who lost every cent in a real estate deal that also offered incredibly attractive returns and dividends that in the end turned out to be completely worthless, a lesson I have never forgotten.

Garland Whizzer
For a syndicated large multifamily deal, a 16-18% IRR is very conservative, and on the low side for returns in these deals. It is not outrageous by any means. If a property is valued at $25M, a bank will give you a loan for about $15M. At maybe a 5-6% interest rate, 2-3 years IO, 7 year term, 25 year amo. You still have to raise $10M from investors. Even large operators don't usually have $10M of capital laying around, and even if they did, it makes no sense to use it all on one deal.

A bank won't lend 100% of the purchase price, $25M, at a 4-6% interest rate. The sponsor is actually being smart and prudent by only utilizing a 60-70% LTV. So your entire sarcastic post makes no sense. Maybe take time to learn what is actually going on, instead of the knee-jerk "anything that isn't a 3-fund index portfolio is a scam" mentality.
Indeed, such returns are reasonable in the world of syndications.

The real reason they seek equity investment from others is not:

- It's a scam
- Those returns aren't possible
- They don't have enough capital lying around

The reason is that they can make 20-40% in fees -- acquisition fees, disposition fees, management fees, equity split, etc -- on top of the capital that they themselves invest. It's more lucrative to syndicate the deal than for the sponsor to just invest his own money.
If I can sit in my pajamas playing video games and make a 15-25% IRR, with flow through depreciation benefit, I would sign up for that all day long (and I do). Whether their acquisition fee is 1% or 5%, whether their equity take is 10% or 90% - I don't care.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

AerialWombat
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by AerialWombat » Thu Aug 16, 2018 3:44 pm

GibsonL6s wrote:
Wed May 16, 2018 12:12 am
I do RE for a living. As I have said before control is everything in real estate. I would never invest passively in a real estate deal ie one I did not control. Also I am sure they are not a benevolent society meaning high fees. I would steer clear.
+1

I’m a control freak. I currently only invest in single family homes that I purchase directly.

I have every intention to start doing partnership deals on multi-family projects in 2019, but it will only be with somebody I trust extensively and have known for 13 years.

I will not do syndicated deals with strangers, and definitely avoiding the real estate crowdfunding sites.

With an asset class as risky as real estate, I want to do everything I can to remain conservative. I’m happy to accept the returns this gives me (which, on my own deals, exceeds what the OP is indicating here).
Last edited by AerialWombat on Thu Aug 16, 2018 4:27 pm, edited 1 time in total.

sillysaver
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Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by sillysaver » Thu Aug 16, 2018 3:47 pm

WanderingDoc wrote:
Thu Aug 16, 2018 3:31 pm

If I can sit in my pajamas playing video games and make a 15-25% IRR, with flow through depreciation benefit, I would sign up for that all day long (and I do). Whether their acquisition fee is 1% or 5%, whether their equity take is 10% or 90% - I don't care.
8-) :sharebeer :sharebeer

garlandwhizzer
Posts: 2019
Joined: Fri Aug 06, 2010 3:42 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by garlandwhizzer » Thu Aug 16, 2018 4:28 pm

WanderingDoc wrote:
A bank won't lend 100% of the purchase price, $25M, at a 4-6% interest rate. The sponsor is actually being smart and prudent by only utilizing a 60-70% LTV. So your entire sarcastic post makes no sense.
60% LTV? The original post by aqan states that these properties are being purchased for cash at a 75% discount to development value! You're only paying a quarter for a dollars worth of real estate, so to fully fund the purchase the banks would have to fund only 25% of the value which is a lot better than 60% LTV.
aqan wrote:
These properties are purchased for cash, at a 75% discount to development value giving National Realty and our investors a secure financial advantage. Additionally, each project is thoroughly vetted including alternate exit strategies to ensure safety & profitability.
If the real estate development is worth 4 times what your paying for it as claimed by NRIA (75% discount) the banks should have no trouble with issuing loans to cover that amount. Unless banks don't know how to value real estate but NRIA does. Of the two my bet is on the bank's appraisal. Anytime anyone tells you that they can reliably offer you a 16% - 18% return on anything for 5 years without considerable risk, he is lying. Period. If others want to swallow this bait, I hope it works out for them. Count me out.

Garland Whizzer

sillysaver
Posts: 147
Joined: Thu Oct 08, 2015 5:24 pm

Re: NRIA.NET - Real Estate Private Placement - 16% return

Post by sillysaver » Thu Aug 16, 2018 5:03 pm

So they are property developers. There is extra risk when it comes to new developments, since the project might go over budget, might not finish in time, the market could weaken by the time the project is finished, there could be undiscovered issues, etc.

The numbers being talked about seem completely reasonable given the risk involved.

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