Upside Avenue Comprehensive Review
(Parent: Casoro Capital)
Category: Non-accredited investor funds
Honors: Most experienced sponsors
Upside Avenue is a newer multifamily (apartment) REIT that was launched in August 2018. The target yield is 6-8% per year and IRR of 10-15%. They claim to target "recession resistant" deals, and intend to create a diversified portfolio of them.
Upside Avenue would be unremarkable if it wasn't for the extrodinarily impressive looking record of it's parent company (Casoro Capital). I personally feel we're late in the cycle, and as a conservative investor I don't even look at a multifamily deal unless the sponsor has full real estate cycle experience in the current strategy and didn't lose any investor money. (More aggressive investors will have different criteria). So for me, a top-notch sponsor can be hard to find.
So I was very pleased to see that Upside Avenue/Casoro Capital, claims to have acquired over $1 billion in multifamily real estate and done so not over one but multiple full real estate cycles. (16 deals since 2004). And they have $0 of reported losses. If true, that puts it in a rare class (and not just in the small universe of nonaccredited funds, but also the wider universe of accredited).
Upside Avenue also has full bankruptcy protection (set up as bankruptcy remote and a separate administrator from the company). That differentiates it from many other non-accredited offerings, and provides some nice peace of mind for the investor.
On the downside, Upside Avenue fees are almost universally on the high or highest side versus competitors. So this is not the cheapest fund on the block. I suspect some will be willing to pay top dollar for the other positives of the fund.
Also, target leverage is a too high for my tastes (70 to 80% versus 65% is what I like to see at this stage of the cycle). But a more aggressive investor may feel very differently and not have an issue with it.
Currently the fund has no assets (unseeded), which may be an issue for some investors. These investors may want to wait a couple of months to see which properties are put in, and make sure they meet expectations.
The minimum investment is $2000, which is a bit above the $1000 average for nonaccredited funds. So those who are a little squeezed for cash may have an issue with this.
Advantages: Multiple cycle experience in multifamily with no investor money lost, bankruptcy protection.
Disadvantages: High fees, high leverage, no assets yet.
Accolades: Most experienced sponsors.
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Personal opinion only: All info is my personal opinion only as an investor. I am not an attorney, nor an accountant, nor your financial advisor. Always do your own due diligence and consult with your own licensed professionals before making any investment decision. Information is believed to be correct but may have errors, so use at your own risk. If you find an error, please let me know.
Ratings are general: In my opinion, every investor comes from a different risk tolerance and financial situation, so there's no such thing as a single investment or platform that's great for everyone. There are many deals that aggressive investors love, which I won't touch, and vice versa. And every investor has their own way of doing due diligence. I believe there's no one right way to do it.
So, the site ratings are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). And even though I have my own personal, conservative, due diligence method (and talk about how the site's deals measure up in the "deep dive section"), I don't use my personal criteria as a factor in the ratings. So for example, a high ranking/rating doesn't mean that I would personally invest in a site (and vice versa). Click here to see what's in my own portfolio.
About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
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