Trion Properties is a multifamily real estate investment syndicate. In this Trion review, we’ll examine how it works and explain the types of investors who stand to benefit from the company’s hands-on, vertically integrated approach.
Trion Properties has a strong track record and is worth consideration for high net-worth accredited investors. Its key differentiator from other real estate platforms is that the entire operation is done in-house, including underwriting, buying, renovating and managing the rentals. There’s an opportunity to invest directly in a single property or in multiple properties through a fund. However, their complex fee and distribution structure makes it a better fit for more advanced real estate investors.
- In operation since 2005.
- Relies on in-house, tightly controlled property management.
- Has a solid track record and IRR.
- Minimum $50,000 investment.
- Distributes returns via a waterfall.
- Complicated fee structure.
- Limited properties available.
Trion Properties: The Basics
Los Angeles based Trion is a private investment fund in operation since 2005. Unlike platforms that act as investor-facing cogs in a larger chain, Trion purchases, underwrites, and manages all their investments
While Trion primarily began acquiring properties in California, Oregon and Colorado, the company is now focusing with equal effort in the southeastern United States. Roughly half of the investment opportunities available at the time of publication are located in Florida, Georgia and North Carolina.
In 2021, Trion closed on nearly $500 million in assets between Los Angeles and Miami.
Types of Properties on Trion
Trion can be viewed as a “rehab” property investment vehicle because it seeks out what the firm describes as value-add projects driven by the acquisition of “underutilized” properties in rising markets. Trion converts these underutilized multifamily properties into more modern, attractive and affordable rentals.
Here’s an overview of the Trion process:
- Sourcing begins for the purchase of multifamily properties at attractive valuations. Access to transportation and major employers is factored heavily during property selection.
- Properties pass the initial screening stage and then undergo modeling to determine potential.
- Trion also identifies optimal capitalization structure during the decision period to avoid leveraging pitfalls. Property-specific scenario modeling, stress tests, and sensitivity analysis of exit cap rates are also performed.
According to Trion, the ideal building is a blank canvas that has remained untouched for at least 10 years. Trion prefers imperfect properties that allow for custom updates that unlock maximum investment potential in the current market. Trion reviews about 100 deals for every property it purchases.
Once a property is purchased, Trion manages the renovations. Acquired properties undergo renovations designed to boost investor return by optimizing rent potential, increasing lease renewals, and reducing vacancies.
How You Make Money
Trion investors are free to “shop” for the properties they like from a list of current opportunities. In addition, Trion periodically launches funds that allow you to invest in multiple properties at once.
Their newest fund, Trion Multifamily Opportunity Fund IV, LLC, launched in February 2023 and is expected to contain between 8-12 total properties.
Investors receive both dividends based on the property’s revenue and potential appreciation minus costs and fees (discussed below).
The average hold time for Trion properties ranges from three to 10 years. As of Q1 2023, Trion has purchased 84 properties since inception and exited 40.
Costs and Fees
The fee structure varies by property and fund type and is complex for novice real estate investors. Unlike some alternatives discussed below, there is no set fee management fee.
Funds on Trion pay out profits via a “promote” structure.
In private real estate investing, “promote” is a form of compensation paid to a fund’s sponsor (in this case, Trion) using the fund’s cash flow to incentivize the sponsor to ensure a profitable project. In other words, the better the property, the better Trion does (and, of course, the better you do).
Trion then offers “breakpoints” for higher levels of investment, or for investing in a fund in its early stages.
In private real estate investing funds, breakpoints refer to tiered levels of promote that are offered to investors based on the amount of their investment. These breakpoints are used to encourage higher investment levels and to reward investors who commit more to the fund.
Breakpoints are typically offered when a fund is in capital-raising mode.
Trion vs. Alternatives
Trion’s business model, while similar to that of other popular crowdsourced real estate platforms, sets itself apart in several ways.
Notably, the company operates similarly to a private real estate syndication firm, which may deter some investors who prefer more accessible options. However, the restrictive pathway to entry also provides a level of exclusivity that could appeal to certain investors.
Trion vs. Fundrise
Fundrise represents a completely different end of the spectrum from Trion.
Fundrise is open to non-accredited investors who can participate on the platform for a minimum investment of $10. Even Fundrise’s Advanced tier — which requires a minimum investment of $10,000 — doesn’t come close to Trion’s $50,000 minimum.
With a portfolio totaling $5 billion, Fundrise is obviously much larger than Trion.
See our Fundrise review to learn more.
Trion vs. Crowdstreet
Crowdstreet focuses on both residential and commercial investments. While Trion is a vertically integrated fund, Crowdstreet’s platform acts more as a middleman between developers and investors.
Investors can tap into potential asset classes tied to hospitality, industrial offices, medical offices, multifamily homes, office space, retail, self-storage buildings, senior housing, student housing and more. At $25,000, the minimum investment required for Crowdstreet is still lower than the $50,000 bar set by Trion. Like Trion, Crowdstreet only accepts accredited investors.
See our Crowdstreet review to learn more.
Trion vs. REITs
In the world of real estate investment, Trion is a unique player. Unlike Real Estate Investment Trusts (REITs), Trion operates as a private real estate fund. This means that investors are invited to contribute capital to purchase properties, rather than purchasing shares in a corporation that owns properties.
Trion’s approach offers a few key benefits over REITs.
First, investors in Trion’s fund can review property details before committing to an investment (If you’re investing directly, instead of in a fund). This level of transparency is not always available in REITs.
Additionally, Trion’s properties are managed in-house, rather than outsourcing property management to third parties. This allows Trion to have greater control over the costs, scheduling, and market positioning of its properties.
Of course, the big downside for many investors compared to a REIT will be liquidity. Unlike a publicly traded REIT, you can’t simply sell your holdings back to Trion.
Trion Properties: Final Verdict
Trion Properties is in an unusual spot within the online real estate investing industry.
For some investors, it can be difficult to understand where Trion should fit into the overall picture. The high minimum investment of $50,000 that’s required makes this a platform that is hard to simply “dabble in” without going all in.
Investors may also feel limited by the fact that Trion offers a much smaller investment pool with much higher restrictions on how they can invest.
Trion shines when it comes to location. Its properties in California and Oregon are situated in markets that are extremely hard to tap into as a first-time investor. Trion has also been smart about directing most of its newer investments toward rising markets in the emerging southeastern United States. This can allow someone with a concentrated real estate portfolio in a specific area to develop some diversity.
The biggest downside to Trion for investors is the complexity. While many other real estate platforms have set fees, Trion doesn’t openly publish much about its business model. Details regarding how dividends are handled, monthly payment schedules, and opportunities for liquidity are all largely veiled.
Therefore, some serious research should be done before investing in a specific property or fund. That said, Trion’s impressive history of returns may justify the time and effort it would take to fully understand a deal.
