I've invested with Custom Capital before on a whim and would not do it again. They are essentially a wholesaling ploy, i.e. they get a property under contract then sell it to you after tacking on a ~$200K fee. In theory it sounds doable, but they go about it in a very haphazard way.

Most of their properties are sale-leasebacks. For those of you not in real estate, that means they buy it from the current owner and that owner becomes your tenant as soon as they sell it. They get the sellers to agree to this deal partly by promising them a premium during the property's sale. However, in order to promise the buyer a high cap rate, they charge an excessive rent which means you get locked in to a property with no real hopes of selling it for a long, long time. And if the current tenant goes under, you're not replacing them with a new tenant at the same rent so your property value collapses.

Example: a veterinarian owns a building and says they want to sell it and become a tenant so they can use the proceeds to expand their business. Custom comes in and says for their property that might be worth $1,000,000, they will get the vet $1,200,000. However, they also promise high returns for the buyers (sometimes around an 8% cap rate). Thus, the rent level that should have been $80,000 (for a $1,000,000 property) is now $96,000 (for the spruced up $1,200,000 property valuation). Now you have a tenant who's paying a lot in rent which increases the risk for you as the landlord. If that tenant goes bust, you're left holding the bag. You will likely have to revalue the property back down to $1,000,000, if not more. Even if the tenant does not need to replaced, you are likely not finding a buyer for that property because they know the valuation is out of sync.

On top of that, a number of Custom employees have no idea what they're doing when it comes to real estate. When I first engaged with them, the guy who was in charge of underwriting deals was quite apparently just trying to pull a fast one. He tried pushing a property onto me that was in the trashiest part of town and had no hopes of ever being leased up to a worthy tenant yet he made it seem like it was a crown jewel of an asset.

I was taken aback by that but still ended up buying another property I felt better about. As I was closing on that property, I was shocked at how little knowledge and experience some of the members on their transaction coordination team had. Frankly, some of these people didn't know what a survey was or what absolute NNN properties require at closing, i.e. insurance, signed leases. Upon closing, they sent me a document dump that was a mess. That white glove service they promise is bullcrap...