URL:
Location:
Santa Rosa, CA
Niche:
Value-Add Class B & C Apartments
Prior::
Direct

Overall:

Communication/Reporting:

Track Record/Performance:

Sponsor Fees:

Praxis Capital, Inc is a vertically integrated real estate private equity investment firm which

combines an entrepreneurial approach with an institutional infrastructure. As such, we are committed

to developing lasting relationships with our clients by assisting them in building wealth through

quality real estate investments.

The executive team at Praxis combines more than 100 years and $6.3 billion of experience in the

multifamily sector; including management of over 90,000 apartment units.

We see opportunity where others don't. That’s why “Recognizing Opportunity – Delivering Results”

isn’t just a cheesy tagline – it’s the very core of our being. Combining a 25 year history of over 700

transactions with a proven track record of preserving our investor’s capital and delivering solid

returns, Praxis has earned an enviable reputation for delivering on that commitment of results. Our

long history has allowed us to experience adverse market cycles, and not just survive them, but thrive

because of them. 

Being a true value investor, the focus at Praxis is to implement both tactical and strategic models to

acquire underperforming real estate assets that we can transform and literally “create” value through

renovation and repositioning. We look hard to find properties which offer both a compelling back

story and strong upside potential. 

We are small enough to give our investors the individual attention that they deserve yet large enough

to command industry respect. Our complete infrastructure in our markets gives us the ability to not

only closely monitor our current portfolio of properties but also to respond quickly to new

opportunities in a variety of geographies.

 

Fees and Other information about the sponsor:

 

1.     Acquisition fee (typical). Generally 1.5% to 2.5% depending on the offering.  

2.     Asset management fee (What is based? (Equity, Total Assets, or Revenue) Typically 1% of

gross collected income.

3.     Management fee (typical) Straight pass-through of property management charges, typically 3%.

4.     Construction fee (typical) 0% to 5%, depending on size and scope.  Historically has always been

0% but we expect that future offerings might include construction oversight in some cases.

5.     Sponsors Loan Fee (typical)  Typically no more than 1% of the loan amount

6.     Disposition Fee (typical) 1%

7.     Promote & Waterfall (typical)  Varies from offering to offering.  Most include an 8% preferred

return and with promotes on a sliding scale as IRR increases.

8.     Catch up Fees for sponsor in Waterfall? We don't do catch-ups. 

9.     Years of experience/existence CEO has 27 years of real estate investment experience and over

700 acquisitions. Praxis Capital Inc was formed in 2001.  

10.  Number of deals sponsor has participated with outside investors  20+ syndicated offerings, some

of which were single-family investment funds that acquired hundreds of properties. 

11.  Asset Value of Sponsor's Investments.  Currently over $100 million

12.   Average Investor IRR on completed deals (Low, high and median. If available)  Specific to our

value-add Multifamily strategy, Praxis has had two full-cycle deals.  One was 43% IRR, the other

was 28.5% IRR.

13.  Number of times exercise their callable right to investors.  We have never issued a capital call.

14.  Typical investment by sponsor (% or equity).  Varies from one offering to another, historically

has ranged from 0% to roughly 10%. 

Praxis Capital is a active sponsor in the pacific northwest.  Please use the investor ratings and reviews to help you determine if this sponsor is a scam or legit.

Due Diligence & Discussions

Share your experience. Rate and comment!

Alex Trepetin

Mar 20, 2017

I was introduced to Praxis from another member of the 506 Investor Group in early 2016 and Praxis had just begun their first "Condo Arbitrage" deal in San Diego and about to do a similar deal near the San Francisco Bay Area. Although their minimums were a little above my comfort level, I did drive up to Santa Rosa and meet with Brian Burke and Bob Dreher and came away very impressed. They knew their markets and they knew Multifamily investments. After doing the strongest due diligence I had ever done on an investment, a company, and their principals, I invested MORE THAN THE minimum on their condo deal. So far it is only about halfway through the transaction, but they are slightly above proforma and a bit ahead of schedule.

Communication is great. Both Bob and Brian reply to emails quickly. Updates are timely, honest, and to the point, without any fluff. 

On a side note--I was at a Multifamily conference (or seminar) in late 2016 with numerous "experts" on the state of the MF market speaking, and about 100 developers, sponsors, etc in the audience. One of the speakers mentioned that we are currently in the 7th or 8th year of an "expansion" and there must be some "contraction" in the near future. He asked all the finance people that prepare proformas on upcoming deals "is anyone including the inevitable recession in their 5 year proforma?" I saw two or three people raise their hands. One of those people was Bob Dreher of Praxis.

Mark Kelly

Jan 28, 2017

Invested in multiple Praxis deals.  None have gone full circle, but I can give some feedback:

First one (fix and flip) is underperforming, but very likely due to timing on my part.  The fund closed to new capital immediately after I got in because deal flow dried up. (this fund opens and closes as the market ebbs and flows)

Second (Income fund) should begin to perform very soon now that the refinance happened and all capital invested.  The problem here is we expected to get most or all of our funds back on a refinance, but that did not happen.

Third is a Houston multifamily value-add and so far to date everything looks very good and above their proforma numbers.  We'll see what happens on the refinance of this, but I am very optimistic about this.

Last is a condo conversion -- this fund should be done this year and so far all looks good and is moving along as planned.

I will note here:  I visited Praxis, their offices and was truly impressed with their team.  Very transparent and have no problem letting investors know when things aren't going as planned.  When there was a fire at the apartment unit, investors knew about it the very next day.  Communication is excellent.  As you can see above, performance is a mixed bag, but the first two are very market specific and likely has more to do with the market ebb and flow.

All in all, I am pleased with Praxis and likely will invest again, but probably not until one investment pays off.

Mark Kelly

Jan 28, 2017

addendum:  I forgot I also visited the Houston multifamily and chatted with the staff and managers there.  They had nothing but good things to say about Praxis and how it was great to work with them to get what they needed done for their tenants and staff.  Always good to see those who work for Praxis with smiles on their faces.

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Praxis Capital Praxis Capital
Rated 4.0/5 based on 8 customer reviews

Praxis Capital, Inc is a vertically integrated real estate private equity investment firm which

combines an entrepreneurial approach with an institutional infrastructure. As such, we are committed

to developing lasting relationships with our clients by assisting them in building wealth through

quality real estate investments.

The executive team at Praxis combines more than 100 years and $6.3 billion of experience in the

multifamily sector; including management of over 90,000 apartment units.

We see opportunity where others don't. That’s why “Recognizing Opportunity – Delivering Results”

isn’t just a cheesy tagline – it’s the very core of our being. Combining a 25 year history of over 700

transactions with a proven track record of preserving our investor’s capital and delivering solid

returns, Praxis has earned an enviable reputation for delivering on that commitment of results. Our

long history has allowed us to experience adverse market cycles, and not just survive them, but thrive

because of them. 

Being a true value investor, the focus at Praxis is to implement both tactical and strategic models to

acquire underperforming real estate assets that we can transform and literally “create” value through

renovation and repositioning. We look hard to find properties which offer both a compelling back

story and strong upside potential. 

We are small enough to give our investors the individual attention that they deserve yet large enough

to command industry respect. Our complete infrastructure in our markets gives us the ability to not

only closely monitor our current portfolio of properties but also to respond quickly to new

opportunities in a variety of geographies.

 

Fees and Other information about the sponsor:

 

1.     Acquisition fee (typical). Generally 1.5% to 2.5% depending on the offering.  

2.     Asset management fee (What is based? (Equity, Total Assets, or Revenue) Typically 1% of

gross collected income.

3.     Management fee (typical) Straight pass-through of property management charges, typically 3%.

4.     Construction fee (typical) 0% to 5%, depending on size and scope.  Historically has always been

0% but we expect that future offerings might include construction oversight in some cases.

5.     Sponsors Loan Fee (typical)  Typically no more than 1% of the loan amount

6.     Disposition Fee (typical) 1%

7.     Promote & Waterfall (typical)  Varies from offering to offering.  Most include an 8% preferred

return and with promotes on a sliding scale as IRR increases.

8.     Catch up Fees for sponsor in Waterfall? We don't do catch-ups. 

9.     Years of experience/existence CEO has 27 years of real estate investment experience and over

700 acquisitions. Praxis Capital Inc was formed in 2001.  

10.  Number of deals sponsor has participated with outside investors  20+ syndicated offerings, some

of which were single-family investment funds that acquired hundreds of properties. 

11.  Asset Value of Sponsor's Investments.  Currently over $100 million

12.   Average Investor IRR on completed deals (Low, high and median. If available)  Specific to our

value-add Multifamily strategy, Praxis has had two full-cycle deals.  One was 43% IRR, the other

was 28.5% IRR.

13.  Number of times exercise their callable right to investors.  We have never issued a capital call.

14.  Typical investment by sponsor (% or equity).  Varies from one offering to another, historically

has ranged from 0% to roughly 10%. 

Praxis Capital is a active sponsor in the pacific northwest.  Please use the investor ratings and reviews to help you determine if this sponsor is a scam or legit.