I totally get why people are upset about all the drama on REtwit right now and are trying to avoid it. As with any pile of shit, though, it's worth figuring out what part of it is suitable fertilizer—that is, what part of it can be put to productive use. Here's what I'm doing with all this drama: I'm taking two valuable lessons from it. One is on the GP side of things, and the other on the LP side of things. (Both, though, apply only where GPs and LPs are acting honestly and in good faith. Everything is different where deception is involved.) For GPs: Don't blow sunshine up your investors' asses. You stopped distributions months ago. In the next twelve months, the terms will be up on the senior debt in the low 4% range on two of your deals, and NOI has not increased enough to keep DSCR above 1 refinancing at current rates. Your investors know things aren't going well. So when you send out updates or an annual letter that makes it sounds like everything is great, your investors think one of two things, and often both: (1) You are clearly not being honest. Everywhere I turn I see more bad news and warnings about CRE, and clearly the deals I'm in are not immune since distributions have dried up, and my financial adviser is telling me most or all of the common equity will be wiped out unless you do an enormous capital call for a cash-in refi. If you are not being honest about the current health of the deals I'm invested in, then I have to wonder what else you were not honest about. (2) I'm afraid I'm about to lose my entire investment, which is making me feel financially insecure, but you, the person who is actively losing my money, seem to be doing just fine!!!! If you're doing so great, and this deal is so great, you should buy me out of it. I cannot overstate how much trouble you are causing yourself sending out those rosy, optimistic updates. They are always included in the documents your investors send the attorney when they start trying to figure out if they can sue you, and they are always, ALWAYS, angry about how rosy those communications are. Let me be blunt: those communications make them want to sue you. It does not matter that every word in them is technically true. It does not matter that your intentions are good, and you are just trying to make them feel better. If you are acting like everything is okay when your investors do not feel at all okay, it does not make them feel better. To the contrary, it makes them feel like you are trying to deceive them, and they lose all trust in you. Once trust is lost, you are unlikely to get it back. And no one, anywhere, has ever wanted their money with someone they don't trust. They now very badly want their money back and are calling lawyers asking how to make that happen. Stop pretending like things are great. Next, to the extent you admit things are not great, DO NOT blame things outside your control. It does not matter how true it may be. Everyone respects you more and trusts you more when you shoulder sole responsibility for outcomes, no matter how unforeseeable or how out of your control they were. No one gets mad at other people for taking too much responsibility for bad outcomes. No one. Ever. But they very much do get angry if they feel like you are avoiding responsibility. You took responsibility for the good outcomes, even when they were due to luck and matters outside your control. You have to take responsibility when those things go against you, too. In sum, far better to overstate how bad it is and how responsible you are than to understate either of those things. Similarly, far better to set expectations for them to stay bad than to set expectations for things to get better that might not get better. Put simply: ❌ Everything is great! We're doing great right now, and the future looks even better. ❌Things are tough right now, but they're tough for reasons beyond our control, and everything is going to be great if you just stick with us and give us more money. ✅ Things are bad. We take responsibility for this. Here's where and how we messed up and what we will do differently in the future. Things could improve, but they could also stay bad or get worse. None of the options at this point are great, but here is the one we think is the most likely to lead to an acceptable outcome. I know it's hard. I know it feels safer to be optimistic and focus on the good, rather than the bad. But it's one of many things in life that feels safe but is actually more dangerous. Do the scary thing. Be blunt AF about the bad news. It will feel more dangerous, but is actually much safer. They will still be angry, but their anger will be tempered by respect for your honesty, and they will trust you more. Their anger will fade sooner, and they will be less likely to start looking for ways to sue you. Let me put this as simply as possible: I don't get calls from LPs who got updates bluntly telling them that the sponsor messed up and the deal isn't going well. I get calls from LPs who got updates that are full of sunshine and roses but who haven't seen a distribution in nearly twelve months. For LPs: You wanted greater rewards. The price for greater rewards is greater risk (and lower liquidity). Much of what is happening right now is exactly what is supposed to happen. If risks never get realized, then they are not risks. You get more upside with higher risk investments because you are accepting more downside exposure. If you did not understand that simplest of investment mechanics—that risk and reward are inversely correlated—then you had no business investing in anything. You were happy to cash the checks from those fat exits in 2018–2021. You enjoyed the upside, now you have to make peace as best you can with the downside. It sucks, and it is painful, but it is the price that will inevitably have to be paid if you invest in enough things that have high upside. You keep rolling the dice, you're gonna get snake eyes on some of those rolls. There is a material difference between a sponsor who deceived you and a sponsor who wasn't positioned to preserve capital in changing market conditions. If they exaggerated their credentials, failed to disclose material deal terms, or misappropriated funds, then you should 💯 sue TF out of them. But if the sponsor was honest about their credentials and the deal terms, then you got what you paid for. Unless and until you discover that you were materially deceived about what you were investing in or whom you were investing with, then the problem isn't the sponsor. Yes, I know they turned out not to be as smart as they seemed. It's an expensive lesson, but a really important one: you have to distinguish between those who are good at marketing themselves, and those who are good at business/investing. Super helpful to ask the question: "Do I want to invest with this person because they're good at creating value, or because they're good at making people want to invest with them?" If you aren't absolutely certain about the answer to that question, there are professionals you can hire to help you figure it out (most notably, Aleksey). And no, you can't get your money out now that you've lost confidence in the sponsor. In addition to the extra risk, the higher potential upside you bought comes with lower liquidity. One of the many things in life that seems acceptable in theory, but can turn out to be unbearable in practice. Again, an expensive lesson but a valuable one. You simply cannot develop a good sense of risk without suffering some harm. Such lessons are painful, but this is how we learn. You will be a better investor if you can put your hurt feelings aside and figure out the value in the experience. Figure out how much of the shit you're experiencing can be used as fertilizer. The overarching lesson for both GPs and LPs here is: You can't have all upside and no downside. Own both. You took the accolades and the money when things went well. Now that they're going badly, you have to take the responsibility and the loss.