I need help, what am I missing on this deal

**tube205** · 06-06-2008, 06:48 PM

I am considering an investment in a CA company that is purchasing REO portfolios. They pool investor's money and purchase portfolio's of REO properties, manage and rent them out then sell in 5-8 years. They say my investment is backed by the real estate, flow through tax benefits will equal about 4-6% of my money each year (but no monthly income from the rent), and I will get my share of the profits when the properties are sold. Besides reading the participation agreement, what else should I look for before investing?

**DLinv** · 06-06-2008, 07:16 PM

Originally Posted by tube205

I am considering an investment in a CA company that is purchasing REO portfolios. They pool investor's money and purchase portfolio's of REO properties, manage and rent them out then sell in 5-8 years. They say my investment is backed by the real estate, flow through tax benefits will equal about 4-6% of my money each year (but no monthly income from the rent), and I will get my share of the profits when the properties are sold. Besides reading the participation agreement, what else should I look for before investing?

My company is doing the same thing buying 25-50 houses. But the investors does get monthly income from the rents. Also can you check what County the REO property are purchase? If i was investor i would like to know at least that. We are also CA basic company. Good Luck with your future investment.

**jamesww** · 06-06-2008, 07:21 PM

Originally Posted by tube205

I am considering an investment in a CA company that is purchasing REO portfolios. They pool investor's money and purchase portfolio's of REO properties, manage and rent them out then sell in 5-8 years. They say my investment is backed by the real estate, flow through tax benefits will equal about 4-6% of my money each year (but no monthly income from the rent), and I will get my share of the profits when the properties are sold. Besides reading the participation agreement, what else should I look for before investing?

Makes sure they are only buying the properties in the coastal cities. Inland California still has a long way to fall and you wont see a run up like this one there again. Also look into areas of the country that are stable or still rising that have a large number of foreclosures. The 4 largest cities in Texas have these opportunities along with cities in North Carolina and South Carolina.

Next make sure you have a guaranteed out in writing with in the next 5 years. Check with the attorney general in the state this fund is set up in to make sure these guys are legitiment. If the attorney general's office doesnt know of them run away fast. You should also check and see if they have any complaints filed with the BBB.

One word of caution alot of times it can be a bad idea to entirely count on appretiation when it comes to real estate. If you look how real estate prices suffered following the Savings and Loan crisis in California you will not over a 8 year period there was no net gain in property prices. I would suggest that you find a group that gives you some sort of pay out from the cash flow of the properties. These do exist and can be found. Another option is to find groups that are willing to pay say 5% on your money and grant you a 15% interest in the equity.

If you have any specific questions feel free to ask them. I am also willing to look over their investment plan for you to see if their investment model makes sense when put to the IRR test. Good luck if I dont hear from you.

**tube205** · 06-06-2008, 07:32 PM

I have a copy of the investment contract, but I signed a non disclosure agreement. Do I have to ask permission to send it out? They might not like that I am giving it away to people.
But yes I would really appreciate you investigating the company and telling me your opinion of the business model. It makes sense to me and I don't want to me a landlord on any more property, but I have no experience in a mutual fund type of investment. I will call and see if it is okay to have it reviewed.
Are you an investor, have you ever invested in a company like this?

**DLinv** · 06-07-2008, 01:10 AM

Originally Posted by jamesww

I would suggest that you find a group that gives you some sort of pay out from the cash flow of the properties. These do exist and can be found. Another option is to find groups that are willing to pay say 5% on your money and grant you a 15% interest in the equity.

This is how all our deals are structure. Do I have to ask permission to send it out? Yes!! But James could call and ask about the deal I'm sure they would be more then happy to sign him up. Also from a Company and investor view what county are they investing in? I would stay away from the high desert and some parts of the inland empire. Rents are not high and resale would not be the best. Good LucK

**tube205** · 06-09-2008, 09:29 AM

From what I have learned so far they are only investing in SFR in Orange, LA and Ventura County. I asked about monthly cash flow, they said that the reason there is no monthly cash flow is because after the portfolio is rented out they refinance the properties at 60% LTV and return a large portion (they said it will be between 60% and 100% of my original investment) and the rents will then cover the monthly mortgage. I want to thank you all for your ideas, I didn't think to ask about cash flow, but since I would get most of my original investment back I am less worried about cash flow now.
They have a website, am I allowed to put the website or company name in a post on here? Then you could call them directly and maybe find something that I am missing. Thank you.

**DLinv** · 06-09-2008, 10:19 AM

Originally Posted by tube205

From what I have learned so far they are only investing in SFR in Orange, LA and Ventura County. I asked about monthly cash flow, they said that the reason there is no monthly cash flow is because after the portfolio is rented out they refinance the properties at 60% LTV and return a large portion (they said it will be between 60% and 100% of my original investment) and the rents will then cover the monthly mortgage. I want to thank you all for your ideas, I didn't think to ask about cash flow, but since I would get most of my original investment back I am less worried about cash flow now.
They have a website, am I allowed to put the website or company name in a post on here? Then you could call them directly and maybe find something that I am missing. Thank you.

Yes you can put the website up i think you need 15 post. You could put there name up.

**tube205** · 06-09-2008, 10:36 AM

The name of the company is Symbios Advisors. I don't know the url off hand I just use google and it comes up #1. Has anyone here invested with them?

**DLinv** · 06-09-2008, 10:54 AM

Originally Posted by tube205

The name of the company is Symbios Advisors. I don't know the url off hand I just use google and it comes up #1. Has anyone here invested with them?

No i have not heard of them. But the funny thing is they are down the street from my company Dlinv.com Small world i guess. Also how did they get your business? Friend, Family, Forum