Scott K.
Level 2: ContributorReviews by Scott K.
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Self Storage Succes by Design
Paul Bennett at AAA Self Storage and his experienced team have over three decades of development experience in self-storage. They have transitioned their success in developing single-site investments to a fund model. I like the increased diversification and am in Fund II (almost one year). Normally, with a development, there is such a long lag and a blind pool, but AAA has already purchased sites, vetted them, and obtained permitting and titling to proceed, then sells them at FMV to the fund (I realize they could abuse this, but they use a reasonable FMV methodology). This makes the properties ready to go upon acquisition of funds from investors and speeds up to a 2-3 year process to build out, then stabilize a self-storage facility to where it can be sold. They are super efficient and build out in phases. They are also doing small-bay industrial, a much sought-after CRE subcategory. The key is that they build to a specific yield-on-cost with a healthy margin far above the prevailing, not wishful thinking, cap rate at sale to ensure contingencies, and most importantly, profitability. They have done this on over 30 facilities. They have the team, the expertise, and the connections for exits. Their transparency, eagerness to entertain any questions, and excellent communication are the kind of operator I trust. Finally, look at the self-storage market cycle going from overbuilt during cheap loan days around 2020-2 to underbuilt in the next few years, with growing demand that they will sell into this optimal window. Paul knows his industry and CRE backwards and forwards, and the terms are very rewarding without being overstated or hyperbolic. While I'm waiting for the results, I anticipate participating in more deals in the future.
Senior Assisted Living with Expereinced Reputable Sponsor
Let me preface this review that this is our first syndication investment, and we just completed the first tranche. So I'll keep my comments to this aspect and update later on performance. Praxis has been doing mainly MFH syndications for well over a decade, and Brian, the CEO, even longer in the game. Their IR peeps, Bob & Haley, are great communicators and all are an "open book" to all annoying questions during my many inquiries. We live in Northern California, where Praxis is based, and they were open to a physical visit (near Sonoma wine country, so we made a day of it). I spoke with a long-time wealth manager who has put his clients and his own money invested with them in many MFH syndications. He described them and their communications as "Top Tier" among syndicators he has invested with over his many years (he was in his 70s. On the website "BiggerPockets.com" and another Investor's club website, I follow Praxis received many very good comments. BTW, they brought in a new partner who had decades of REIT experience in senior living to do this offering since it wasn't in their wheelhouse house and like most RE investors know, the past few years have not been good for MFH investments, but should be soon as the market is bottoming. Assisted living tanked during the COVID pandemic, which has created an opportunity in an industry that has an exploding need from all the "baby boomers' navigating their elder years. So there you have it: Reputable, Ethical, God communications, with Experience, and now hopefully opportunistic with their healthcare fund VII.