Investing

Investment with greybrook capital

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Jr. Member
Mar 2, 2015
101 posts
27 upvotes
Toronto, ON
******* 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
342 posts
50 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
342 posts
50 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
933 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?
Sr. Member
Apr 8, 2015
919 posts
916 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
2 posts
3 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
342 posts
50 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

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