What People Who Invest with Midloch Say About Midloch and Investing in Private Real Estate

The range of people who invest with Midloch is wide and deep.

Some are (or were) real estate professionals themselves, and know the business inside out. Some are money managers and financial advisors who are experts in stock and bond investing, but less familiar with alternative investments including private real estate. Some are individual investors whose day jobs have nothing to do with real estate or investing.

The common denominator among them is respect for and trust in the Midloch team, and satisfaction with the investment returns and quality of service provided by the firm.

“You’re missing the boat if you’re not exposed to [alternative] asset classes”

Mark Zellmer is a former wealth manager who invested in both public and private operating companies. Now he invests mainly in the industrial manufacturing and distribution sector. He also was a 17-year adjunct instructor of private equity and finance at Marquette University in Milwaukee.

Somewhere along the way, he says, it became apparent that “you’re living in another world if your investment portfolio consists only of stocks, bonds, and cash. You’re missing the return boat if you’re not exposed to other asset classes.” So he started investing in private real estate.

Mark’s history with some of the principals of Midloch goes back 15 to 20 years. He met Andy Sinclair, Midloch CEO, long before Midloch was launched. Mark knew from the beginning that Midloch was “special.” The team, he says, is “able to survey the market and figure out what works and doesn’t, and figure out a better way of doing it.” Midloch, he says, is “small enough to be nimble and take advantage of opportunity, and large enough to pull it off.”

Mark appreciates that the Midloch team is very thorough in its analysis of investments, but “not stuck in analysis paralysis. They make decisions and move on.” He notes that Midloch is “asset agnostic,” as in open to investing in all property types, and observes that the middle market where Midloch operates is generally very inefficient, so it’s rife with opportunities to generate attractive returns for investors.

Reflecting on his background as a wealth manager focused on equities and fixed-income investments, Mark likens real estate to “a bond with bricks and a roof … it’s a function of cash flow and terminal value.” Private real estate, he says, is a bond surrogate. “You may pay a little price for illiquidity, but with the potential to get a better return on a risk-adjusted basis.”

Mark has invested in every Midloch fund since the firm’s inception.

“Midloch really analyzes and understands each individual investment and how they’re going to make money”

Kathy Chin is a physician practicing in Southern California. She invests on her own and with an investment group of other doctors and entrepreneurs.

A desire for diversification and a stream of passive income led her to Midloch in the early 2020s. She had just completed an investing class where she learned about alternative investments including private real estate. (Kathy is a perpetual student, by the way. She is studying multiple languages including Spanish, Mandarin, and Japanese.)

Coming out of the investing class, an investor-friend who had previously invested with Midloch recommended she check out the firm. She also considered, briefly, becoming a landlord, but questioned whether she had the time or “the stomach” to actively manage properties like short-term rentals herself. “Part of my job is pain management, which can be time consuming,” she says. “Best to avoid the pain of being an active landlord and leave it to the professionals.”

Kathy appreciates that Midloch is relatively conservative in its investments and watches her money with full attention as if it were theirs. Some other operators, she says, are not even full-time investment and asset managers; it’s a sideline for them. Some others have conflicts of interest, or not much skin in the game.

“Midloch really analyzes and understands each individual investment and how they’re going to make money as an operator, including by having multiple exit plans,” she says. “They don’t cut corners on due diligence.” She gives Midloch high marks for transparency and clear, consistent reporting to investors.

“Midloch sweats the details that I don’t want to sweat anymore”

Kevin Smith is a lifer in professional real estate investment management. He’s formerly head of Prudential Real Estate’s investment management business in the Americas. (Yes, that Prudential.) He’s been a real estate investment fund manager himself, responsible for portfolio strategy, acquisitions, dispositions, and asset management.

Kevin’s been an investor with Midloch since the firm’s launch. He’s “admired how Midloch navigated through the pandemic, how picky the investment committee is, and the care they take with our funds.” Yet, he says, “while Midloch says no a lot [to potential investments], you want people at the helm who understand the risks you should take in pursuit of attractive returns.”

Midloch thinks about total returns, Kevin says, including distributions and property appreciation. Some others, he says, are too quick to sell.

Kevin values Midloch’s openness to answering questions and being frank. “They’re happy to talk about whatever I ask, no gobbledygook.” The firm’s investor reporting is straightforward and written in a way that’s very easy to understand, he says. “Midloch appreciates their investor audience, and I feel informed about what’s going on.”

At the end of the day, Kevin says, “Midloch sweats the details that I don’t want to sweat anymore!”