I got into a 144 bed deal near a mid-size state school in Ohio last spring, $50k check, and the projections showed year one distributions starting around month 10. We're at month 11 and I've heard nothing. Is a 12 to 18 month ramp before any cash out pretty standard for this type of deal, or did I miss something in the docs I should have caught before wiring money?
Eleven months on a 144-bed deal near a state school and silence is not automatically a red flag but it is absolutely a conversation you need to force right now, not wait out. My first student housing LP took 14 months before the first distribution hit, and even then it was a partial one because the operator had held back reserves after a rougher-than-expected first lease-up season. The deal I have in Bowling Green took until month 16 before distributions normalized to anything close to the projected run rate, and that property was 94% occupied. Ramp timelines in the projections are almost always optimistic because they assume full occupancy at pro forma rents from day one, and student housing in particular runs on a very compressed leasing calendar, so if they missed the August move-in window even slightly the math shifts hard.
What I would want to know before deciding whether to be patient or alarmed: what was their actual occupancy number at the August 2024 lease-up, the one that would feed the cash you should be seeing right now. That single number tells you almost everything. If they hit 88% or above you should be getting something, maybe small but something. If they came in under 80% on a 144-bed deal the NOI probably didn't clear the debt service after reserves and distributions get zeroed out first. Call the IR contact, ask for the most recent rent roll, and ask specifically what the debt coverage ratio looked like for Q4. A GP who won't hand over a rent roll at month 11 is a much bigger problem than a delayed distribution.
Twelve to eighteen months is real for a value-add or new lease-up, but month 11 with zero communication is the part that would have me pulling out the operating agreement tonight, not next week. I had a 96-bed deal in Bowling Green where the GP went quiet around month 9 and by the time I got a straight answer the preferred return clock had been quietly reset because of a construction overage clause I had glossed over in the waterfall section. Cost me about 14 months of dead money before the first dime. The clause was legal, it was in the docs, I just didn't slow down on it when I should have. Silence from a GP is not a ramp problem, it is a communication problem, and those two things can look identical from the outside until they very much aren't.
