I just read an article at GlobeSt.com entitled Fund Steers Small Investors to Triple-Net which covers a new “hedge fund” run by Iridium Capital, a new company based in New York City. I was skeptical about the quality of the so-called “fund” as soon as I started reading the article. It seemed to me like some former broker (in this case a former broker named Marilyn Kane) decided to create a TIC for single-tenant properties and make it seem legitimate and distinguished by calling it a hedge fund. Here we go again.
I am writing this post as a fair warning to anyone considering investing any money in this “fund” (minimum investment is $50,000). This quote from the GlobeSt.com article says all you need to know about why you should not give $0.01 to Iridium Capital (emphasis mine):
The sector in which a triple-net asset resides counts for more than its geographic location, Kane says. “It’s not necessary to go into a depressed area to buy a CVS, but there might be a very good reason that CVS looked into that particular area,” she says. “We have the benefit of getting that information on why they made that choice.”
Are you kidding me? She runs a REAL ESTATE investment “fund”.
It is as simple as this: DO NOT EVER GIVE YOUR MONEY TO SOMEONE FOR THE PURPOSE OF INVESTING IN REAL ESTATE IF THEY BELIEVE THERE IS ANY ONE FACTOR MORE IMPORTANT TO A REAL ESTATE INVESTMENT THAN LOCATION. PERIOD.
Something tells me that the institutional capital she hopes to attract will not materialize. I guess she’ll have to make due with the 2,000 investors at $50,000 each needed to meet her $100,000,000 target. I’m sure they have the infrastructure in place to service 2,000 investors. Yeah right.