You’re past the cautious questions. You’ve done the math, you know the 60/40 portfolio won’t get you where you want to go, and you’ve decided to deploy real capital into alternatives. Now the real question: what kind of returns can you actually expect?
Let me give you a more useful answer than most articles will — backed by real deals currently or recently in the SMART Flex Fund, plus the realistic upside scenarios and the cautionary tales most fund managers won’t put in writing.
Here’s an honest snapshot of what active deals in the fund are projecting and producing. Different deal types, different return profiles, all in the same fund:
Deal-Level Returns — Live SMART Flex Fund Positions
| Deal | Cash Flow | Projected Total |
|---|---|---|
| Marina | 6–8% quarterly | 2.5× in 5 yrs • 22–25% IRR |
| Private debt (first deal) | 11% monthly | Amortizing 10-yr, capital back by Y3–4 |
| Self-storage | 6% Year 1, 8% Year 2 | 2.2× over 5 yrs |
| PE — paving roll-up (Southwest) | 8% | ~4× equity multiple |
| PE — tech startup (4 yrs old) | — | 7–12× if successful |
| PE — contract bourbon distilling | 15%+ once operational | 8–12× EM in Year 7 |
A few things worth noticing about this table:
Some real wins from past deals I’ve been part of (different fund vintages, different operators):
These are not promises. They’re examples of what is mathematically possible when the right deal, right operator, and right market converge. Hold those numbers loosely.
I sat out multifamily completely for the last three years. Did I miss some opportunities? Yes. Did I dodge a lot of pain? Also yes.
A good friend of mine invested in 2019 and 2020 across four or five different multifamily operators across four or five different markets. He thought he was diversified. He wasn’t.
When the 2022 interest-rate hikes hit, the entire multifamily macro market got hammered at the same time. The “diversification” was an illusion — every one of his positions was exposed to the exact same risk factor. He’s looking at nearly a million dollars in losses across that portfolio.
His own honest assessment: he should have invested across 12 to 15 different deals, spread across genuinely different asset classes, not just different operators inside the same one.
That’s not a story about a bad investor. He’s a smart, sophisticated, well-resourced person. It’s a story about a structural mistake — concentration of risk masquerading as diversification — that can quietly cost an investor seven figures.
When investors evaluate a deal, they look at the IRR and the equity multiple. They almost never count the most powerful return layer: the taxes you stop paying.
Imagine you’re paying $30,000, $50,000, $75,000 — maybe even $100,000 a year — in taxes. What if you could redirect that capital into a deal that compounds at 12 to 15% instead of disappearing into the federal Treasury?
That’s not a tax trick. That’s a fundamental restructuring of where your dollars work. And it’s why I deliberately bring at least two tax-advantaged deals into the SMART Flex Fund every year. It’s that important.
For anyone whose serious financial goal is to retire early or transition out of a W-2 onto passive income, the tax line of your return matters as much as the cash-flow line.
I don’t love overusing the snowball analogy, but it’s the right one. Allocating $50,000 to $100,000 per year into vetted alternative deals starts to build real momentum somewhere around year 3 to 5.
By year 5, the picture inside an investor’s portfolio looks fundamentally different than it did in year 1:
And there’s a piece of this that doesn’t show up in any spreadsheet — the excitement. Right now we have a deal where we’re all watching the market every week wondering when a buyer is going to surface. That’s real. It adds energy and engagement to investing that index-fund holders never feel. It’s actually fun.
If you’re an accredited investor deploying $50K–$100K per year into a vetted alternatives portfolio, and you build correctly — across genuinely uncorrelated assets, with tax plays in the mix, and the patience to let the snowball compound — here’s what realistic looks like over a 5- to 10-year window:
That’s the realistic ceiling for a disciplined, patient accredited investor. Not the only outcome — there will be deals that underperform, sponsors who disappoint, and macro shifts you didn’t see coming. But that’s the trajectory worth building toward.
A free walk-through of how we evaluate deals, the SMART framework applied to real opportunities, and how the portfolio compounds over a 5- to 10-year window. The closest thing to looking over my shoulder while I work.
Disclaimer: This article reflects the personal experience and opinions of Kent Leach and Hickory Creek Capital Partners. It is not tax, legal, or investment advice. Always consult a qualified CPA, attorney, and financial advisor before pursuing any private investment. Past performance — including the historical figures and projected returns referenced — does not guarantee future results. Private fund investments are limited to accredited investors and involve substantial risk, including total loss of principal.