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  • Origin Investing Question

    I am new to private real estate and interested in investing in a private fund. I have looked into funds with several companies but have the best feeling about Origin so far. I like the evergreen structure of IncomePlus for the buy and hold mentality and the tax implications. My reservation is regarding whether Core Plus is aggressive enough. I am in my early 40s with a 90:10 stock/bond ratio in my portfolio. I realize this may come down to individual comfort with risk but I put the question out there anyways...Should I be looking for a value-add fund?

  • #2
    No real advice here, but I'm in the same boat. Similar age and portfolio ratio, looking to get some exposure in real estate. From what I've been reading, funds seem a better way to go than individual deals. I'm also trying to decide on the best fit.

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    • #3
      I dont have any advice but I would love to hear about your experience if you use them.

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      • #4
        I’ve scheduled a call with them sometime next week. I mostly did it when I read the other thread about there being a waiting list for over a year to join the fund. Might as well get my name on the list.

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        • #5
          I've been researching Origin's IncomePlus fund too and very much like the buy and hold feature. I've been in MLG Fund IV for a little over a year and my understanding is that the life of their funds tends to be around 5 to 7 years before they sell all the properties in the fund generating a taxable event for investors. I'm trying to find out if the 1031 exchange would be an option for individual investors in a private real estate fund to be able to use the proceeds from the sale of the properties in the fund to buy back into whatever fund is still open at MLG in 5 to 7 years to defer that taxable event.

          MLG Fund IV pays distributions quarterly with an average annual 8% preferred return over the life of the fund. The annual return is much less 8% in the earlier years of the fund and that is supposed to be offset by >8% returns in the latter years of the fund. I calculated over my first year in the fund that my return was 3.47%. That has been quite an opportunity cost in the past year when I compare how my MLG investment could have performed in the stock market. I also like that the Origin IncomePlus fund pays distributions monthly (approximately 0.5%) starting out at the 6% level for the preferred return rather than the gradual build up over several years to achieve the preferred return. For the Origin IncomePlus fund, they do have a one-time "administrative fee" of 2% assessed on the initial investment though which to me seems to be a deterrent to making a large initial investment beyond the $100,000 minimum. I was told that the minimum for additional investments is $20,000.

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          • #6
            Originally posted by Cameron View Post
            MLG Fund IV pays distributions quarterly with an average annual 8% preferred return over the life of the fund. The annual return is much less 8% in the earlier years of the fund and that is supposed to be offset by >8% returns in the latter years of the fund.
            This doesn’t sound like a really good deal if you consider the time value of money. You’d have to get paid a lot more than 8% in the out years to make up for being underpaid at the start of the fund.

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            • #7
              Agreed. It appears that they did become current on the 8% preferred return with the previous three funds so of the typical 5 to 7 years for the life a fund there are some latter years that exceed an 8% return. I have owned Vanguard's REIT in the past and noted the high correlation with the performance of rest of the stock market, especially during downturns. That was one benefit of being invested in this private fund, and not the Vanguard REIT Index Fund, prior to the most recent COVID 19-related significant market downturn because at least on paper my invested principal with MLG was preserved while value of the rest of my index funds plummeted. I was then able to use my quarterly distributions from the MLG IV fund to buy more index funds shares at a deep discount.

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