Investing

Investment with greybrook capital

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Member
Sep 2, 2005
418 posts
98 upvotes
Toronto
ColinErnst wrote: I have invested with GreyBrook in 2 of their Land Development offers: Fort Lauderdale and Oshawa. So far everything seems great, but they only recently closed the offering in Dec 2016.
Good for you. Fort Lauderdale is interesting because its returns are treated as capital gains for income tax purposes.
Last edited by jdt on Jan 29th, 2017 10:13 am, edited 1 time in total.
Newbie
Jan 28, 2017
3 posts
Vancouver, BC
I am investing with RRSP's so it won't matter to me.
Newbie
Jan 29, 2017
1 posts
1 upvote
Hello, I invested in the Lakeshore project about 30 months ago. It was a multiphase 4 tower condo development. It actually paid out early after only 27 months, The property they bought with the developer sold for an incredible premium to a Chinese Real Estate Syndicate paying investors a whopping 90% return. This translated to close to 30% annualized. Greybrook invests in only high value projects with the top developers. I like what they do so much that I am now a Senior Associate with them. Every project they launch sells out within a few days due their incredible historical returns.
So personally, I think Greybrook is an incredible company to invest with.
Jr. Member
Nov 3, 2010
101 posts
BrunoW022462 wrote: Hello, I invested in the Lakeshore project about 30 months ago. It was a multiphase 4 tower condo development. It actually paid out early after only 27 months, The property they bought with the developer sold for an incredible premium to a Chinese Real Estate Syndicate paying investors a whopping 90% return. This translated to close to 30% annualized. Greybrook invests in only high value projects with the top developers. I like what they do so much that I am now a Senior Associate with them. Every project they launch sells out within a few days due their incredible historical returns.
So personally, I think Greybrook is an incredible company to invest with.
Thank you,
Jr. Member
Mar 2, 2015
101 posts
28 upvotes
Toronto, ON
wesboag wrote: Second to the ridiculous BS you just spewed, please direct me to a bank or any legitimate financial institution that will give me 8% GIC's. I'm sure I have "enough" to invest. My clients and I would love it. When do you plan on waking from this dream of yours?
Well Warren Buffett got 10% Preferreds from Goldman Sachs for $5 billion dollars. I think they qualify as a legitimate financial institution. Also they got a big premium when GS bought back the "GICs" (Preferreds).

"Berkshire Hathaway will receive perpetual preferred shares in Goldman, which will pay a 10 annual percent dividend, or $500 million a year. Those dividends take precedence over other payments to common shareholders. Goldman has the right to buy back the shares at any time for a premium of 10 percent."
"Back in September of 2008, at the height of the credit crisis, Berkshire essentially loaned Goldman $5 billion at an interest rate of 10 percent a year. (That money was repaid in 2011.)"
Newbie
Feb 10, 2017
1 posts
I can vouch for BrunoWO22462 and the Lake shore project. I am invested in three Greybrook projects. The Lake shore project closed before I had a chance to participate. The numbers can be verified just by googling Greybrook Lake Shore. Lucky you Bruno! You have to be an accredited investor and the Greybrook investors have title on the land. The projects don't get built until the developments are pre-sold. Wish I had started with them earlier.
Member
Sep 2, 2005
418 posts
98 upvotes
Toronto
ColinErnst wrote: Hey,

I have invested with GreyBrook in 2 of their Land Development offers: Fort Lauderdale and Oshawa. So far everything seems great, but they only recently closed the offering in Dec 2016.
How are those two projects going? I got a semi-annual update for two of the projects I'm involved in, and while they still appear to be progressing, they've fallen significantly behind the original schedule.
Newbie
Jan 28, 2017
3 posts
Vancouver, BC
Hey,

I'm now invested in 4 deals with Greybrook and, based on the unitholder reports, they all seem to be on schedule. I had the opportunity to check out the Fort Lauderdale project in person this spring break and work was well underway.

Which projects are you invested in that appear to be behind ?
Member
Sep 2, 2005
418 posts
98 upvotes
Toronto
ColinErnst wrote: I'm now invested in 4 deals with Greybrook and, based on the unitholder reports, they all seem to be on schedule. I had the opportunity to check out the Fort Lauderdale project in person this spring break and work was well underway.

Which projects are you invested in that appear to be behind ?
It's nice that you've been able to see Fort Lauderdale for yourself.

Looks like I was unlucky with my choice of projects.

According to the latest unit holders reports I received, Cambridge is behind by two years, and Oakville by one year
Deal Addict
Jul 27, 2017
2180 posts
950 upvotes
ColinErnst wrote: Hey,

I'm now invested in 4 deals with Greybrook and, based on the unitholder reports, they all seem to be on schedule. I had the opportunity to check out the Fort Lauderdale project in person this spring break and work was well underway.

Which projects are you invested in that appear to be behind ?
simple question which I trust you wont mind responding to..

are you pleased with what Greybrook has has provided for you in term of returns on your investment?

how long have you been invested?

in the time time that you have been with them what has been the yearly percentage returns?

are the returns interest payments or dividends & how often do you get your payments?
Deal Addict
Apr 8, 2015
2104 posts
2931 upvotes
Roxboro, QC
jdt wrote: It's nice that you've been able to see Fort Lauderdale for yourself.

Looks like I was unlucky with my choice of projects.

According to the latest unit holders reports I received, Cambridge is behind by two years, and Oakville by one year
Any updates?
Newbie
Apr 27, 2012
5 posts
8 upvotes
ETOBICOKE
I generally just lurk on RFD and, well, forgot I even had this account but came across this thread while researching my own investments with Greybrook. I see that there's a lack of understanding about how they work, so let me give you a simplistic overview.

Firstly, here's me; I'm an 'accredited' investor with Greybrook which means I have significant capital and they won't be in shit if they lose my money. There is a second class of investor which is called "eligible" and these are folks that have lower net worth and are shielded (prevented from investing) in some of the higher risk projects, as well as limits on how much they can invest with Greybrook. I'm invested in 8 different projects (well into the 6-figures) and have been with them since 2017. It has not been all roses, but before we get to that, lets talk about what this actually is.

There are a few different structures, but they are all similar and you must understand that you are NOT investing in Greybrook. Each project is made up of 3 (or 4) parties.
1. Greybrook (who does the managing of the project, and legal work)
2. The builder (who does the building.... and is responsible for the building loan, the money to pay for materials and building costs)
3. The investors (Private equity in the form of a limited liability partner... we provide the money for the property.)
At the end of the project, the investments, loans and so-on are paid back. The remaining profit is split according to division set out at the start. Usually 10/45/45 or 10/40/50, but sometimes other ways like 5/40/55 etc. Each project is different.

The projects are usually similar to these types...
a. Land development... where they buy an empty piece of property, develop a plan (all of the environmental assessments and work to get it approved is expensive and time consuming). At the end, they sell the land and the plan to a developer who will build.
b1. Development projects... Where they buy land & plan, or incorporate a. above, and take the project from empty land to a neighbourhood or condo. After they sell the units, they have profit to distribute.
b2. Development projects... Another type, similar to the above, is where they build an apartment building or rental neighbourhood, fill it full of tenants and then sell the whole thing to an institutional buyer (one large company)
c. Refurbish old buildings... Basically take an old apartment, boot everyone out, improve the insides, and then re-tenant it... eventually selling the whole thing to an institutional buyer.

As you can see, they are dealing with full neighbourhoods, full condos/apartments etc. so these projects are long... sometimes only 2 years, but usually 3-7 years long. That means... if it's good, it can be very good. If it's bad, it can be very bad. In general, GB usually targets projects that can earn 20%/year.

Now the reality... in the Toronto housing boom leading up to 2018, they made a killing. I saw projects earn 53% & 72% **PER YEAR**. This, of course, was because of the boom and those guys made a killing. Unfortunately, changes in politics occurred... they crushed that housing boom, got rid of the OMB and so-on which massively changed some of the projections. I have one project that *should* have been similar to one of the 53% projects mentioned above, but due to the unfortunate timing of being in 2018... it has been delayed 3+ times now, and will end up earning 0%/year on a 4-year project.

Of my 8 projects,
- 4 are delayed more than 1 year.
- 1 is delayed by one quarter.
- 3 are on schedule... but they are still 5 years out so I expect that they, too, will be delayed.
Every time a project is delayed, the chances are that the profit remains the same so your effective return is lowered.

To sum it up, Private Equity Lending is a high risk investment opportunity; If you don't understand it, and you don't have the funds, then this is not for you. If you are able to invest money for long periods of time and stomach the potential losses, then it can be very profitable.

The nitty gritty...
- They have projects that can be held in a TFSA, RRSP, or other such registered plans.
- minimum investment in a particular project is $25,000 but you can then increase that in increments of $100.
- You are a limited liability partner and the money you invest is buying pieces of that partnership... you cannot withdraw it so your funds are locked in and you don't get a say in the management.

With regards to people's questions about "Why can't they go to the bank to get a loan"... well... they do. Sort of. Banks have NO interest in accepting risky investments. So what they do is say, "If you buy the land, and get pre-sales of 30%(number varies), then we will supply you with a loan to build the building." But how can you buy the land? But how can you get pre-sales without a loan? And that's where we come in. We supply the funding, greybrook provides the planning, then the builders are then able to go and get a loan - together, the project comes together and everyone profits.

If you're STILL having trouble understanding this on a large scale, think of it at a small scale. It's basically like Joe. Joe wants to buy a piece of property in cottage country, have Jane build a cabin on it, and then sell it to some torontonian to make a big profit. But Joe doesn't have the money to buy the land. The bank won't give him a mortgage on a cottage that isn't built. So what does he do? He says, "Hey Nomadic, want to partner with me and Jane?" I say, "Sure. Here's the cash to buy the land. You look after the rest." Joe takes the money, buys the land. He can then has Jane take out a building loan to build the thing. And Joe looks after selling the cottage, all the legal paper work and project manages the build. At the end, Joe sells the cabin and pays off the loans and returns my money. Any money left over, Joe takes 10%, Jane takes 45% and I take 45%. It's as simple as that... but with a lot bigger funds and buildings.

I'm not advocating this for anyone, but everyone should be aware of this type of investment. Private equity lending is common but is not usually in the reach of most people.
Member
Sep 2, 2005
418 posts
98 upvotes
Toronto
NomadicCanuck wrote: I see that there's a lack of understanding about how they work, so let me give you a simplistic overview.
That was a pretty good Greybrook overview you wrote up, I'm sure it'll help a bunch of people.

What is the name of the project that is set to return 0%?
I don't think any of the projects I'm involved in are set to return 0%, unless I'm misreading the unit holder reports Disappointed But Relieved Face
Newbie
Apr 27, 2012
5 posts
8 upvotes
ETOBICOKE
jdt wrote: What is the name of the project that is set to return 0%?
I don't think any of the projects I'm involved in are set to return 0%, unless I'm misreading the unit holder reports Disappointed But Relieved Face
Hi JDT, I just saw your post now. One year later.
At any rate, the project is Markham V. It is projected as a loss, but they are doing everything they can to return our capital, including some special programs. It is disappointing to have a losing investment, but the length they are going to make this "whole" for us is promising. The real problem with this project was that it was released in 2017, right when the Government hit us with measures to decrease the housing bubble. It hurt.
Newbie
Apr 27, 2012
5 posts
8 upvotes
ETOBICOKE
So here I am, one year later. For those following this thread or seeing it new for the first time, I'll give you a quick update.

I'm now involved in 10 projects.
1 is projected to be a loss, or barely break-even in 2021.
1 is projected to return 5.5% after some strange turn of events with the Hwy427 routing through the property early.
7 are projected to earn the same amount, but over a longer duration, so the annualized ROI is less than originally projected.
1 is on schedule and on target... but this one is too new to have delays yet.
(Doing the math, 8 of 10 are delayed projects and 9 of 10 are projected to be under projections)

Greybrook does a good job of communicating the status of their projects twice per year and has excellent investor response when it comes to communicating directly with the company ad hoc. They are heavily invested personally in the company which is a good sign. The turmoil of the past few years with housing fluctuations and covid have been a challenge, so I do cut the projects some slack. However, when I provided some constructive criticism of their forecasting, they did tell me they were the best in the business at forecasting but will be taking a more conservative approach in the future for both duration and profit... my personal experience contradicts their claims of "best", but your mileage may vary as they have had successful projects in the past.

My current analysis of my investments with Greybrook are trending to be about the same as my investments in the stock market... only these private equity projects are far less liquid. Once your money is in, buckle up because you are along for the bus ride with Greybrook at the wheel. (That may be a positive or negative depending on your perspective. Some people don't have the time and knowledge to manage a stock account, some people want to diversify and it's best to do that with a team of professionals driving, others want control and liquidity and to take an active role in their money's growth.)

Perhaps next December I'll come across this thread again and provide another update.
Newbie
Apr 27, 2012
5 posts
8 upvotes
ETOBICOKE
porticoman2 wrote: ^^ thanks for the informative posts ^^^
You're welcome. I hope it helps someone.
porticoman2 wrote: you are likely one of a few that goes to private lending, you understand the risk & hopefully have the stomach for it & are able to sleep at night.
I understand the risks and rewards, and although I'm not always happy with the updates, I understand they are my own and can sleep well enough with that.
porticoman2 wrote: what do you consider the risk level is with your 'greybrook' investments?

your investment in the 8 projects over the next 5 years what are you expecting your annualized return will be on the total bundled 8 investments?

are you locked in or able to exit an investment at anytime?

have you considered that one or more will return you 0%?
To answer your questions in order...
1. Risk level... uhm... that's difficult to say. Private equity is a high-risk, high-reward type of investing. So the obvious and official answer is, "High risk". That being said, you are investing in projects that hold underlying real-estate so there is physical backing to the money you are putting in. Compare that to something like Uber where their value is based on PROJECTED profits but they haven't actually earned money yet, if they go bust, you have nothing. Or worse yet, people who "invest" in BitCoin... that's high risk, but there's nothing physical underlying the investment, so if it goes bust you're left holding air.
So my personal assessment is that of the possible high risk investments that I see, private equity investments with Greybrook are on the safer side.

2. I'm now invested in 10 projects (increased from 8). The original projections for projects are usually annualized around 20%. My current projections change based on updates, but my gut feeling is that with my current batch of 10 projects will be about 12%, mainly due to that one really bad project. Otherwise, I would see them reaching 14-16%.
That being said, the world is in turmoil with COVID. The stock market is going up, the actual economy is.... volatile. So who knows what we will look like in 5 years. One GOOD project could boost the average back into the high-teens or two GOOD projects could easily put this into the 20-30% range. It's difficult to gauge with such a small sample size.

3. For all practical purposes, you are "locked in". You are a limited liability partner in most cases, so it's not that you are giving someone else money, you are actually a partner. A partner with no say, but a partner none the less. You ride it out with the rest of the partners and the management in control.

4. Right now, the 0% (actually less than 0% at the moment) has gone a bit south. It was very unfortunate timing for the release of that project due to unforeseen government bills that hurt the housing market, right at the time we opened sales. So that's a bit of an anomally. A 2nd project, is greatly reduced because the Government changed the location of the 427, then changed it again... This project is being sold off early to capture profit as a safety measure. They determined it was better to have the bird in the hand, than 2 possible birds in a greatly delayed bush. The other projects all seem to be going well, however, delayed. Some of these delays are covid related - you can imagine that trying to get assessments passed, and construction work done during covid is challenging for any developer.
Here's the key... even though the profit figures remain the same, the delays in completing projects eat into the return values. So I'm not worried about them losing money, it's just a mere numbers game to see how fast they can get done.
I think that answers your question... I'm not worried about the other 9 losing money, just that they've under performed forecasts on an annual basis.
Sr. Member
May 27, 2013
632 posts
60 upvotes
So..... did anyone invest /get returns from greybrook ?
Sr. Member
Nov 16, 2013
917 posts
330 upvotes
GTA
25 K minimum investment with minimum lock in of 5+ years. With no way to get money back in between....approx 20-30% return.

You are locking in 250 K + on such investment.

This requires big heart as same results can be achieved with less risk but better peace of mind.

you are brave.

NomadicCanuck wrote: I understand the risks and rewards, and although I'm not always happy with the updates, I understand they are my own and can sleep well enough with that.

2. I'm now invested in 10 projects (increased from 8). The original projections for projects are usually annualized around 20%. My current projections change based on updates, but my gut feeling is that with my current batch of 10 projects will be about 12%, mainly due to that one really bad project. Otherwise, I would see them reaching 14-16%.
That being said, the world is in turmoil with COVID. The stock market is going up, the actual economy is.... volatile. So who knows what we will look like in 5 years. One GOOD project could boost the average back into the high-teens or two GOOD projects could easily put this into the 20-30% range. It's difficult to gauge with such a small sample size.

So I'm not worried about them losing money, it's just a mere numbers game to see how fast they can get done.
I think that answers your question... I'm not worried about the other 9 losing money, just that they've under performed forecasts on an annual basis.
Newbie
Mar 12, 2008
95 posts
53 upvotes
Toronto/Markham
Currently invested in 2 of their projects with Greybrook.
1- Vaughan
2- Miami
At this time I have just purchased a new construction home, so I won't be able to invest in other projects until my current ones pay out and I plan on reinvesting the returns into other projects.

Had I qualified as an accredited investor I would have gotten in alot sooner. But I didn't and had to wait until they had a friends and family option to invest in their projects.

I have a family member who has been investing with Greybrook for years and has projects being paid out yearly... As long as he doesn't need the cash he rolls the initial investment and the returns back onto other projects.

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