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  • Peak REIT fees

    I think I'm not understanding this. Peak's fees are 1.35% AUM and 1.35% acquisition fee.

    On a $25,000 investment, the AUM fee would about $337.50/yr. Straight forward enough, I guess.

    The acquisition fee on the average home of $140,000 would be $1,890. Does this get spread over the 450 investors? If so, that's $4.20/investor.

    They plan to add about 2000 homes per year. So, does that mean that $4.20 X 2000 = $8,400/yr in acquisition fees for each investor?

    That seems pretty excessive for a $25,000 investment.

    Is any of the above accurate? I hope not! If not, how would the acquisition fee calculated?

    Thanks!

  • #2
    I was interested in investing with them, but I gave up. I tried to set up a trust account and invest through their website, on multiple browsers and different sessions, and there was a glitch that kept making me start over. I emailed them for help, and they never replied. I suppose I should call them but given my first (and second) impression and my sense of fate ("it was not meant to be"), I am going to pass. I hope that it works out better for their other WCI prospects.

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    • #3
      That's unfortunate. I wonder if they are having increased interest due the coverage here and not quite ready for it.

      As to my understanding of the fees, I think I see my mistake. The acquisition fee wouldn't be spread out over all investors equally, it would spread out over all invested dollars equally. If that's the case, the fees, while still high, are more reasonable.

      If they acquire 2000 properties at $140,000 average in a year, the acquisition fee would be $3.78M. If we use $100M as the total amount invested, that is 0.0378 per invested dollar. On a $25,000 investment, the acquisition fee would $945 (25k*.0378). Add in the AUM and total fees would be 5.13% (1.35+3.78).

      I'm still not sure that's correct, but it seems more reasonable than my previous comment.

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      • #4
        Originally posted by jeffstified View Post
        That's unfortunate. I wonder if they are having increased interest due the coverage here and not quite ready for it.

        As to my understanding of the fees, I think I see my mistake. The acquisition fee wouldn't be spread out over all investors equally, it would spread out over all invested dollars equally. If that's the case, the fees, while still high, are more reasonable.

        If they acquire 2000 properties at $140,000 average in a year, the acquisition fee would be $3.78M. If we use $100M as the total amount invested, that is 0.0378 per invested dollar. On a $25,000 investment, the acquisition fee would $945 (25k*.0378). Add in the AUM and total fees would be 5.13% (1.35+3.78).

        I'm still not sure that's correct, but it seems more reasonable than my previous comment.
        I just listened to that podcast. Did anyone invest? I am finally to the point that I am carving out a bit for RE.

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