Syndication/SEC attny in Arizona needed to represent shareholder.
Investor · Phoenix, AZ · Member since 2015 · 18 posts · 1 vote
I need to consult with an an attorney that's knowledgable about syndication. One that is comfortable representing a shareholder that has not been paid and is being ignored by the sponsor. I've been told that should be a SEC attorney. I'd prefer a recommendation from someone that has been in the same boat that I am and used an attorney they appreciated. Thanks very much.
@LaVonne Eaton could you elaborate on your specific issue other than not returning calls? It is a turbulent time for some syndicators so you might want to allow some time for them to respond. The guys that syndicated in value cash flow markets earlier than 2019 (think Atlanta, NC, FL, Midwest) should be just fine. Maybe the ambitious 3 year hold turns into 5-7. The first time syndicators purchasing in PHX circa 2018-2019 are in the witness protection program and I wouldn't expect a call back anytime soon.
I'm sorry to be the bearer of bad news but if you invested in a PHX multifamily purchased in 2018-2019 then you are probably in for long and bumpy ride. The most respected syndicators I know were not able to deploy in PHX during this time and for good reason. Hopefully your operator/sponsor had experience in the PHX market before the run up and has been around long enough to have managed through a recession.
Many "assets" in this time frame were purchased by very inexperienced operators using inappropriate comp rents to justify an enormous rent bump post renovation. Today this strategy has no viability as there is absolutely no assurance of any rent bump post capex. Nor do you want to be the top of the market in rent price. This was a slow motion train wreck which has turned real time very quickly.
There were some operators bragging on BP about buying at 3.5% pro forma cap rates in 2019, same guys who said RE was overpriced in 2011. It was easy pickings for the local brokers, a running joke that everyone knew who to turn to to offload that ridiculously priced deal. I'm seeing a run for the exits now as they try to list their half completed "value add" hoping to snag the last of the idiot 1031 money that may not think this recession is that bad. Problem is nobody is interested so now the investors have to sit through 5-10 years of unwinding this mess. But, on the flip side, said operator now is sitting on $750k in investor purchase fees and can maybe finally buy some RE of his own. Better save that cash in reserve for litigation.
I would call around to local Phoenix real estate attorneys (or wherever the syndication is based) and ask for referrals. They'll know who to point you towards if they can't handle it themselves.
Here's a good start:
https://syndicationattorneys.com/
You may want to talk to @Jillian Sidoti. Not sure if she and her team does litigation but they are experts in securities law.
Depending on the amount at dispute and underlying jurisdiction, you may also want to engage a large national firm. I have a few good contacts there. Note that they typically handle disputes where the amount in dispute is in the millions. Good at what they do and can handle issues in multiple jurisdictions. But also very expensive.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
@LaVonne Eaton, as @Chris K. will probably need to look at PPM to see where the controlling entity is actually based, versus the property, since the security is governed by that jurisdiction.
@LaVonne Eaton could you elaborate on your specific issue other than not returning calls? It is a turbulent time for some syndicators so you might want to allow some time for them to respond. The guys that syndicated in value cash flow markets earlier than 2019 (think Atlanta, NC, FL, Midwest) should be just fine. Maybe the ambitious 3 year hold turns into 5-7. The first time syndicators purchasing in PHX circa 2018-2019 are in the witness protection program and I wouldn't expect a call back anytime soon.
I'm sorry to be the bearer of bad news but if you invested in a PHX multifamily purchased in 2018-2019 then you are probably in for long and bumpy ride. The most respected syndicators I know were not able to deploy in PHX during this time and for good reason. Hopefully your operator/sponsor had experience in the PHX market before the run up and has been around long enough to have managed through a recession.
Many "assets" in this time frame were purchased by very inexperienced operators using inappropriate comp rents to justify an enormous rent bump post renovation. Today this strategy has no viability as there is absolutely no assurance of any rent bump post capex. Nor do you want to be the top of the market in rent price. This was a slow motion train wreck which has turned real time very quickly.
There were some operators bragging on BP about buying at 3.5% pro forma cap rates in 2019, same guys who said RE was overpriced in 2011. It was easy pickings for the local brokers, a running joke that everyone knew who to turn to to offload that ridiculously priced deal. I'm seeing a run for the exits now as they try to list their half completed "value add" hoping to snag the last of the idiot 1031 money that may not think this recession is that bad. Problem is nobody is interested so now the investors have to sit through 5-10 years of unwinding this mess. But, on the flip side, said operator now is sitting on $750k in investor purchase fees and can maybe finally buy some RE of his own. Better save that cash in reserve for litigation.
@LaVonne Eaton could you elaborate on your specific issue other than not returning calls? It is a turbulent time for some syndicators so you might want to allow some time for them to respond. The guys that syndicated in value cash flow markets earlier than 2019 (think Atlanta, NC, FL, Midwest) should be just fine. Maybe the ambitious 3 year hold turns into 5-7. The first time syndicators purchasing in PHX circa 2018-2019 are in the witness protection program and I wouldn't expect a call back anytime soon.
I'm sorry to be the bearer of bad news but if you invested in a PHX multifamily purchased in 2018-2019 then you are probably in for long and bumpy ride. The most respected syndicators I know were not able to deploy in PHX during this time and for good reason. Hopefully your operator/sponsor had experience in the PHX market before the run up and has been around long enough to have managed through a recession.
Many "assets" in this time frame were purchased by very inexperienced operators using inappropriate comp rents to justify an enormous rent bump post renovation. Today this strategy has no viability as there is absolutely no assurance of any rent bump post capex. Nor do you want to be the top of the market in rent price. This was a slow motion train wreck which has turned real time very quickly.
There were some operators bragging on BP about buying at 3.5% pro forma cap rates in 2019, same guys who said RE was overpriced in 2011. It was easy pickings for the local brokers, a running joke that everyone knew who to turn to to offload that ridiculously priced deal. I'm seeing a run for the exits now as they try to list their half completed "value add" hoping to snag the last of the idiot 1031 money that may not think this recession is that bad. Problem is nobody is interested so now the investors have to sit through 5-10 years of unwinding this mess. But, on the flip side, said operator now is sitting on $750k in investor purchase fees and can maybe finally buy some RE of his own. Better save that cash in reserve for litigation.
Well, I'm not happy to hear that. I am now in touch with the sponsor but I am being corralled into waiting until the next building sells rather than go to the AZ Attorney General now. My LLC property closed over a year ago and I've only received excuses since. I'm definitely not the only person waiting to be paid in this ponzi scheme so it does feel like a slow moving train that may not end well. That's why I thought an attorney might be able to advise me on next steps. Thanks very much to all that replied.
@LaVonne Eaton
Hi Lavonne,
I’m an investor and Az real estate attorney. Please shoot me a message and let’s connect. I’d like to learn more about the issue your having and I believe one of the attorneys in my firm can assist you.
Cameron Carter
@LaVonne Eaton
Hi Lavonne,
I’m an investor and Az real estate attorney. Please shoot me a message and let’s connect. I’d like to learn more about the issue your having and I believe one of the attorneys in my firm can assist you.
Cameron Carter
Thanks very much, Cameron. I will DM you. LaVonne