Certain ‘deals’ raise eyebrows. One in particular was so stunningly out of the norm of what someone (such as myself) would expect, that my inner cynic started regurgitating some ‘un-supressable’ diatribe on what I can politely call ‘suspicious activity’. What I knew then was extremely puzzling, and generated a lot of unanswered questions. Issues like dramatically overpaying for a property, raising capital in unconventional means, serious budget discrepancies, and outlandish predictions, in isolation could be explained, but together, didnt pass the sniff test. And what was I sniffing? I wont print it on a publicly accessible place like a website where the word I have in mind, once printed, can’t be taken back.
Now here we are, a couple years later, the cookies have crumbled, and the dominoes have toppled. Somebody has lost multiple six figures, actually it appears that 25 somebodies, ‘accredited investors’ (this is where the OMG LOL comes in), are wiped out to the tune of $1026500, plus or minus, depending on the outcome of the main lender on title recovering its loan first (if this was how the deal was structured, I can’t know). Those in an unsecured second position are going to fare really badly in a foreclosure, that is a certainty. I would have advised those investors not to touch this deal, I reviewed the investor slide deck when it was initially publicized. It was a horrible document and hard to believe people believed it. The marketing behind the deal was so phony and transparent, and the ownership team track record so thin a person would have had a hard time committing to the capital raise, but it happened.
This is just another in a series of deals where the investor is the bag holder. This is a relatively tiny deal, but wont seem like it to the 25 victims, imagine if they get zero, after the lofty promises found in the slide deck. This really makes the entire industry appear tarnished, that the builders are thieves, and the parasitic hangers on are….well they are what they are. If anyone asks, I am going to give them advice, run from any inner city investment proposal! On this particular deal I would say, where’s the cash now!
This was my first exposure to the deal. Reviewing the documents behind it raised some massive red flags
The sales value published appeared to be too good to be true. And it was.