Ran a live redemption test with 12k before I sent the rest

So you proved the pipes work when nobody else is turning on a tap. That's still worth 56 dollars to know, I'm not knocking it. But the quarter you want data on is the one where the sponsor's other investors all need cash in the same eight weeks, and by definition you can't test that one on purpose. Did you look at what the same plan did in the worst quarter it has on record?

I care more about who's collecting the rent than who's processing your redemption. Did you get down to the property list? A NAV REIT that's mostly newer industrial and residential behaves differently from one carrying a couple of half-empty office towers at appraised value, and the redemption plumbing looks identical in both cases.

kestrel your $56 is the smallest number in this post. 1.25% on 60k is 750 a year, every year, and that's before whatever performance participation the sponsor takes. I'd rather see the total annual drag than the exit friction. Do you have the all-in number written down anywhere?

What's a repurchase plan? I've read the phrase three times in this thread and I'm guessing it means the fund buying your shares back, but is it a promise or a maybe?

plumb, it's a maybe. That's the whole thing. The board can prorate or suspend it, and the 5% cap kestrel mentioned is across every holder, so in a heavy quarter you get a slice of what you asked for and go back in the queue with no priority next time. Nobody owes you a full fill.

Honestly the illiquidity part doesn't bother me. My rentals out in the county take four months to sell on a good day. What bothers me is a NAV that sits at 10.30 for five quarters straight while every comparable public REIT trades down 20%. One of those two numbers is wrong and I can't tell which.

kestrel, when you say it priced at quarter-end NAV, is that always how it works? I've been reading one where the repurchase price is the transaction-day NAV of the month the request is processed, which sounds like the same thing but might not be. And is the early repurchase deduction taken off that price or off what you paid?

bramble that helps. So the redemption is discretionary and the fee isn't. Got it.

Were you taking the distributions in cash or reinvesting? I ask because I want the income, and if you reinvest, I assume each new batch of shares starts its own holding clock for that early repurchase deduction. Which would mean the newest shares are always the expensive ones to sell.

I keep coming back to the simple question. You accepted a 1.4% price move you didn't control plus a nine day wait, and you pay 1.25% a year, and you get a value that only updates monthly. What did you actually buy that a plain listed REIT index doesn't give you for a tenth of the fee and same-day sales?

verity, price stability that isn't fake, arguably. The listed version marks to whatever the market feels that week. Whether that's a feature depends on whether you'd have panic sold. kestrel, which documents did you actually read? I would have spent a year on this and still not sent the 12k.

The deadline detail is the part I'd frame and hang up. Every one of my problems at small scale has been a date I didn't know existed. Second month of the quarter, four days to spare. That's the post.

Sorry, basic one, what is NAV?

rigging, net asset value. The sponsor values the properties, subtracts the debt and what it owes, divides by shares outstanding. That's the price you buy and sell at, and it comes from appraisals rather than a market of buyers, which is exactly why hollow is suspicious of it.

kestrel, this reads a lot like how I think about land. No daily quote, no way to sell in a week, and I've made peace with that. Difference is nobody sets my land's value for me each month.

If you're holding ten years, does the exit test matter much? I'd spend that effort on the property mix and the debt maturities. Though I suppose the point is that a ten year plan turns into a three year plan more often than anyone admits.

How do you screen the sponsor? I know how to screen a tenant, I want pay history and references and a look at how they left the last place. Is there an equivalent here, like how a sponsor treated redeemers the last time things got tight?

Can someone say plainly what prorated means in this context? I read it as everyone gets a haircut but I'd rather be sure.

juniper, requests come in for 8% of NAV, cap is 5%, so everyone gets roughly five eighths of what they asked for and the rest is unfilled. You resubmit next quarter, at whatever the NAV is then.

kestrel, I'd want to know how much of the portfolio is ground leased or in markets where the entitlement risk sits with somebody else. The appraisal picks up income long before it picks up a zoning fight.

Six units teaches me something every month and costs me most Saturdays. What you paid $56 to learn, I'd have paid more for. My honest concern with the vehicle isn't the fee, it's that when it goes wrong I have no lever to pull. On my buildings I can raise rents or fire a manager.

Questions, since I'm slow at this. Why 25k in T-bills specifically, was that a number or a feeling? Did the platform put anything in writing about the deadline or did you find it in the plan yourself? And if the fill had come back at 60% instead of 100%, would you have put the 48k in anyway?

Ran my own version of the drag while this thread sat. 1.25% management, plus a stockholder servicing fee on some classes that I'd want to see in the fee table, plus performance participation on gains that are measured off appraisals. On 60k held five years the management fee alone is around 4k of the 60k, assuming flat NAV. kestrel's exit cost is a rounding error next to that. The exit test was still the right test, it just isn't where the money goes.

I've been using something like this as the place cash sits between deals and this thread is making me nervous about that. If a deal shows up in month two of a quarter, I'm looking at a submission deadline, a quarter end, a nine day wait, and a possible proration before I see the money. That's not a parking spot, that's a commitment. kestrel your line about no dollar in there with a closing date attached is the part I needed to read.