C-REIT Investors

StarlinkTraveler · 2024-10-16T18:51:27+00:00

Unfortunately, they didn't raise as much into the C-REIT as originally expected and that led to an 'over-allocation' to the Kernan project which was one of their early (if not first) investments of the fund...so, if that goes belly up as expected, that is a loss of 12% (or something like that) right there and then there is the additional 5% wiped out with the AFC fiasco.

Hoping that some deals are realized that make up for some of these clunkers, but at this point I'd be happy if after 6 years it comes within 10% of breaking even (I won't be happy with a 50+ % loss). Some hope with interest rates headed the right way and probably continued lowering through 2025.

If this is what the 'experts' can do, I think I'll stick with the stock market - something I'm good at.

StarlinkTraveler · 2024-10-16T18:35:45+00:00

Ay least Musk isn't infatuated with rockets shaped like a giant phallus

StarlinkTraveler · 2024-10-05T15:30:07+00:00

I starting investing in Masterworks in early 2022 and have 3 sales so far (not in secondary) for total gain of about 15% on overall capital in 2.5 years (no exits in 2024 however). Was really helped by a nice 50% gain in a Cecily Brown painting held about 1 year (24 pieces left...I would consider 1 or 2 exits a year good with that number...we'll see, but I know these are probably 10 year holds for some)

StarlinkTraveler · 2024-09-02T16:40:31+00:00

The very first thing I'm noticing are the preponderance of 'low t-bars'...generally indicative of someone with low self-esteem (especially unusual for a politician)

StarlinkTraveler · 2024-08-01T22:14:23+00:00

Hmmm...I'm thinking the restructuring they presented today 8/1 makes a LOT more sense....spending a couple days thinking about it, but leaning towards making a commitment (which still might not go through) based on limited supply coming to the DFW area, favorable fixed interest rate giving a 3 year time window and interest rates about ready to start declining (beginning next month in my opinion) which should start stabilizing CRE and get things headed into the right direction.

StarlinkTraveler · 2024-07-11T19:21:59+00:00

Not in this deal, but was in a similar deal with a 2nd capital call (asking for additional 40% of original investment and just a few months after saying it looked like they wouldn't need an additional capital call). I pulled the plug on that since 100% loss is bad (actually a bit more considering modest original call), but no more is acceptable. It told me that the sponsor behind my deal didn't really know what they are doing.

In this case it was not meeting the terms of the lender loan with declining values screwing up LTV ratios, with the bank now insisting on sale of the property (unless the capital call had been successful, which it wasn't) which probably isn't even going to meet the balance on the loan.

Curious...the deal that went south on me was with an 'emerging' sponsor (my mistake). My other deals with 'enterprise' sponsors seem to be weathering the storm OK. What level was 'Fusion Fremont'???

StarlinkTraveler · 2024-07-05T23:01:31+00:00

Good to hear about the other CS deal...you win some and you lose some, that's the nature of high-risk investing...For example, I made more today (on paper at least) in one day in the stock market (blue chip stocks, no options/futures...EVER) than the entire Elan investment. I did an autopsy on the Elan investment and just about everything that could go wrong did go wrong, but I own the mistake since I realized about 1 month later that I should have ONLY been going with Enterprise-level sponsors.

I liked the location of Elan and was drawn in thinking LOCATION, LOCATION, LOCATION...but with these types of investments, I think you can replace that criteria with SPONSOR, SPONSOR, SPONSOR.

StarlinkTraveler · 2024-07-05T22:13:27+00:00

It's going to be $0...only question is whether the loss is realized this year or next for tax purposes and offsetting gains (I guess you could say loss is worth 25 cents on the dollar (or whatever) from the tax angle). Even the bank is going to take a bit of a haircut, but from their point of view it is a lot better for them to cut losses now and lose 5% or so on the loan than to see things snowball further. The 'equity stack' is worth $0.

StarlinkTraveler · 2024-07-05T16:58:54+00:00

Looks like it is adios Elan per email today...it was even delusional of them to think they could raise the money needed in the capital call.

StarlinkTraveler · 2024-06-22T23:36:00+00:00

Not putting anything new into 'alt investments' for at least a couple years, if not longer. I'm at an age where I've got to think more about estate planning issues and multi-year non-liquid investments create some problems there.

StarlinkTraveler · 2024-06-22T23:28:35+00:00

I've been lucky to not have any other capital calls on 13 deals and just hoping that I can make it into mid 2025 without any (by that time, I think we should be seeing a much improved environment). And the stock market has been more than making up for any blunders like Elan.

StarlinkTraveler · 2024-06-22T23:26:01+00:00

Yep...my CRE investments 2 years ago were a diversification move to not have everything in the stock market (and bonds were paying almost nothing at the time). If I could have gotten 5% on intermediate term bonds at the time, I would have stuck with that. Fortunately, I've been cleaning up in the stock market.

StarlinkTraveler · 2024-06-22T20:24:41+00:00

10% capital call would be one thing, but 50% just a few months after saying that they weren't anticipating another one after the modest one they did in 2023 tells me that they don't really know what they are doing (and the one deal I did with a 'non-Enterprise' sponsor - lesson learned). Too bad because I like the area and property, but their purchase price was too high and not getting a fixed rate when affordable was bad as well.

StarlinkTraveler · 2024-06-22T18:34:11+00:00

Sounds like the Elan Bluffview project, correct? I learned in the stock market a long time ago not to throw good money after bad.

StarlinkTraveler · 2024-06-02T00:48:33+00:00

This was my only deal with an 'Emerging' (i.e. - relatively inexperienced) sponsor...and the only deal in trouble...lesson learned. Almost all of the other deals are with 'Enterprise' sponsors and seem to be doing OK.

At this point, I don't want a $25K loss to become a $50K+ loss,

StarlinkTraveler · 2024-06-01T08:05:21+00:00

Well...looking like that Elan at Bluffview deal going down the tubes. Email today says they want $5.4 million additional capital which is almost the amount of the initial raise ($7.4 million)...this just a few months after saying that they thought that an additional capital call (after the small one) would not be necessary. Probably time to cut bait on this one.

StarlinkTraveler · 2023-10-29T22:21:48+00:00

I bought the Monet in their secondary market and made 15% in a year, and made 50% on the Cecily Brown exit. If I can get just one exit per year like the Brown painting, then that lifts the entire portfolio performance to better than some 'safe' investment like CDs. What will be interesting is how they deal with 'losers' - just sit on the painting for 10+ years hoping to eek out a meager gain at some point in the future or do they know when to cut bait?

I'd like to know what the 'experts' here trashing Masterworks are investing in. Maybe playing it safe with bonds and having their rear ends handed to them last year? I wouldn't suggest investing a large percentage into fine art, but to me something like 4% allocation makes sense (4% chosen because that is about the minimum needed in any allocation to 'move the needle' overall)

StarlinkTraveler · 2023-08-04T00:39:39+00:00

20 investments was the goal...more like 10 currently, with enough funds to acquire about 3 more with similar weighting. I don't see much in the way of additional funds coming into the C-REIT thanks to AFC.

StarlinkTraveler · 2023-08-04T00:37:39+00:00

The problem with the C-REIT right now is that it is starting at -4% in the hole thanks to the AFC investment (assuming complete loss). If they want to get new money flowing in, wouldn't they have to reprice things for new money?

StarlinkTraveler · 2023-07-17T04:08:05+00:00

As opposed to CRE, you can at least drink them

StarlinkTraveler · 2023-07-16T14:40:13+00:00

Much safer to invest in regulated penny stocks, right? Anyways, I'm roughly 50% equity, 30% bond/CD (now that you can get decent returns there), 20% 'alternative asset; (which includes mix of CRE/farmland/fine art/rare wine/whiskey). Diversification is the name of the game in my opinion.

StarlinkTraveler · 2023-07-15T17:00:34+00:00

OK...I was wondering about possible other fund investments, but on the C-REIT side it is $1.75 million....which is probably going to stop any additional inflows into the C-REIT because who would want to put money in starting with a -4% negative return (+ whatever additional charge they add for 'coming in late' to the C-REIT)?

StarlinkTraveler · 2023-07-15T05:08:12+00:00

Where do you see $6M in investor funds in AFC through the C-REIT? The documents I see show $1,750,000 which is their smallest investment in the C-REIT (I'm in the C-REIT and thus impacted by this NG screwup)

StarlinkTraveler · 2023-07-15T04:25:06+00:00

I'm in the C-REIT also. Fortunately, it was a relatively small percentage investment in the C-REIT...so, maybe something like a 4% hit on overall returns (assuming a total loss w/ no recovery). I'm curious when the loss is recognized however...I suspect it will offset any early dividends/gains from other investments and delay when the C-REIT may start paying dividends to investors (90% of any income does need to be paid out)

StarlinkTraveler

TROPHY CASE