What do you think of syndicate sponsor Goodegg Investments?
I am starting to get into syndicate investing and have been reading Brian Burke's "The Hands-off Investor" which is a pretty in-depth guide to analyzing real estate syndications. He says it all starts with the sponsors so I'm looking to get feedback from the BP community on sponsors that I'm researching. First up is Goodegg Invesmtents. They look to have some success with taking deals full-cycle and currently have a sun belt multi-property offering that I'm researching. Has anybody invested with them who can provide some valuable feedback?
Quote from @Gregory Reid:
Quote from @Jessie Dillon:
just my 2 cents.. i'm not a fan of the syndication model. there are better ways to invest more passively where you have more of a say in what goes on, can achieve higher returns, and can have your personal interests at a higher priority.
Can you share more on this?
@Gregory Reid see my reply to steven ^^
Quote from @Richard Ibeh:
Quote from @Jessie Dillon:
just my 2 cents.. i'm not a fan of the syndication model. there are better ways to invest more passively where you have more of a say in what goes on, can achieve higher returns, and can have your personal interests at a higher priority.
Hey Jessie --what other passive RE models are you referring to?
@Richard Ibeh see my response to steven ^^
Quote from @John Sayers:
Quote from @Jessie Dillon:
just my 2 cents.. i'm not a fan of the syndication model. there are better ways to invest more passively where you have more of a say in what goes on, can achieve higher returns, and can have your personal interests at a higher priority.
Can you elaborate on the better ways? Thanks!
@John Sayers see my response to steven ^^
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@Jessie Dillon, within your partnership, would you break down your fees and waterfall in your JV deals?
A 50/50 split, while not uncommon in the world of flipping, is very sponsor friendly, relative to the typical syndication which will typically start at 80/20 or 70/30 splits, with a vast majority of proceeds going to the LPs, along with a preferred return that gives them 100% of the cash flow up to a certain annualized return metric.
Fees can certainly impact how the "true split" really looks at the end of the day.
@Evan Polaski I don't include any fees, not even an acquisition fee or ongoing asset management fee.
Sorry , a bit confused Ms dillon, trying to learn more about syndication, are you bringing 50% of the capital for the down payment to buy the property and your partner the other 50% and they are getting the loan for the debt portion, hence getting 50/50? or if not 50% capital required why wouldn't the other partner just find a realtor and CPA to find/underwrite the deal and 3-5% for property management then own/keep 100%?
Quote from @Adrienne Binder:
Quote from @Hyun Kwak:
Jason or Steven, would either of you be willing to post an update on your experiences with BAM and Goodegg - I am looking at both and wondering if things are still going well with your investments?
We invested with both companies in 2021. BAM is consistently paying out monthly with Class A shares but class B shares stopped paying out almost immediately with the interest rate hikes. However, all properties in the funds are stable and we still feel pretty confident that things will pan out well.
Our biggest gamble in all of our investing was with Goodegg. We placed our biggest bet on a single property, class B shares. Like our other class B shares (we also invested in Praxis), they stopped paying out pretty quick when the interest rates when up. They have been incredibly transparent but they are currently deciding on a capital call or selling the property at a major loss (70-80%). I’m praying they opt for the capital call and someone has more to invest (we don’t). The loan has come to term and they can’t maintain the property and the current interest rates. BAM and Praxis have definitely managed the situation better at this point in time.
Do you have an update on the Goodegg investment?
Quote from @Jason Phillips:
Hi Steven - Sorry for the delay, but I am an investor with Goodegg (Hotel Fund and Wealth Fund II) and I have nothing but praise. Great people, intuitive platform, get their K1s out on time and returns have met expectations...one of the reasons I am invested in two funds at this point as the first investment was really to test the waters and validate I was a good fit.
Finally, someone answered the question. I appreciate your post. Most of the other posts provided general information that is good to know but did not answer the specific question. I would love to get your views four months later. Would be interested in connecting to learn more about your experience.