What's up with CityVest?

[SteffanW]

Has anybody hear anything from CityVest about distributions on the NEMI II Medical Fund, specifically why they are so small and infrequent?
According to the Q1 2021 Investor Report, “NEMI FUND II made its first distribution to investors in September 2020 and has continued quarterly since" (See attachment).

On a $50K investment my distributions received from CityVest were $239.98 on 10/19/20 and $215.98 on 2/2/21. So, what gives? I seem to be missing at least 1 quarter of distributions. Are quarterly distributions just getting gobbled up be fees? It would be really nice if CityVest explained that if this were the case. CityVest doesn’t seem to want to return emails or phone calls. This is a known problem according to previous CityVest posts. Apparently WCI recently stopped doing business with CityVest because of this.

[ffuser1]

I've been using cityvest, mostly on WCI recommendations. It has been nothing but terrible - definitely not even close to predicted returns. Alan doesn't respond to phone calls or emails and tax forms were significantly delayed this year. Overall, terrible recommendation by WCI. Really frustrating.

[The White Coat Investor]

I've been using cityvest, mostly on WCI recommendations. It has been nothing but terrible - definitely not even close to predicted returns. Alan doesn't respond to phone calls or emails and tax forms were significantly delayed this year. Overall, terrible recommendation by WCI. Really frustrating.

I don't think it's fair to say we recommended the firm when every email we send to our real estate list and the top of our real estate page says this:

With some services we recommend, vetting/due diligence is relatively easy because of the nature of the business. Insurance might be the prime example, but I also include student loan refinancing, mortgages, and even financial advisors in that list. The services take place relatively rapidly and many readers use each of those services in any given month. Due to the long-term nature of real estate investments, this process is dramatically more difficult, so I consider our real estate company list more of an “introduction list” than a “recommended list.” I have invested myself with many of these companies, but usually only with a single deal or two over a few years. Just finding their name on this site doesn't excuse you from having to do your own due diligence.

At any rate, CityVest has not been on that list for over a year and won't be back for various reasons, but mostly just based on feedback from WCIers about communication issues. Not sure which fund ffuser1 invested in, but the sole CityVest access fund I invested in has performed pretty much exactly as I expected. If you expect to be able to file your taxes by April 15th while investing in private real estate you're simply uninformed. It's not going to happen. You'll be filing an extension every year and likely filing in multiple states every year. It's just part of the deal. I just got one of my K-1s this week, and no, it wasn't the CityVest one.

[HM7]

At this point, I'm just hoping CityVest isn't a scheme. I invested in the Trion access fund. It’s too early to know how the distributions will be, but some of the comments in this Forum are concerning.

WCI, it’s true that you don’t recommend any investments; however, just speaking for myself, I felt more confident knowing that you had invested in them before, and they were advertised on your website.
But it's totally fine because no one bats a 1,000. With enough time, there are going to be some duds. I Agree that we are all responsible for our due diligence.

[MaxPower]

Since almost none of these syndications have a meaningful track record, I think you have to be willing to lose everything you invest with them. And this is why, amongst several other reasons, I haven’t been willing to plunk down $100k to get into the Origin or DLP funds. How much due diligence can you really do on a company that’s been around for 2-4 years?

[afan]

That is the critical point. If you have the expertise to really evaluate a new company, then you are ready to be originating deals yourself, rather than buying into one created by others. You need to have very good reasons to want to invest in a new venture like this. There are plenty of other investment options with clearer risk profiles.

[The White Coat Investor]

Since almost none of these syndications have a meaningful track record, I think you have to be willing to lose everything you invest with them. And this is why, amongst several other reasons, I haven’t been willing to plunk down $100k to get into the Origin or DLP funds. How much due diligence can you really do on a company that’s been around for 2-4 years?

Both of those companies have been around longer than 2-4 years. I wish I had some 30 year old companies to recommend to you, but they either don't exist or aren't looking very hard for new investors. So a company that has been around 7-15 years is like a grandfather in this space.

Origin has been around for 10 years. DLP has been around 8-15 years, depending on when you start counting. I've invested with both. Both have bought advertising here at various points over the years.

[The White Coat Investor]

That is the critical point. If you have the expertise to really evaluate a new company, then you are ready to be originating deals yourself, rather than buying into one created by others. You need to have very good reasons to want to invest in a new venture like this. There are plenty of other investment options with clearer risk profiles.

You might be ready, but not interested. I actually think you're far more than ready at that point. I don't think you need to be able to run a syndication yourself in order to profitably invest in them, especially if you go the fund route.

But I do agree these are all optional investments. You certainly don't need any of them to reach reasonable financial goals.

[MaxPower]

Both of those companies have been around longer than 2-4 years. I wish I had some 30 year old companies to recommend to you, but they either don't exist or aren't looking very hard for new investors. So a company that has been around 7-15 years is like a grandfather in this space.

Origin has been around for 10 years. DLP has been around 8-15 years, depending on when you start counting. I've invested with both. Both have bought advertising here at various points over the years.

Sorry, it was ambiguous when I mentioned the 2-4 years. I wasn’t specifically referring to Origin and DLP only being around that long, just some of these other syndicators in general. But one could also argue that Origin and DLP haven’t been doing some of their current offerings for 10-15 years since the legislation to allow some of the things they’re doing for more investors isn’t that old.

[Tim]

Both of those companies have been around longer than 2-4 years. I wish I had some 30 year old companies to recommend to you, but they either don't exist or aren't looking very hard for new investors. So a company that has been around 7-15 years is like a grandfather in this space.

Origin has been around for 10 years. DLP has been around 8-15 years, depending on when you start counting. I've invested with both. Both have bought advertising here at various points over the years.

Raising capital for real estate funds has been around for a long time. This was basically an "institutional" investor focus. It is complex and required "big fish". The ability to use the internet and target smaller pockets of private investors is what cause the lack of tenure. Deep pockets still exist and get different options.

https://sraco.com/

Been around since 1982. This in not what would be suitable for an individual for diversification purposes.

[SteffanW]

I think the mistake to be learned from here is that it can be a huge risk to invest through a 3rd party. You can typically just invest through the Syndicator / General Partner directly. For example I could have invested directly with New Era for the NEMI II Fund. There is a slight advantage to investing with CitiyVest according to the terms assuming the fund performs well, however, I am depending on not one but TWO organizations to perform as expected in order for me to get my distributions. That factor is a huge increase in risk that is NOT worth taking unless both the Syndicator / General Partner AND the 3rd party administrator are known to be extremely reputable. For example, I know the 506 group has a great history of success getting better terms for its members.

It should be considered that NEMI II Fund will still perform and it just looks scary because we aren't getting regular distributions. Additionally, explanations coming from CityVest are sparse. Beyond that, New Era is claiming to have been giving quarterly distributions since September, of which I have only received 2, and a 5th should be coming next month.

Alan did give a brief explanation stating that "I hired a CFO to handle our distributions. We have a $420 Medical Properties distribution for you that we have tried to send twice and it failed. It may be because we switched banks to First Republic and it may have read your long account name wrong. I don’t know why it got rejected. My CFO is working with First republic to figure it out so it does not happen again." However, I responded by stating, "According to the Q1 2021 Investor Report, “NEMI FUND II made its first distribution to investors in September 2020 and has continued quarterly since." On a $50K investment my distributions received from CityVest were $239.98 on 10/19/20 (This one was delayed due to issues with Chase.) and $215.98 on 2/2/21. Based on this I'm a little confused that distributions from CityVest are said to be quarterly. I have had 2 in about a year and am now anticipating a 3rd. However, being the NEIMI FUND II distributions to CityVest have been made quarterly since September 2020, shouldn't I have had 4 distributions at this point? I would expect NEMI FUND II to be making a 5th distribution to CityVest Next month. Am I missing something?" After asking that a week ago I get nothing but crickets.....It's not looking good from that standpoint. I'm hoping I'm just missing something here. Why the heck is CityVest seemly holding money with limited explanation? Even if I got the 3rd distribution why were there only 3 out of 4? Did one of the distributions get gobbled up by fees? I really wish I had some answers.

Making matter even more concerning, the initial distribution from CityVest was delayed. Alan said this delay was due to some issue with Chase. Apparently CityVest has now changed banks due to this issue and is now working with First Republic. Now they are having the same issue with First Republic? What the heck is going on here????????????

[VagabondMD]

I have the exact same amount invested in the NEMI find with the exact same distributions, of course. I have two other investments with CityVest, Pathfinder and Trion, both of which have not distributed anything to date. So far, NEMI is the star of my CityVest portfolio.

I am also disappointed with the communication (mostly lack thereof) with CityVest. I was not expecting a lot of hand-holding, but I was expecting the operations to be smoother and to eventually see the returns on my investments. I still hope this to be the case.

[G]

I don't think it's fair to say we recommended the firm

I completely own this mistake (I'm calling it a lesson), but: "So Alan Donenfeld and I put our heads together a while ago to try to come up with a win-win-win-win deal."

https://www.whitecoatinvestor.com/cityvest-access-private-real-estate/

[G]

I have the exact same amount invested in the NEMI find with the exact same distributions, of course. I have two other investments with CityVest, Pathfinder and Trion, both of which have not distributed anything to date. So far, NEMI is the star of my CityVest portfolio.

I am also disappointed with the communication (mostly lack thereof) with CityVest. I was not expecting a lot of hand-holding, but I was expecting the operations to be smoother and to eventually see the returns on my investments. I still hope this to be the case.

Thank goodness Pathfinder was my only investment! This thread made me go back and look around. Pathfinder said in April that they would start distributions in July. Who knows?

I'm super irritated because the comments in the link in the post above Alan said: "Pathfinder will take care of every state filing through a composite file except in the states that a taxpayer normally files in. So investors will not have to file in any additional states that they normally do not file."

Talk about a greenhorn mistake on my part!

[billy]

every time I think about putting some money in RE syndications, I read stuff like this and think I'll just stick with REIT fund for my small real estate type allocation.