Years ago, when we were still working on the Better Dwellings portfolio, before we started Adaptive, I remember having a conversation which I now realize contributed to my bias towards holding real estate permanently.
Can’t remember who it was, but the person told me about checks he receives each quarter.
The source of the funds? Apartment syndications in Hollywood in which his grandparents invested in the 1980s.
He told me that, over the years, his family has received many, many multiples of the capital his grandparents invested. (Of course, I’d love to have access to detailed records to calculate rates of return, etc., but I don’t!)
What appeals to me about this story?
Regular readers know I’m fascinated by the concept of capital as a means of tying a family together through the generations. (The capital for my first deal came from the sale of a building my great-grandfather bought in New York decades before I was born, capital which passed through the hands of my grandfather and mother before coming to me, and eventually, to my children.)
I love the idea that, by investing with some syndicator, the grandparents helped provide for their grandchildren and, presumably, the generations beyond, long after their own time on earth passed.
And I love that, in some of our deals, there are members with names like “Trust for [Person X]”, where the trustee making the capital allocation is a grandparent and “Person X” is a grandchild I’ve never met, but who will benefit from that investment, long after the grandparent is gone.
My hope is that, when those grandchildren receive the checks, they pause for just a second and think of their grandparents, the way that guy I met thinks of his.