Anyone here invest as LP in private RE deals preretirement?

[AustinMichaels]

I've been a limited partner in maybe 5 to 6 development deals over the past decade, mix of multifamily and some light industrial. Returns have been... fine? the illiquidity doesn't bother me now since I'm still W-2, but I don't know if this makes sense when I'm actually living off my portfolio.
The distributions are nice and somewhat predictable once a project stabilizes, but man, the uncertainty during development phases keeps me up at night sometimes and don't even get me started on capital calls.
So curiously, for those of you who retired with LP positions still active, should I keep investing in new deals or just let existing ones mature out? How do you think about the illiquidity risk differently now versus when you were working?

 

[Kevin_debrown]

That’s a good question and one a lot of people wrestle with around that transition. When you’re W2, the development risk feels manageable since cash flow’s covered, but once you’re relying on the portfolio, that same risk can feel a lot heavier. Some retirees I know stopped new LP commitments and just let existing ones run off, then recycled that capital into more liquid, cash flowing assets but others kept a small slice in higher risk deals but treated it like a growth bucket. How comfortable are you with having funds tied up for 5 to about 7 years once you’re no longer earning?

 

[MrSam]

I've been a limited partner in maybe 5 to 6 development deals over the past decade, mix of multifamily and some light industrial. Returns have been... fine? the illiquidity doesn't bother me now since I'm still W-2, but I don't know if this makes sense when I'm actually living off my portfolio.
The distributions are nice and somewhat predictable once a project stabilizes, but man, the uncertainty during development phases keeps me up at night sometimes and don't even get me started on capital calls.
So curiously, for those of you who retired with LP positions still active, should I keep investing in new deals or just let existing ones mature out? How do you think about the illiquidity risk differently now versus when you were working?

The illiquidity math definitely changes in retirement, scale back new deals and focus more on liquid alternatives that can throw off similar income. What's your current allocation to LPs versus liquid investments? and are you planning a hard retirement date or more of a glide path?

 

[Alan]

@AustinMichaels in retirement, illiquidity feels heavier. Most people let existing LPs run out and focus on liquid, cash-flowing assets, keeping only a small slice in riskier deals if comfortable.