URL:
Location:
Dallas, TX
Niche:
Multi-Family
Prior::
CrowdStreet

Overall:

Communication/Reporting:

Track Record/Performance:

Sponsor Fees:

To see feedback and discussions from actual Nicholas investors, join over 1000 accredited investors at the 506 Investor Group. 506 Group negotiates lower fees and better terms versus investing direct. See over 300 post about investors experience as Nicholas investors.

Nicholas Residential is a fully integrated Multifamily Investment Firm focused exclusively on:

  • Class "B" Multifamily Investments
  • Late 70's to Mid 1990's Vintage
  • 150 Units +
  • $8m to $35m total capitalization (to stay below the institutional acquisition threshold and take advantage of an unsophisticated, segmented market)
  • $3,000 to $5,000 per unit in value-add capital expenditures
  • Opportunities in Dallas, Houston and San Antonio
  • Properties with a Management enhancement opportunity (through scale and improved operating efficiency)

The company employs low leverage (>/= 75% LTV) and locks in long term (10 to 12 year) fully assumable, non-recourse financing through Fannie Mae, Freddie Mac and HUD. The firm focuses on fully-occupied, strong cash-flowing opportunities with little deferred maintenance in order to maximize investment returns. Although investment underwriting assumes a 5-year hold period, deals are overcapitalized at closing to avoid capital calls and sustain the projects cash-flow through a potential downturn in the market.

Nicholas Residential uses conservative underwriting in order to achieve average proforma returns of 17.0% to 18.5% IRR's and 2.0x multiples net of fees to the Limited Partnership over an anticipated 5-year investment horizon.

Due Diligence & Discussions

Share your experience. Rate and comment!

R G

Feb 28, 2019

Update Feb19, the promised improved NOI actually got worse and below Debt Service.

The most incompetent sponsor I have ever seen, period.

=================

A good sponsor needs to admit the problem, and only when he faces the problem honestly, he can start to make plans and fix issues.  All of us have raised our concerns at least half of year ago, and Paul surely talks BIG and felt confident.  However, numbers don't lie.  We see the trouble coming and decided to be patient about his turn around plan.  For those who are reading this, you can see we are pretty much fed up with his BS and decided enough is enough.

We can only warn others, do not invest with Paul Panza or NicholasResidential.

 

Bob Cat

Feb 23, 2019

Monthly reports are 100+ pages long and have a ton of details. Variances and occupancy numbers seem to get worse over time. They are demonstrating poor performance across the portfolio and the distributions have stopped in the only deal I am in. I am suspecting a total loss on my investment. Seems like a very incompetent sponsor and I certainly have no plans to invest with them again.

V G

Jan 24, 2019

Reporting is good although it is easy to lose track of the main points. The gory details can easily get overlooked unless you scan the report very well. Many of us have had concerns for a while about how the properties are performing and things may be unraveling now. I am in four deals, so more than most other investors and three of the four deals have underperformed proforma for a while. Until last month only one deal (Somerset/Stratton) had stopped distributions (reason given was pending sale but I think there could be more to it) and this month two more deals (Valencia and Spring Creek) will soon be stopping distributions, the reason given is to get additional loan or do a refinancing to a fixed rate loan. My main issue is that I (like others) have seen red flags for a while and when I expressed my concerns to Paul a couple of months back, he pretty much brushed them off. Also, he mentioned about the refinancing and likely knew about additional loan but didn't say anything about distributions being planned to be stopped. 

MHP Investor

Jan 22, 2019

M S

Oct 28, 2018

Reporting is always on time and is very throrough in financials - though their spin on things is usually a little disheartening.  In one deal with them - Valencia - and it is a bit of a disaster.  The last several months of reporting has shown very significant negative variance in every single metric vs. proforma - revenue missing considerably, and opex way over budget - not a great recipe.  Investor distributions are now coming in short and were even suspended for a short period.  Yet, every month they say that occupancy is close to 100%, but then the following month, occupancy is 8-10% lower than previously reported.  If they can't cash flow at 92% occupancy, leaves me wondering what kind of management we have in place.

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Nicholas Residential Nicholas Residential
Rated 2.6/5 based on 21 customer reviews

To see feedback and discussions from actual Nicholas investors, join over 1000 accredited investors at the 506 Investor Group. 506 Group negotiates lower fees and better terms versus investing direct. See over 300 post about investors experience as Nicholas investors.

Nicholas Residential is a fully integrated Multifamily Investment Firm focused exclusively on:

The company employs low leverage (>/= 75% LTV) and locks in long term (10 to 12 year) fully assumable, non-recourse financing through Fannie Mae, Freddie Mac and HUD. The firm focuses on fully-occupied, strong cash-flowing opportunities with little deferred maintenance in order to maximize investment returns. Although investment underwriting assumes a 5-year hold period, deals are overcapitalized at closing to avoid capital calls and sustain the projects cash-flow through a potential downturn in the market.

Nicholas Residential uses conservative underwriting in order to achieve average proforma returns of 17.0% to 18.5% IRR's and 2.0x multiples net of fees to the Limited Partnership over an anticipated 5-year investment horizon.