Announcement

Collapse
No announcement yet.

Origin Income Plus Fund

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • #16
    Originally posted by BMagner View Post
    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?
    These sorts of questions are perfect for asking the sponsor the question, then posting their answer here, rather than asking someone else to do so. Where else is the answer going to be found than either in the paperwork (where you say it isn't) or from the sponsor? This is a particularly important question to ask if regular distributions are a big reason why you are investing in the fund.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

    Comment


    • #17
      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?
      My understanding is that DLP had a better 2020. But again, this is easy information to get from the sponsors. Origin's IncomePlus Fund certainly didn't have a 2020 worth writing home about. Much better in 2021 though. Here's the Origin data as of the last update they sent me:

      Monthly Total Returns (% Net of Fees)


      After 2 quarters, the DLP housing fund has a 6.3% return YTD in 2021. It made 6.0% in 2020.

      But you're right that every fund/syndicator uses a different fee structure making it hard to compare apples to apples.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

      Comment


      • #18
        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
        Not a direct comparison, but when I've written about each of these I've talked about what the fees are. It would be very easy to put them all side by side to compare. But they're all different enough that an apples to apples comparison isn't particularly useful. Better to pay a bigger "load" or better to pay a higher promote if it does well? Well, it depends on how the fund does and you can't know that in advance.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

        Comment


        • #19
          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.
          Be aware DLP's minimums are going up from $100K to $200K at the end of October. That's the usual trend. It's simply easier to manage fewer big dollar investors.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

          Comment


          • #20
            Originally posted by Cameron View Post

            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.
            Again, ask them. These guys have full-time employees paid to answer your questions like this. They would like nothing more than to tell you about their funds. Just because they can't put much on the public facing website due to accredited investor compliance/regulation concerns doesn't mean they're hiding the information.

            The 2020 return for the Origin IncomePlus Fund was 1.4%.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

            Comment


            • #21
              Originally posted by Cameron View Post

              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.
              Yes, they all seem to calculate return a little differently though. That's one reason I track my returns myself using Excel's XIRR. I've yet to have the return on any real estate investment match what the syndicator/fund manager told me it was. But I'm fairly strict. If you sit on my money for 1-2 months before investing it, I count that time period on my spreadsheet but they do not. If you get the money back from the property but don't send it to me, I count that time period but they do not. I count time from when it leaves my bank account until it gets back to my bank account.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

              Comment


              • #22
                Originally posted by CRECommenter View Post
                "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."

                Cameron--I'm thinking of investing in MLG's DIV Fund V through a SD IRA. I have not gone the SD IRA route before and wondering if you could share any thoughts on the experience thus far. In my case it would essentially be transferring REIT index money from vanguard to get further RE diversification into privately owned RE.
                CREcommenter, I was already established with Schwab and the process was relatively easy. I had an inherited traditional IRA that I then transferred to Schwab that I used for holding the DIV fund. I already had a significant amount invested with MLG in the general fund IV, so MLG was flexible with me on their minimum required investment for the DIV fund in this account. I thought after contacting MLG to do a subscription for the DIV fund, that they then handled all the correspondence with Schwab to set up the alternative investment in the IRA but there is some paperwork you have to directly complete with Schwab to designate the account to hold an alternative investment. There is an annual $250 fee Schwab charges for holding an alternative investment there. I did negotiate with Schwab a waiver of the fee for the first year for bringing the funds over to Schwab. I also filled out additional paperwork so that this annual fee moving forward would be taken from a separate taxable brokerage account so money wasn't coming out of a tax-deferred account any sooner than it had to.

                The fund has performed as expected. Unlike the general fund where you get a direct deposit of the quarterly distribution on the last day of the quarter, the DIV fund apparently gets its distribution as a check sent to the financial institution where the fund is held from MLG so it typically shows up 7 to 10 days after the end of the quarter. Holding this alternative investment requiring accredited investor status in a retirement account did have me concerned after recently learning about possible changes in tax regulations with pending legislation that these types of investments would need to be removed from IRAs within 2 years as a taxable event. I did inquire with MLG if there might be some ways to avoid that if it did go into law or whether the fund may have sunsetted within that time frame and they said they are looking into how potentially this could be handled. I did see on the most recent DLP Capital Partners webinar that Don Wenner fielded this exact question and he said something to the effect that DLP is part of a larger group lobbying against this and he seemed pretty confident that it wouldn't go through. We'll see.

                I will just add that given that mine is in an inherited IRA account, I am required to make annual required minimum distributions even though I'm much younger than the traditional age that RMDs become required. For that reason, I held some of the account value in reserve outside of the DIV fund and keep it invested it in more liquid assets so that I have access to them to put toward the annual RMD along with the quarterly dividend that the fund pays.
                Last edited by Cameron; 10-24-2021, 01:07 PM.

                Comment

                Working...
                X