I passed on the capital call and watched 1.9 percent turn into 0.7

Put $30k into an office deal through an online platform in my second year of doing anything at all. 110,000 sf, two buildings, 81 percent leased at acquisition, plan was to renew two mid-size tenants and refinance in year three. My check bought about 1.9 percent of the common equity.

Month 19 the sponsor sent a capital call. One tenant at 14,000 sf gave notice, the reserve had been drawn down on a chiller replacement, and the lender's cash management kicked in when the debt service coverage fell below the trigger. They needed $2.6M. My share was $47k.

I didn't have $47k. I had maybe $12k in cash and a partial contribution wasn't accepted.

The operating agreement had a dilution provision. Non-contributing members get diluted at a punitive multiple, in this case the contributing members got credited at 2x their new money for purposes of recalculating percentages. So my 1.9 percent went to roughly 0.7. I didn't lose the position outright and I still hold it, but the deal is now sized so that even a decent exit returns me something under what I put in.

Total cost so far: $30k in, $2,100 of distributions received in the first four quarters, nothing since, and a stake worth about a third of what it was.

What I'd do differently, plainly. I'd read the dilution clause before wiring, not after the call letter. And I'd hold back cash equal to at least half the check on any deal with a floating rate loan and a coverage trigger, because the money you need in month 19 is the money you already spent in month one. The clause wasn't hidden. I just didn't know it was the clause that mattered.