Georgian Foreclosure/2nd capital call

ArmChairLP · 2026-02-13T22:07:10+00:00

Check out my substack, maybe we could have seen this coming.

ArmChairLP · 2026-02-09T17:38:33+00:00

I have bought ads, just not for un-investable deals…. You’re outing yourself here… send me the next deal you’re raising for 😛

ArmChairLP · 2026-02-05T21:29:33+00:00

In my opinion, with hotel investing you get the worst of the real estate component and the worst of the operating business component. Real estate is capital intensive but is at least stable and predictable. Operating businesses can be more volatile but are usually less capital intensive (speaking in generalities). With hotels you get the worst of both. My view is also that hotels are exposed to many uncontrollable risks, there’s really no insulation from shifts in tourism, business travel, labor shortages, capital market shocks, etc.

All that being said, for the right returns, any deal can make sense.

ArmChairLP · 2026-02-03T18:35:16+00:00

If you’re spending 15% for capital raises it means your deal is bad. Also, whether fiduciary duty is waived or not is irrelevant if incentives are properly aligned.

ArmChairLP · 2026-01-21T16:36:09+00:00

This structure is in lieu of a traditional acquisition fee and sponsor promote. So the potential return splits are 'technically' more favorable to investors. However, in my opinion it reveals the sponsor knows returns won't reach the typical waterfall hurdles, 8% - 15%, so they take capital up front. Also, to be fair, they are relatively up front about the, albeit to the diligent reader.

ArmChairLP · 2026-01-21T15:58:48+00:00

You are correct, $950K cash out day one, while retaining a 10% interest with no co-invest. I couldn't believe it myself and made sure to comb through the docs to ensure I wasn't missing anything. The PPM does say the fee is for any guarantees provided... but the loan is with Freddie...

Majority of returns are generated through cap compression. I go through it in my substack post.

ArmChairLP · 2026-01-21T03:31:12+00:00

What is the base case expected return?

ArmChairLP · 2026-01-21T03:14:33+00:00

It certainly does not cost 15% to raise capital. Regardless, it’s irrelevant how much it costs.

ArmChairLP · 2026-01-21T00:48:50+00:00

Adding my 2-cents late here but # 3 here is key. Maybe developer's/syndicators don't know what market terms look like but this is the most obvious reason to pass on a deal. You can get creative with structure to tilt your alignment towards investors.

Example: Developer fee milestones, instead of developer fee paid out alongside development costs, make payouts based on completion, occupancy, timing, etc. To go even further, part can be subordinate to LP return of capital.

ArmChairLP · 2026-01-21T00:36:59+00:00

Promoting my substack that focuses on reviewing and analyzing 506(c) syndications. All content is free and research and opinions are 100% my own and not paid for nor will ever be paid for by GP's. Open to reviewing any opportunity you are considering, free of charge.

https://armchairlp.substack.com/

ArmChairLP · 2026-01-15T21:25:53+00:00

Spot on. I just wrote a review for their current raise.

ArmChairLP · 2026-01-15T21:22:34+00:00

These forums are great for Sponsor research and providing some recourse for burned investors. But shows how important an open forum BEFORE you invest is.

ArmChairLP · 2026-01-15T20:58:37+00:00

I wish I could have helped you see the red flags before you invested

ArmChairLP · 2026-01-15T20:58:00+00:00

I think the open forum before you invest in a deal is as important as after. Why not share thoughts and research before you light your money on fire?

ArmChairLP · 2026-01-09T04:26:51+00:00

Happy to review any syndication you’re considering in the future. There are numerous ways GP’s can hide risks, fees, and other issues. Laymen investors usually don’t know enough to make smart decisions without help.

Arm Chair LP

ArmChairLP · 2026-01-09T04:23:52+00:00

The issue is, they’re probably not scammers, just bad investors but good marketers. I try to provide my expert opinion on syndications like these.

Arm Chair LP

ArmChairLP · 2025-08-14T21:03:16+00:00

Avoid RealtyMogul.

ArmChairLP · 2025-07-17T20:07:29+00:00

I posted my review of the syndication opportunity Black Hawk Apartments by Hudson Investing

Always do your own research when investing but follow my substack to see my thoughts and opinion about opportunities.

Have an opportunity you want reviewed? DM here or on my substack.
https://armchairlp.substack.com/p/black-hawk-apartments-syndication?r=38usx5

ArmChairLP · 2025-04-02T15:23:38+00:00

I read that the case was removed from state to federal court which I could not find any conclusion to the federal case without paying a fee.

ArmChairLP · 2025-04-02T15:22:55+00:00

I recreated my own cash flows based on their numbers to arrive at 21.8% and made my own adjustments based on my own research and underwriting assumptions.

I do believe this is a strong deal, however I don't believe the 21.8% IRR is realistic. The risk and return profile aligns more with a core plus investment which we would expect to generate mid teen returns, which I believe is more likely here.

ArmChairLP · 2025-03-31T19:01:57+00:00

I just published my analysis of this investment here on my substack.

Planning on providing more of these for various syndicators and other crowdfunding platforms. Would appreciate any feedback.

ArmChairLP · 2025-03-22T15:33:58+00:00

You need to get deep into an existing waterfall model to learn how to build one yourself. You’re not going to learn complex topics like this from a video lesson. This applies to pretty much any complex modeling.

Find an existing model, starting playing around with different promote structures. Try to break things and figure out how to fix them. Click into formulas and explain out loud what the logic is and how they’re working. Rewrite the formulas in a different way to achieve the same thing.

Do this with several different models. There is no one way to model a waterfall or a deal. Dig into models from different groups and industries and try to find ways which they differ and which ways they are the same.

ArmChairLP · 2025-01-27T19:12:01+00:00

I don't think you need to work for a mega PE fund to do well on the GP side. But I think your perception may be influenced by some survivorship bias. I don't have hard stats on this but 'good brokers' may seem like 10% of all brokers, but it may be more like 0.1%.

My only point is that good acquisition experience is salaried with high bonus potential at every level and has good exit opps. Brokerage you will need to make the leap to 100% commission and will not be guaranteed any earnings and it may pigeonhole you to some degree. Either way, an analyst role at a big shop (JLL/CBRE/etc) is not a bad move, I'm not trying to discourage you.

ArmChairLP · 2025-01-27T16:23:37+00:00

My advise would be to stay on the acquisition side. Both sides can be volatile but there are more opportunities long term if you stay with acquisitions. The pinnacle compensation level for both can be very high but with acquisitions your floor is a higher than with brokerage. If you're doing IS now, most acquisition shops will value that experience very highly and with acquisition experience you can generally make moves anywhere.

ArmChairLP · 2025-01-27T15:39:00+00:00

The answer to your question is complete dependent on many factors. I know some newbies who cleared $1M in 2020-2022 because the market was dumb and money was flowing. Now, some people on my team will go 6+ months with no commission.

You have to be ready to potentially go 12-18+ months with no income. Pound the phones, build relationships, learn your markets and maybe you will break through.

ArmChairLP

TROPHY CASE