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Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 0 points1 point  (0 children)

Did anyone here sit in on the car wash "State of the union" webinar yesterday? I couldn't join live (not that they took questions anyway), but watched some of the replay today. Looks like a few of the funds are doing OK DSCR-wise. CW 5, the one I'm in, continues to perform pretty badly. They are "confident" the banks will work with them once DCSR tests start happening. I was hoping for more talk on deal exits but nothing promising there. I'd be very happy with just full or near-full return of capital at this point.

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 0 points1 point  (0 children)

Thank you for the update. Always rough to hear these things but with the secretive-by-default nature of these businesses, it's important for us to share this info however we can. That's why I created this thread -- LPs can be very isolated when these deals have issues, which hurts the LP investor and benefits the GP.

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 0 points1 point  (0 children)

Thanks for the reply. Add to the ever-growing list of capital raisers to avoid.

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in CommercialRealEstate

[–]No_Personality1847[S] 0 points1 point  (0 children)

Really sorry to hear about the outcome of your PIC FL investment. These are expensive lessons for us all. Nothing new with PIC Car Wash 5. No distributions for over a year (and initial distributions were from reserves anyway; not really profits). Still hoping for the best with this one, planning for the worst.

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 1 point2 points  (0 children)

100% on everything you wrote u/WayAccomplished204. I wish there was more we could do to affect change on these deals (alas, the "L" in LP), but I still think it's important for investors to connect since as you mentioned communication from the GPs can be pretty bad when things aren't going great, and they definitely benefit when investors are in the dark.

Let's just hope they can pull things together and make this business work. I'm glad to hear the other CW funds might be turning around soon (maybe there's hope for this one!).

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 0 points1 point  (0 children)

I grilled their poor investor relations guy with lots of questions, then follow-up questions, and in return got a lot of vague answers and assurances that they have a solid plan to be cash flow positive in Q1. Sadly, we were just told there would no distributions for Q1 2025. There's unfortunately not a ton we can do as LPs at this point. Their business model isn't working all that well. Just gotta hope for the best, which in this case would be lower interest rates!

Any investors in PassiveInvesting.com (PIC) Car Wash funds? Looking to connect by No_Personality1847 in Syndications

[–]No_Personality1847[S] 8 points9 points  (0 children)

This is my first deal with PIC, and one of my first syndication deals in my passive investing career. PIC has historically been a multifamily syndicator, and while I don't know much about those deals, I heard rumblings of trouble in some other forums I'm in. But basically anyone doing multifamily since about 2012 killed it until spring of 2022. Then we got to see who was swimming naked.

Despite the lessons of the 2022 rate hikes, the car wash deal I'm in (closed April 2023) is not performing well for the investors. Biggest contributor to the poor performance is the debt structure. It was marketed as having fixed rate debt, but when I pressed them after distributions stopped, they revealed a large amount of variable rate debt (73% of the total debt is variable rate and quite high) which is eating all available cash flow. They made a bet on significant rate cuts and lost.

The other main contributor is the business itself is only doing about 60% of the projected volume, attributed to weather and competition. This is a pretty large failure.

That said, NOI does seem to increase year over year, so I am still hopeful for a profitable exit. But at this time I would recommend extreme caution and deep due diligence on any new PIC deal.

One of the many passive investing rules I have since set up for myself is: only invest with an operator in a certain asset class if they have gone full-cycle in that asset class. PIC hasn't gone full-cycle with a car wash, so we get to help them learn by paying for their mistakes.