Announcement

Collapse
No announcement yet.

37th Parallel Parkside Vista offering - Numbers not adding up

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

  • 37th Parallel Parkside Vista offering - Numbers not adding up

    Anyone else reviewing the prospectus? Page 65 gives projected returns and an example with a $500,000 investment. The prospectus states an estimated overall return of over 12%. When I run the numbers I get less than 9% overall return and a 10% IRR. I sent 37th Parallel questions several days ago and no reply.

    ​​​​​​Am I missing something in the math or is this an error in the propectus?

  • #2
    No interest in these things, partly because of the lack of transparency. Hopefully, others will have more helpful thoughts.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

    Comment


    • #3
      post pic of example

      Comment


      • #4
        My wife hit veto as soon as I mentioned these things a few years ago. She said something like: "wait......you don't really trust real estate agents and contractors due to a conflict of interest but you think this might be a good idea?!"
        I must admit she is correct.
        As a doc, I just wonder if I am getting the best deals available offered to me? I wonder if I am at an informational disadvantage? Being sold stuff?
        I never invested. Every now and again I consider it but my wife won't allow it......so........boring old index funds and carry on.

        P.S. The fish are biting!

        T-Angler out.

        Comment


        • #5
          Pic of page 65?

          Comment


          • #6
            I am so averse to syndications. I cannot help myself. So I bite the bullet and invest directly in real estate. It is a bit of work, but I use outstanding professional management. It’s worth it to us for the massive tax advantages.

            Comment


            • #7
              Attached is an image from the prospectus. So far I have not gotten a clear answer from 37th Par. My calculations show a 7.9% annual rate of return and an IRR of 9.6%. They are claiming 12.04% annual rate of return over 10 years. Would like to see how others calculate the numbers. If the error is true, does not provide confidence in the rest of their work.





              Comment


              • #8
                Originally posted by PhudInvestor View Post
                Attached is an image from the prospectus. So far I have not gotten a clear answer from 37th Par. My calculations show a 7.9% annual rate of return and an IRR of 9.6%. They are claiming 12.04% annual rate of return over 10 years. Would like to see how others calculate the numbers. If the error is true, does not provide confidence in the rest of their work.
                does that imply that you have received what you felt to be an unclear answer?

                Comment


                • #9
                  Theres an infinite number of ways to slice/dice these to get a smidge up here and there. The cagr on a simple calculator comes out to 8.7%, ARR of 8.27%.

                  However, this is not what the slide says. They do not appear to be claiming that at all. It says "annual profit" which can be whatever they want it to be nearly and is highly unlikely to be anything but partially related to return, its most likely hoped to be conflated with that for the few that read the prospectus.

                  Comment


                  • #10
                    I tried to change the image last night to include the details at the bottom but the system wouldn't let me change it. Here is the up updated image. It states that Annual Return is the "average annual growth rate". Yes, they are mixing Annual Profit (what ever that is), with Annual Return, with Annual Growth Rate.

                    The explanation I got from 37th PP was that they found that over the 10 years you get an "average" of $60,200 per year of return so it is a $60,200/$500,000 or a 12.04% annual return. We are suppose to ignore that most of the money is returned in the last year. Every definition I have ever seen of Annual Rate of Return includes the time value of money. That is why IRR is the best number to use for situation where the funds are returned over many years.



                    Comment


                    • #11
                      Yeah, in the end your return is just your return. They expect 2.2x over 10 years, no matter how you cut it its that. I got an IRR of 10.19%. Their slide is difficult to see but your preferred return is 35k/yr with a massive disbursement in year 10 which pulls up what amounts to a pretty paltry IRR by their own admission of 10yr average is 3.69%. Shouldnt it be 60,700 though?

                      Acting like a end of term disbursement goes back in time to average out return is fine, what is totally bs is pretending that can be used for the average of return, which frankly borders on misleading...Slide/def are set up for people to misinterpret it.

                      Comment

                      Working...
                      X