Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
Diggity said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
who could have seen this coming?
Sims said:
20% isn't the disqualifier in and of itself. It's that in conjunction with sourcing the general public.
If they can't get the funds from professionals/semi-professionals then they've likely already been turned down. I wouldn't want to be the patsy.
Heineken-Ashi said:Sims said:
20% isn't the disqualifier in and of itself. It's that in conjunction with sourcing the general public.
If they can't get the funds from professionals/semi-professionals then they've likely already been turned down. I wouldn't want to be the patsy.
Yes. Even Grant Cardone only targets 12%-15% IRR when he cold calls grandma to invest.
Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
Proposition Joe said:Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
The way I look at most of these deals is ask yourself if there's any reason they are coming to you specifically.
If there isn't, then you're simply the guy getting in after every sharp investor that wanted a bite, took it. Long-term that's not a winning proposition.
Heineken-Ashi said:Proposition Joe said:Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
The way I look at most of these deals is ask yourself if there's any reason they are coming to you specifically.
If there isn't, then you're simply the guy getting in after every sharp investor that wanted a bite, took it. Long-term that's not a winning proposition.
It depends. Learning to underwrite a deal yourself is the best strategy.
Proposition Joe said:Heineken-Ashi said:Proposition Joe said:Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
The way I look at most of these deals is ask yourself if there's any reason they are coming to you specifically.
If there isn't, then you're simply the guy getting in after every sharp investor that wanted a bite, took it. Long-term that's not a winning proposition.
It depends. Learning to underwrite a deal yourself is the best strategy.
You should always do your due diligence on any investment and never take the returns advertised at face value.
But the bigger point is that unless there's some reason the deal actually landed on your doorstep (personal connection, you put the deal together, you uncovered the opportunity, etc...) then it likely means a number of people/institutions passed on it before it got to you.
Doesn't mean there's not still some meat on the bone, but for many people they're just gambling on something that sounds exclusive or "an opportunity", but is really just someone looking to offload risk.
Heineken-Ashi said:Proposition Joe said:Heineken-Ashi said:Proposition Joe said:Sims said:Quote:
He invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann's family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
If annual returns are targeting 20% (and have any realistic chance of getting there) and they are asking the general public for money, run away.
The way I look at most of these deals is ask yourself if there's any reason they are coming to you specifically.
If there isn't, then you're simply the guy getting in after every sharp investor that wanted a bite, took it. Long-term that's not a winning proposition.
It depends. Learning to underwrite a deal yourself is the best strategy.
You should always do your due diligence on any investment and never take the returns advertised at face value.
But the bigger point is that unless there's some reason the deal actually landed on your doorstep (personal connection, you put the deal together, you uncovered the opportunity, etc...) then it likely means a number of people/institutions passed on it before it got to you.
Doesn't mean there's not still some meat on the bone, but for many people they're just gambling on something that sounds exclusive or "an opportunity", but is really just someone looking to offload risk.
Almost every deal my company bought was passed on by dozens of other groups. That means that when our syndication offering goes out to potential investors, it landed on their desk because a number of other people/institutions passed on it before it got to them.
The deal either makes sense or it doesn't. Has nothing to do with how you found it.
Proposition Joe said:
You guys keep talking "your company", which right off the bat means the accessibility of the deal was likely less than what your common investor is seeing.
The common investor getting access to a "private equity deal" is getting either someone else's risk they didn't want, or something that has already had most of the meat already gnawed off of it. The vast majority out there available to investors is simply people lining up to become bag holders.
Can you still profit on it? Sure. You can still win taking +3 when the line has already been bet down from +7. But for the common investor, the investment is much better elsewhere.
Heineken-Ashi said:Proposition Joe said:
You guys keep talking "your company", which right off the bat means the accessibility of the deal was likely less than what your common investor is seeing.
The common investor getting access to a "private equity deal" is getting either someone else's risk they didn't want, or something that has already had most of the meat already gnawed off of it. The vast majority out there available to investors is simply people lining up to become bag holders.
Can you still profit on it? Sure. You can still win taking +3 when the line has already been bet down from +7. But for the common investor, the investment is much better elsewhere.
What is your exposure / experience to the private CRE industry?
Proposition Joe said:Heineken-Ashi said:Proposition Joe said:
You guys keep talking "your company", which right off the bat means the accessibility of the deal was likely less than what your common investor is seeing.
The common investor getting access to a "private equity deal" is getting either someone else's risk they didn't want, or something that has already had most of the meat already gnawed off of it. The vast majority out there available to investors is simply people lining up to become bag holders.
Can you still profit on it? Sure. You can still win taking +3 when the line has already been bet down from +7. But for the common investor, the investment is much better elsewhere.
What is your exposure / experience to the private CRE industry?
Enough to know that the last 15 years has been about as favorable as it gets, leading a lot of people to think they are experts (wink).
Again, I'm directing my comments to Joe Investor (what the OP's linked article was about). They hear "private equity" and think they are getting offered some deal that the masses aren't privy to, when for the most part they are simply taking on someone else's risk and 9 times outta 10 would be better off in an index fund.
LMCane said:Heineken-Ashi said:Sims said:
20% isn't the disqualifier in and of itself. It's that in conjunction with sourcing the general public.
If they can't get the funds from professionals/semi-professionals then they've likely already been turned down. I wouldn't want to be the patsy.
Yes. Even Grant Cardone only targets 12%-15% IRR when he cold calls grandma to invest.
I have never understood the business model of Grant Cardone
if ever there is a modern day Snake Oil Salesman- that seems to be the guy.