Touzi Capital - is this worthwhile?

[BrianT]

A friend was asking me for advice about investing with this company in order to get into larger RE assets:

https://www.touzicapital.com/

Unfortunately I didn't have anything positive to say about it because I've seen more sad endings than happy endings for investors that give other people their money to earn money. But I'd like to get a different set of eyes. I hope you all don't mind giving me your thoughts on this.

[secondcor521]

I like the potential idea of having diversification in a RE portfolio.  But I would never do it because I wouldn't be in control of the investment - if I'm only a 10% owner of a property through this Touzi group then I'm just along for the ride.  If I want to sell, too bad, but if they want to sell, I guess we're selling, even if it's not convenient for me tax-wise on the timing.

One thing I don't like about their website is they don't explain how they make money.  I'd prefer they explain that upfront, even if it's generalities like "we take an asset management fee on an annual basis" or "we do the property management and fund ourselves that way".

I'm not an RE investor, but I don't see why bigger RE assets are necessarily better investments.  It seems to me that they might be more complicated, because bigger more expensive properties might have factors such as employees, tenants, government regulation, etc.  Compared to that, a SFH or a duplex or something seems much more straightforward and easier to analyze the financials on, and thus lower risk.  But I'll defer to actual RE investors on this.

[BrianT]

I like the potential idea of having diversification in a RE portfolio.  But I would never do it because I wouldn't be in control of the investment - if I'm only a 10% owner of a property through this Touzi group then I'm just along for the ride.  If I want to sell, too bad, but if they want to sell, I guess we're selling, even if it's not convenient for me tax-wise on the timing.

One thing I don't like about their website is they don't explain how they make money.  I'd prefer they explain that upfront, even if it's generalities like "we take an asset management fee on an annual basis" or "we do the property management and fund ourselves that way".

I'm not an RE investor, but I don't see why bigger RE assets are necessarily better investments.  It seems to me that they might be more complicated, because bigger more expensive properties might have factors such as employees, tenants, government regulation, etc.  Compared to that, a SFH or a duplex or something seems much more straightforward and easier to analyze the financials on, and thus lower risk.  But I'll defer to actual RE investors on this.

Hello! Thanks for taking time to respond. A few points I wanted to comment on:

• The fact that they did not explain how they make money was a sticking point for me. I had also explained that to my friend. They come off as good citizens that just want to help the average joe out, but we know that part is just a sales pitch. When they don't explain how they make money, it seems like they are just brokers of deals, whether the deal is good or not. Who's really taking the risk here?
• Your point about justifying why a expensive RE investment is necessarily better than a simple one really got me thinking. It forced me to take a step back. Much appreciation for bringing up this point.

Overall, I felt very skeptical because some important pieces of information (which is likely our expenses) was omitted.

[JoeV914]

I like the potential idea of having diversification in a RE portfolio.  But I would never do it because I wouldn't be in control of the investment - if I'm only a 10% owner of a property through this Touzi group then I'm just along for the ride.  If I want to sell, too bad, but if they want to sell, I guess we're selling, even if it's not convenient for me tax-wise on the timing.

One thing I don't like about their website is they don't explain how they make money.  I'd prefer they explain that upfront, even if it's generalities like "we take an asset management fee on an annual basis" or "we do the property management and fund ourselves that way".

I'm not an RE investor, but I don't see why bigger RE assets are necessarily better investments.  It seems to me that they might be more complicated, because bigger more expensive properties might have factors such as employees, tenants, government regulation, etc.  Compared to that, a SFH or a duplex or something seems much more straightforward and easier to analyze the financials on, and thus lower risk.  But I'll defer to actual RE investors on this.

Hello! Thanks for taking time to respond. A few points I wanted to comment on:

• The fact that they did not explain how they make money was a sticking point for me. I had also explained that to my friend. They come off as good citizens that just want to help the average joe out, but we know that part is just a sales pitch. When they don't explain how they make money, it seems like they are just brokers of deals, whether the deal is good or not. Who's really taking the risk here?
• Your point about justifying why a expensive RE investment is necessarily better than a simple one really got me thinking. It forced me to take a step back. Much appreciation for bringing up this point.

Overall, I felt very skeptical because some important pieces of information (which is likely our expenses) was omitted.

I've scheduled a call with Touzi Capital and am looking at investing in an upcoming deal. They're very straightforward when asked this exact question on the introductory call.

Mix of acquisition fees, ongoing management fees, and equity and cash flow which varies from deal to deal. Pretty standard for syndications. Just ask, I'm sure they'll freely give that info away.

[bacchi]

I like the potential idea of having diversification in a RE portfolio.  But I would never do it because I wouldn't be in control of the investment - if I'm only a 10% owner of a property through this Touzi group then I'm just along for the ride.  If I want to sell, too bad, but if they want to sell, I guess we're selling, even if it's not convenient for me tax-wise on the timing.

One thing I don't like about their website is they don't explain how they make money.  I'd prefer they explain that upfront, even if it's generalities like "we take an asset management fee on an annual basis" or "we do the property management and fund ourselves that way".

I'm not an RE investor, but I don't see why bigger RE assets are necessarily better investments.  It seems to me that they might be more complicated, because bigger more expensive properties might have factors such as employees, tenants, government regulation, etc.  Compared to that, a SFH or a duplex or something seems much more straightforward and easier to analyze the financials on, and thus lower risk.  But I'll defer to actual RE investors on this.

Hello! Thanks for taking time to respond. A few points I wanted to comment on:

• The fact that they did not explain how they make money was a sticking point for me. I had also explained that to my friend. They come off as good citizens that just want to help the average joe out, but we know that part is just a sales pitch. When they don't explain how they make money, it seems like they are just brokers of deals, whether the deal is good or not. Who's really taking the risk here?
• Your point about justifying why a expensive RE investment is necessarily better than a simple one really got me thinking. It forced me to take a step back. Much appreciation for bringing up this point.

Overall, I felt very skeptical because some important pieces of information (which is likely our expenses) was omitted.

I've scheduled a call with Touzi Capital and am looking at investing in an upcoming deal. They're very straightforward when asked this exact question on the introductory call.

Mix of acquisition fees, ongoing management fees, and equity and cash flow which varies from deal to deal. Pretty standard for syndications. Just ask, I'm sure they'll freely give that info away.

Wow, a ringing endorsement for an unknown investment site from a first-time poster! Totally trustworthy.

[JoeV914]

I like the potential idea of having diversification in a RE portfolio.  But I would never do it because I wouldn't be in control of the investment - if I'm only a 10% owner of a property through this Touzi group then I'm just along for the ride.  If I want to sell, too bad, but if they want to sell, I guess we're selling, even if it's not convenient for me tax-wise on the timing.

One thing I don't like about their website is they don't explain how they make money.  I'd prefer they explain that upfront, even if it's generalities like "we take an asset management fee on an annual basis" or "we do the property management and fund ourselves that way".

I'm not an RE investor, but I don't see why bigger RE assets are necessarily better investments.  It seems to me that they might be more complicated, because bigger more expensive properties might have factors such as employees, tenants, government regulation, etc.  Compared to that, a SFH or a duplex or something seems much more straightforward and easier to analyze the financials on, and thus lower risk.  But I'll defer to actual RE investors on this.

Hello! Thanks for taking time to respond. A few points I wanted to comment on:

• The fact that they did not explain how they make money was a sticking point for me. I had also explained that to my friend. They come off as good citizens that just want to help the average joe out, but we know that part is just a sales pitch. When they don't explain how they make money, it seems like they are just brokers of deals, whether the deal is good or not. Who's really taking the risk here?
• Your point about justifying why a expensive RE investment is necessarily better than a simple one really got me thinking. It forced me to take a step back. Much appreciation for bringing up this point.

Overall, I felt very skeptical because some important pieces of information (which is likely our expenses) was omitted.

I've scheduled a call with Touzi Capital and am looking at investing in an upcoming deal. They're very straightforward when asked this exact question on the introductory call.

Mix of acquisition fees, ongoing management fees, and equity and cash flow which varies from deal to deal. Pretty standard for syndications. Just ask, I'm sure they'll freely give that info away.

Wow, a ringing endorsement for an unknown investment site from a first-time poster! Totally trustworthy.

Haha tbh it’s sort of challenging to open an account and post here. I haven’t invested with them or anything which explains the lack of a stronger review. I tried posting on a few other threads so far and the process of answering questions in order to post is sort of exhausting. Nice to meet you!

[waltworks]

LOL, registering for the MMM forums is so hard!

Now, listen to my take on this sketchy investment...

Syndicates are pretty much always a ripoff. No free lunch. Caveat emptor. The money in RE is made by the person finding/doing the deal. If you want passive RE exposure just buy some REITs.

-W

[JoeV914]

LOL, registering for the MMM forums is so hard!

Now, listen to my take on this sketchy investment...

Syndicates are pretty much always a ripoff. No free lunch. Caveat emptor. The money in RE is made by the person finding/doing the deal. If you want passive RE exposure just buy some REITs.

-W

Apologies, didn't mean for it to come across as a recommendation. Thanks for your advice on REIT's.

[joleran]

Haha tbh it’s sort of challenging to open an account and post here. I haven’t invested with them or anything which explains the lack of a stronger review. I tried posting on a few other threads so far and the process of answering questions in order to post is sort of exhausting. Nice to meet you!

Wow.  Assuming you aren't a shill (and it really looks like you are), if you can't handle registering for an internet forum you might consider that managing your own investments is beyond your current capabilities.

[MustacheAndaHalf]

What I see is a poster with 7 posts total (as of now), 3 of which are in this thread, supporting the questionable investment.  I'd like to point out while saying this firm was very open to answer questions... they didn't note any of those answers here.

From what I've read on the forum, there's two other approaches to real estate that are more popular.  Some people buy rental properties and become landlords (we even have another forum about it).  And others selectively pick individual REITs based on fundamental characteristics.

Personally, I'd use a "REIT tilt", mostly investing in index funds.  And a fraction of that investment could be a REIT index, like Vanguard's VNQ.  That way you get exposure to the whole market, and the whole REIT market (which has historically had a lower correlation to the stock market than most other investments - including international).

[JAYSLOL]

I don’t really understand why anyone would want to invest with them, REITs seem like a better, lower risk option for those that want RE exposure and don’t want to buy property themselves. 

[BrianT]

I'm glad I started this post. I don't want anyone to be ripped off from Touzi Capital (if this is the case, which seems likely).

[joleran]

Have to say I’m not sure how you’re making the leap to say I recommend or supported them. IF I were to, I can share updates here. Really didn’t think an innocuous comment would be so misconstrued. I’m sorry to the other guys or girls who read that as a recommendation. To be fair to others in the industry, I’ve also talked to SemiRetiredMD and Blue lake Capital, too and those convos were positive as well. Again, haven’t invested with them either so I can’t make any recommendations.

I do however appreciate the info on REITs. I definitely don’t want to be a landlord so buying my own property isn’t of interest. From my understanding REITs don’t offer the same tax advantages of syndications in a direct deal. Is that accurate? I totally understand the lower risk profile as well as the liquidity benefits of REITs

I appreciate your sticking around as long as it's in good faith.  An unfortunately common tactic for places seeking investments is to seed new posters into popular forums extolling their virtues, or less obviously just stirring up conversation to get people to check it out.  One thing to note when you are talking to these places is that you are talking to a sales person - if they don't make you feel good about it they are really bad at their job.

Yes, publicly traded REITs don't tend to give you a nice K-1 with depreciation giving you the nice tax advantages, but they also don't expose you to even the limited risk of being a syndicate member.  Also, consider that being a landlord directly can be as hands-off as investing in a syndicate if you hire a good property manager, but with much more control.

[BrianT]

Have to say I’m not sure how you’re making the leap to say I recommend or supported them. IF I were to, I can share updates here. Really didn’t think an innocuous comment would be so misconstrued. I’m sorry to the other guys or girls who read that as a recommendation. To be fair to others in the industry, I’ve also talked to SemiRetiredMD and Blue lake Capital, too and those convos were positive as well. Again, haven’t invested with them either so I can’t make any recommendations.

I do however appreciate the info on REITs. I definitely don’t want to be a landlord so buying my own property isn’t of interest. From my understanding REITs don’t offer the same tax advantages of syndications in a direct deal. Is that accurate? I totally understand the lower risk profile as well as the liquidity benefits of REITs

Looks like JoeV914 deleted his post....

I appreciate your sticking around as long as it's in good faith.  An unfortunately common tactic for places seeking investments is to seed new posters into popular forums extolling their virtues, or less obviously just stirring up conversation to get people to check it out.  One thing to note when you are talking to these places is that you are talking to a sales person - if they don't make you feel good about it they are really bad at their job.

Yes, publicly traded REITs don't tend to give you a nice K-1 with depreciation giving you the nice tax advantages, but they also don't expose you to even the limited risk of being a syndicate member.  Also, consider that being a landlord directly can be as hands-off as investing in a syndicate if you hire a good property manager, but with much more control.

[JoeV914]

Have to say I’m not sure how you’re making the leap to say I recommend or supported them. IF I were to, I can share updates here. Really didn’t think an innocuous comment would be so misconstrued. I’m sorry to the other guys or girls who read that as a recommendation. To be fair to others in the industry, I’ve also talked to SemiRetiredMD and Blue lake Capital, too and those convos were positive as well. Again, haven’t invested with them either so I can’t make any recommendations.

I do however appreciate the info on REITs. I definitely don’t want to be a landlord so buying my own property isn’t of interest. From my understanding REITs don’t offer the same tax advantages of syndications in a direct deal. Is that accurate? I totally understand the lower risk profile as well as the liquidity benefits of REITs

I appreciate your sticking around as long as it's in good faith.  An unfortunately common tactic for places seeking investments is to seed new posters into popular forums extolling their virtues, or less obviously just stirring up conversation to get people to check it out.  One thing to note when you are talking to these places is that you are talking to a sales person - if they don't make you feel good about it they are really bad at their job.

Yes, publicly traded REITs don't tend to give you a nice K-1 with depreciation giving you the nice tax advantages, but they also don't expose you to even the limited risk of being a syndicate member.  Also, consider that being a landlord directly can be as hands-off as investing in a syndicate if you hire a good property manager, but with much more control.

Thanks for sharing. Yeah I figured they sort of had to be good at answering that question since it’s admittedly not transparent up front. Maybe they should make that more clear from the start.

I wouldn’t know where to start with finding a good property manager, this is all pretty new to me.

REITs seem as hands off as it gets. Maybe I’ll start there and work my way into other areas of RE down the road.

Appreciate the info. If anyone has other suggestions I’m all for it.

[bacchi]

If you look at VNQ holdings, the majority of it is cell tower leases.

[MustacheAndaHalf]

bacchi - Here's the top 10 assets of Vanguard Real Estate ETF:

Vanguard Real Estate II Index Fund   12.10%
American Tower Corp.   8.50%
Prologis Inc.   5.80%
Equinix Inc.   5.40%
Crown Castle International Corp.   5.20%
Digital Realty Trust Inc.   3.00%
SBA Communications Corp.   2.60%
Public Storage   2.50%
Welltower Inc.   1.80%
Weyerhaeuser Co.   1.70%

American Tower (8.5%), Crown Castle (5.2%) and SBA Communications (2.6%) profit off cell tower leases.  Together that's 16%, which is nowhere near half even if you exclude the first holding (another Vanguard fund).

Are you lumping Equinix and Digital Realty Trust into that group?  They lease data centers, which are huge air conditioned buildings holding tons of computers with a high speed connection to the outside world.

[bacchi]

bacchi - Here's the top 10 assets of Vanguard Real Estate ETF:

Vanguard Real Estate II Index Fund   12.10%
American Tower Corp.   8.50%
Prologis Inc.   5.80%
Equinix Inc.   5.40%
Crown Castle International Corp.   5.20%
Digital Realty Trust Inc.   3.00%
SBA Communications Corp.   2.60%
Public Storage   2.50%
Welltower Inc.   1.80%
Weyerhaeuser Co.   1.70%

American Tower (8.5%), Crown Castle (5.2%) and SBA Communications (2.6%) profit off cell tower leases.  Together that's 16%, which is nowhere near half even if you exclude the first holding (another Vanguard fund).

Are you lumping Equinix and Digital Realty Trust into that group?  They lease data centers, which are huge air conditioned buildings holding tons of computers with a high speed connection to the outside world.

You're right. It's less than 50%.