HAVE YOU INVESTED WITH BAM CAPITAL?
Anybody here ever invest with BAM capital as a passive investor?
Quote from @David Samuelson:While I haven't personally done anything with this particular fund, I do have capital deployed with BAM. I had a brief F2F with Ivan a couple weeks ago when I ran into him at a conference in FLorida. There are a LOT of operators that are scrambling at the moment, and dont come close to our buy-box, however I do invest with 3 larger operators (BAM is one of them), and overall I still believe their underwriting is sound and viable.
Hi. What’s the latest on BAM right now? Anyone recently added to Fund IV? Anyone extra cautious with these types of investments right now? Just spoke with a business dev rep from BAM today, good conversation, said theyre not worried about rates right now and have plans in place to account for them.
Im not at liberty to discuss details, however I see some good things on the horizon with this group. Stay tuned and work with their folks for details, should be some exiting things in the future.
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#1 All Forums Contributor
- Real Estate Broker
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Quote from @Matt A.:
Quote from @David Samuelson:While I haven't personally done anything with this particular fund, I do have capital deployed with BAM. I had a brief F2F with Ivan a couple weeks ago when I ran into him at a conference in FLorida. There are a LOT of operators that are scrambling at the moment, and dont come close to our buy-box, however I do invest with 3 larger operators (BAM is one of them), and overall I still believe their underwriting is sound and viable.
Hi. What’s the latest on BAM right now? Anyone recently added to Fund IV? Anyone extra cautious with these types of investments right now? Just spoke with a business dev rep from BAM today, good conversation, said theyre not worried about rates right now and have plans in place to account for them.
Im not at liberty to discuss details, however I see some good things on the horizon with this group. Stay tuned and work with their folks for details, should be some exiting things in the future.
my wife and I have small positions with Bam and have also met in person with Ivan at his office in Indy.. We feel confident in Mr. Barrett and teams leadership.
They haven't had an asset disposition since January 2023.
Fund IV has a target hold period of 3-5 years, all hopes are pinned to this timeline. Ask yourself if you really see much appreciation in the next 3-5 years in Class A multifamily? The problem with buying something in near perfect condition is you need the market to really perform to see appreciation. That's not how the market is looking now. Rents have peaked and cap rates are on the rise. When cap rates increase you have to have an impact on NOI great enough to overcome the cap rate adjustment plus a profit.
The scariest part is taking on debt at 75% LTV and less than 10% of BAM's money is in the deal. I haven't looked at their fees.
This is a great market for buying distressed/foreclosed multifamily at auction. Not so great for what BAM is proposing, IMHO.
@Melanie P.
I need to unpack & clear some things up from your last post for Bigger Pockets viewers.
Im sorry, while your concerns are generalized, you are obviously not an Investor with BAM Capital or know their Company culture to post your concerns here regarding BAM Capital.
I am in FUND III & FUND IV with well over 1 million invested over both funds. (A
series shares). I have never missed a monthly payment. BAM is an outstanding operator with a great Company culture.
To your point regarding Class A assets:
1.) Inflation itself in the midwest territories will rise over time at a conservative 3% regardless. Our dollar is losing value so you need to be with a solid operator in institutional assets that cashflow in markets while hedging inflation with tax benefits. BAM has a 14 year track record to boot.
2.) The midwest markets don't boom or bust either. (i.e Texas).
3.) Fund IV is raising 150 million in equity. So your point of "just 10%" ownership of BAM is a rediculous comment. Example: If BAM invests 10% of their own capital into Fund IV (of just the equity raise), that is 15 million itself in just one of their funds.
4.) BAM is a conservative operator and understanding of our current economic environment. Example: Sitting on over 14 million in cash in just FUND III alone.
5.) BAM Capital is excellent in identifying opportunities with a high "yield on cost" which reflect their experience to operate Class-A properties at much lower costs. So you cannot just look at industry Cap rates alone unless you understand an operators abilities for higher yield on costs.
BAM Capital is becoming an institutional investment company in multi-family Real Estate with Brokers. They have been ranked, yet again In INC Magazine on its annual Inc. 5000 list. This is the fifth consecutive year that the real estate firm has landed on the prestigious list, this time ranking 3,571 with a three-year revenue growth of 144.5 percent.
If anyone would like to discuss BAM Capital further, please contact me through BP and I would be happy to discuss with you my experience, knowledge and opinions.
-Marty Summers
Quote from @Marty Summers:
@Melanie P.
I need to unpack & clear some things up from your last post for Bigger Pockets viewers.
Im sorry, while your concerns are generalized, you are obviously not an Investor with BAM Capital or know their Company culture to post your concerns here regarding BAM Capital.
I am in FUND III & FUND IV with well over 1 million invested over both funds. (A
series shares). I have never missed a monthly payment. BAM is an outstanding operator with a great Company culture.
To your point regarding Class A assets:
1.) Inflation itself in the midwest territories will rise over time at a conservative 3% regardless. Our dollar is losing value so you need to be with a solid operator in institutional assets that cashflow in markets while hedging inflation with tax benefits. BAM has a 14 year track record to boot.
2.) The midwest markets don't boom or bust either. (i.e Texas).
3.) Fund IV is raising 150 million in equity. So your point of "just 10%" ownership of BAM is a rediculous comment. Example: If BAM invests 10% of their own capital into Fund IV (of just the equity raise), that is 15 million itself in just one of their funds.
4.) BAM is a conservative operator and understanding of our current economic environment. Example: Sitting on over 14 million in cash in just FUND III alone.
5.) BAM Capital is excellent in identifying opportunities with a high "yield on cost" which reflect their experience to operate Class-A properties at much lower costs. So you cannot just look at industry Cap rates alone unless you understand an operators abilities for higher yield on costs.
BAM Capital is becoming an institutional investment company in multi-family Real Estate with Brokers. They have been ranked, yet again In INC Magazine on its annual Inc. 5000 list. This is the fifth consecutive year that the real estate firm has landed on the prestigious list, this time ranking 3,571 with a three-year revenue growth of 144.5 percent.
If anyone would like to discuss BAM Capital further, please contact me through BP and I would be happy to discuss with you my experience, knowledge and opinions.
-Marty Summers
Marty, Nothing that I posted is incorrect, but thanks for stopping by to repeat some of the marketing material that induced you to send seven figures to BAM Capital. I recall that you're in another deal where you invested $300k, got back $12k total over two years and there are zero funds on the horizon. Stated baldly - your track record at picking syndication investments is, thus far, a losing one.
I am certainly not an investor with BAM Capital. Nor would I ever be. I'm happy for you that you are pleased so far with your investments in BAM Capital. I'm sure you were also happy with your investment in REM Capital in the beginning. Did you find any takers to buy you out of your three deals there or is that capital still in a black hole?
It is objectively not a good time to acquire Class A multifamily assets. The fact that BAM is launching a large fund to do just that makes a reasonable, experienced investor question their judgment. Average annual rent growth dropped from 4.5% in April 2022 to 2.4% in December 2023. Cap rates have gone from 3.37% to 5.18% over the same time period. They are still at a discount to the 10 year treasury bond (i.e. market trends indicate they will continue to escalate). Fund IV has a targeted raise of $150M. They want to put 75% leverage including interest only 3-4 year term loans on their acquisitions. $600M total potential acquisitions. For every ONE PERCENT that cap rates move against BAM they have to improve NOI by $6,000,000 just to BREAK EVEN on the property value. Other forces including skyrocketing insurance premiums, inflationary pressure on expenses and tough competition in the Class A space work against efforts to improve NOI. #riskybusiness
IMHO no amount of "company culture" can make up for these risks. "Never" having missed a payment is good, but as you know this can change at any time and 20 or so payments is not a lot to make - especially when they must make them at any cost because they are in the middle of a huge raise. BAM's 14 years of experience began in 2010 - their "experience" is wholly contained within one of the craziest boom real estate markets in American history. They've never navigated a period like we are in now and they haven't pivoted from their boom times playbook.
If you manage to get your principal back you'll have to pay back the taxes you've deferred (depreciation recapture). Texas is not in the Midwest. I have not reviewed BAM's fees but it's likely based on their representation of UNDER 10% "skin in the game" that most of their "investment" is taken from fees deducted from the money gamblers place with them and counted as equity in the deal; this is a common practice in the syndication industry.
The INC 5000 is a way for Inc Magazine to collect $300 5,000 times. Inc looks only at gross revenue - for 2020 and 2023. The company can have a down year 2022-23 and still be on the 2024 list as long as it has higher revenues in 2023 than it did in 2020. Companies do not have to be profitable. Companies self-certify on a one page form to INC.
I wouldn't describe any of this as "conservative." You say you sent them $2M and you've received back, what, $160K give or take? Under their Class A it's my understanding that if everything goes exactly right when they dispose of the asset you get your principal back and a tax bill. I just don't understand how those numbers work for you, Marty. I have great respect for you and all that you accomplished and shared about your real estate journey. I just can't imagine why you would liquidate your successful, growing real estate holdings to send your money off to something that is super risky and doesn't pay that well over the long term. Certainly we can agree that you did much better than 11% per annum when you were actually buying properties. Is the promise of not having to do anything but cash the checks just too tempting to see through?
I hope this does not come off as a personal attack. It's important that anyone reading your claims about BAM understand the risks involved in these investments and that it's possible if they send money in they will never get it back out. I hope all works out the best for you, but I cannot and will not allow unproved endorsements of these deals remain unchallenged.
Best wishes, Mel.
@Melanie P. Mel, I appreciate your post and acting smart into something you are not invested into.
As for one of my other operators, I am invested into REM in 3 different deals. They are Class C properties and we've all been hit (temporarily) with interest rates. They are not alone.
You asked a question as to why? Well I am a limited partner and retired on caah flow. I don't run around home depot anymore being active.
Also, like I said in my post, please connect with me and I will respectfully explain over the phone. You might learn something new. In fact, my mobile is 812-454-7088. I look forward to our conversation.
-Marty