Multifamily Property Management Firm in Phoenix- Fraud in play
Is anyone else seeing this? It’s clear to me there is fraud happening there. A clear commingling of funds and a super inexperienced and unsophisticated team at the helm. Also heard of controllers leaving due to questionable activities.
They also have been leading with a statement that they have not and will not be calling for capital from investors on any deals in the next few years. This actually doesn’t seem mathematically possible if you know how rate caps work.
Either money is required to be set aside monthly to buy the next rate cap upon expiration, or a huge Capital call will be necessary to purchase a new cap at expiration. Either way… capital call.
But they are still buying deals with large reserves for capex and they launched a fund. I would have to think those funds are getting diverted in lieu of capital calls.
What’s worse is the investors are thinly capitalized and have little to no understanding of the business and don’t know what questions to ask. It’s somewhat sad to see because those folks are investing some hard earned money. They also will not be able to answer a capital call.
So if it hits the fan, it will cascade through their portfolio quickly.
It wreaks of commingling.
Tides bought bad deals with poor structures but had prior experience and deep pocketed investors. This multifamily property management firm in Phoenix has no experience- literally only a few years worth and have shallow pocketed equity.
It will be much worse there in my opinion.
Agreed. Their team is quite the hodgepodge of back office clowns, maybe the worst pyramid scheme yet.
Never heard of this clown show but just looked at their team and wow this comment is on point lol
Damn you aint wrong. Their CEO is including former experience as a news reported and sports anchor in their bio. There isn't a single stat about owning or managing real estate except just saying he raised a portfolio of $35m. A portfolio of what? We don't know!
How is their payroll like 100+ deep? Wreaks of mismanagement, baggy suits, and minimum health insurance packages.
Are they already on the Bingo board?
Edit: They are.
This is pure gold
This deserves an award
Best thing I’ve seen on here in a long while
LOL ... was this made here?? amazing
Hah gotta love the WSO OG content, originally from the Tides thread I think… will be interesting to see the dominoes fall
How do i redistribute these bananas to the original creator. I feel like a fraud
You seek forgiveness and so you shall have it. Go forth and preach the good word of the Esque from mountain high to valley low. As it says in the good book, one laugh is good but many is better. Now I say to you, share thy message to all ye friends and foes alike and we shall laugh.
But in all seriousness, maybe I should put a small trademark on the bottom that this was create on WSO so when the WSJ picks it up in 18 months at least this site gets credit.
Who is the "M" in the second box in top row? Thanks!
Shouldn't be but I am a little taken aback at the types of groups that were able to raise significant amounts of capital in this run up.
These guys were hardcore marketing on linkedin etc.
posting 40%+ IRR returns, min investment was $25k too I believe too.
I have heard of them take in money $10k at a time- they brag about 300+ investors in each individual deal. Complete disaster
They just shut down their Dallas office after about 2 months of it being opened.
Where did you hear this? I thought they just opened?
It has been circulating through the DFW multi grapevine.
Why are you wasting time on WSO? Grab your favorite whistleblower attorney and run on over to the SEC.
They are still buying .... posted May 31st:
Closed! Cantebria Crossing Apartments in Dallas, TX. Rebranding as “Rise Oak Creek”
- This is our 43rd Acquisition
- 3rd Acquisition in Dallas, Texas (864 Total Units)
- 146 Individual Investors
- We currently have $1.51 Billion+ of Assets Under Management, all in the Phoenix, AZ and Dallas, TX MSA.
To some extent this is probably pre-programmed by decisions made months ago. If they've been in contract for 6 months or something... then it's not surprising there are a few more closings that will trickle across the finish line, regardless of the state of the rest of their portfolio
Still tying up deals now…… and starting a discretionary fund
Looks like an absolute hellhole I can smell the cigarette stench from here
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