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  • Origin Income Plus Fund

    I have posted here before about real estate funds. For those who have no interest in actively managing a property, a real estate fund may be able to provide some passive exposure to real estate, with less correlation to public markets and greater diversification than purchasing individual properties. Of course, there are downsides including lack of control, manager risk, platform risk, fees, and lack of liquidity. I have no direct experience investing in these funds, but I am collecting as much information as possible before deciding to invest.

    The last fund I inquired about was MLG Capital Fund IV. One of the significant downsides of this fund was that it required filing of multiple out-of-state tax returns. This would cut into returns significantly, depending upon the amount of capital invested.

    Recently, I have started exploring Origin's Income Plus Fund. This fund invests in multifamily properties and debt investments. It apparently does NOT require filing out-of-state tax returns. I do not quite understand the tax implications of the fund, but apparently various techniques are utilized to minimize the effect of taxes. The fund is also an "evergreen" fund, meaning that it can be held indefinitely (compared to the 5-7 year duration of most other funds).

    Does anyone have any experience with or thoughts about this fund? Thank you for your time.


  • #2
    I've been on the waiting list for almost a year now on this fund. I've already submitted my paperwork and verified accredited investor status...but I just keep waiting for the capital call.

    The prior Origin funds (esp funds 1 and 2) performed very well, so I too was interested in this fund and like you I really liked the simplicity of no multiple state K-1s.

    However, the wait is to the point where I'm thinking about deploying assets elsewhere. To their credit they have stayed in touch and at least notified me of ongoing delays on capital calls.

    I suspect it's a couple things:
    1. The company is stating they're just being very careful with acquisitions and this late in the real estate cycle (we're assuming this real estate boom is on it's way down, but who knows), it's tough to get a "good deal" on the front end. So not a lot of recent acquisitions.
    2. I'm suspecting (but have no way of knowing this) that I'm being bumped to the back of the line because I have a minimum investment and institutional investors may be bypassing me.

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    • #3
      Make sure you understand it before investing in it, but I like the Origin guys. I could end up in this fund at some point. I'm invested in Fund III.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        Any updates on how this fund is doing?

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        • #5
          I'm in the fund. I think my overall return is negative so far. Let me look at my spreadsheet:

          I invested in February. I reinvest everything. I'm down 3.8% so far. The Vanguard REIT index fund is down 11.8% this year. My private debt funds seem to be making less than usual (8-12%), but are still on poise to make 6% or so this year.

          Hope that's helpful.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            I'm also invested, but I got in after the ~7% reduction in the unit value (stock price equivalent, essentially).

            My capital was called in August, invested in September, and I'll receive my first distribution in about a week. I expect to have a slightly positive return by year's end.

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            • #7
              Considering this fund. Thanks for starting this thread and the responses already. Doing my diligence on this company, looks good so far.
              Any other info or testimonials - good or bad - would be much appreciated. 90% sure I am going to invest, just taking my time.

              Thanks

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              • #8
                I recently started some diligence on the Origin Income Plus fund. I've run into something I consider to be a little odd: there is no language in the governing documents around Origin's obligation to distribute, the waterfall of funds and under what conditions distributions are made. I'm accustomed to a clear description of the sponsors obligation to distribute funds and how those distributions will be made in passive deals like this. The documents only seem to provide clarity around Origin's fees and the flexibility to not distribute to investors. I can't be the first person who's read the documents and had this reaction so I'm hoping there's something I'm missing. Maybe I'm thinking about this too much like a multifamily investment vs a REIT. Any existing investors or anyone else who has diligenced those documents run into this and, if so, how did you get comfortable?

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                • #9
                  Any thoughts on the Origin Income Plus fund vs the DLP Housing Fund? Same general strategy. Would be interesting to compare performance over 2020 as they both launch about the same time. Origin seems to charge a lower management fee, which I think is 1.25% compared to 1.5% at DLP. Both have a 6% preferred return. Origin then has a 90/10 split of profits above that, while DLP is 80/20 up to 12% and then 60/40 above that. Ouch! On the other hand, who cares what the fees are if your net performance is better since paying for better management, better property selection etc could be worthwhile. DLP had a 7.72% NAV adjustment for 2020 in addition to the 0.5% monthly drip contributions for a total of 13.724% for the year, or 14.495% for those who reinvested their monthly preferred distributions. These are the final returns net of fees. Would be very curious for anyone who has the Origin data for comparison?

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                  • #10


                    Please correct me if I am wrong, but in reviewing the info sent from Origin for the income plus fund, for investments under 250K, it looks like there is a 2% load (what they call a "one time admin feed" plus a 1.25% annual management fee for assets they manage. In addition, it looks there is a 0.5% acquisition fee for each property they purchase plus any additional management fees for each underlying property . Is that how you see it?

                    Have you done any comparison in one of your blogs or other posts as to how their fee structure compares to similar entities such as DLP or 37th parallel , which I know are 2 other funds you have worked with?

                    Thanks, as always, for your help in making all of us better investors,

                    Andrew

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                    • #11
                      Originally posted by acemd View Post

                      Please correct me if I am wrong, but in reviewing the info sent from Origin for the income plus fund, for investments under 250K, it looks like there is a 2% load (what they call a "one time admin feed" plus a 1.25% annual management fee for assets they manage. In addition, it looks there is a 0.5% acquisition fee for each property they purchase plus any additional management fees for each underlying property . Is that how you see it?

                      Have you done any comparison in one of your blogs or other posts as to how their fee structure compares to similar entities such as DLP or 37th parallel , which I know are 2 other funds you have worked with?

                      Thanks, as always, for your help in making all of us better investors,

                      Andrew
                      Ouch, I missed that part. See my post above, Origin usually lower fee schedule but if they get you when under 250k initial investment that will make this more expensive for many docs on this board and would likely push me to continue to stay with DLP plus other one off syndications that look really attractive.

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                      • #12
                        Originally posted by Hoopoe View Post
                        Any thoughts on the Origin Income Plus fund vs the DLP Housing Fund? Same general strategy. Would be interesting to compare performance over 2020 as they both launch about the same time. Origin seems to charge a lower management fee, which I think is 1.25% compared to 1.5% at DLP. Both have a 6% preferred return. Origin then has a 90/10 split of profits above that, while DLP is 80/20 up to 12% and then 60/40 above that. Ouch! On the other hand, who cares what the fees are if your net performance is better since paying for better management, better property selection etc could be worthwhile. DLP had a 7.72% NAV adjustment for 2020 in addition to the 0.5% monthly drip contributions for a total of 13.724% for the year, or 14.495% for those who reinvested their monthly preferred distributions. These are the final returns net of fees. Would be very curious for anyone who has the Origin data for comparison?
                        Same here regarding wanting to see data on Origin's overall performance for 2020. I've been looking and haven't been able to find anything on it as of yet.

                        Comment


                        • #13
                          Originally posted by Hoopoe View Post

                          Ouch, I missed that part. See my post above, Origin usually lower fee schedule but if they get you when under 250k initial investment that will make this more expensive for many docs on this board and would likely push me to continue to stay with DLP plus other one off syndications that look really attractive.
                          Looking at how these funds find ways to embed their costs or inflate their share of the return reminds me of how different mortgage lenders find ways to cloak their fees. I also invested in MLG Capital a couple years ago and see with the cumulative 8% preferred return you give up some of the time value of money over the life of the fund. Plus it appears that the 8% preferred return on the general Fund IV is based on the static amount of your initial investment over the life of the fund as far as I can tell. Contrast that with Origin and DLP where they are adjusting the NAV of the fund on an annual basis so (if/as) the value of the fund increases year to year your preferred return is benefitting from that capital appreciation. I also have MLG's DIV Fund IV in a retirement account and there I am seeing an adjustment of the NAV of the fund over time.

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