RAD Diversified Review — It Wasn't Pretty

RAD Diversified Review — It Wasn't Pretty

Member since 2023 · 2 posts · 7 votes

I read about RAD through BP and I wanted to leave my review of them for other to be better informed before investing with them. Their salesman (Gregg Poirier) was very easy to get in contact when I was considering investing. He was really pushing me to invest by a certain date to lock in my price before the share price went up. I ended up investing $10,000 into their REIT. Once I invested and was part of the "RADD family," he was very hard to get ahold of. He did confirm that I got into the REIT before the share prices went up. I wasn't able to get access to their portal even though he claimed it had been sent over.

Over a month after my investment, I get a call from RADD telling me that they actually didn't put my money into the REIT. They had oversubscribed the REIT and my money has just been sitting around in a RADD account even though Gregg had told me that my money was invested in the REIT. They claimed they didn't want to tell me that my money was not in the REIT for a month because they first wanted to figure out a solution to offer myself and other customers (red flag). They offered me a promissory note with a 10% interest rate that I believe went for 18 months. They said if there is more space in the REIT later on, the money would then be transferred into the REIT, but they couldn't promise me that I'd be able to get into the REIT. I checked out the terms of the note, it wasn't backed by ANYTHING. It essentially said I trusted them to give me 10%, which as is probably clear by now, they aren't really a trustworthy organization. I asked if I got a refund would I still get an annualized 10% for the amount of time they were sitting on my money, and they wouldn't do that.

After reviewing their terms I asked for a refund. It took me multiple emails and calls for them to get the refund sorted out over the next three weeks. My overall gist of them is that RADD got pretty popular and they don't have proper operations setup to deal with the scale. If you're an accredited investor putting in 6 figures, they might take care of you better, but otherwise I would completely stay away from them. Much better places to put your money with people who are responsive, don't overpromise, and don't continuously give you a runaround.

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Melanie P.Pro Member
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
2y
Quote from @Dutch Mendenhall:
Quote from @Chris Tessmann:

Hey Dutch,

My IC Membership refund was approved 2/13/24, and was advised 2/19/24 that it would be processed that coming Friday (2/23/24). I then sent 6 emails over the next 10 days that were not responded to until the last one on 2/29/24, and was told it didn't go out in the prior week, and that your DoC was "hoping it would go out in this week's batch" (3/1/24). On 3/1/24, your DoC sent me an email stating that "Unfortunately no disbursements will go out this week. That is the only update I can provide today. I am the only person that will be able to update you in this matter. You can continue to reach out to the entire company looking for updates but again I will be the one to reach out as I get further direction."

After a few additional email interactions that same day, your DoC stated "I do not have an answer for you. I depend on another department as well for answers and I too have to wait," and then asked if I would "be open to an installment of a partial payment? So that I can go and ask if that is possible.If not then I will wait." (This is also after I was asked very early on if I would like to put the refund into the REIT instead of a cash refund.)

Since then, I have sent nine additional emails asking for status update with no response from anyone in the thread. 


I started this refund request process 12/29/23 and it has been extremely frustrating in its' own right, to say nothing of the challenges that prompted the refund request being made in the first place. If transparency, responsiveness, and reliability are truly core values for RADD, I would appreciate you seeing to it that this isn't delayed any further. 


Thank you.

Thank you for bringing this matter to my attention. I understand how important it is to resolve this matter promptly.

I want to address your concerns regarding the delay in processing your IC Membership refund. I have been made aware of some issues, including problems related to IRA money movement and incomplete deals, which have contributed to the delay in issuing refunds.

I want to assure you that your refund has been approved, and steps are being taken to expedite the process. As of now, the refund is scheduled to be issued soon. I apologize for the lack of communication and for the inconvenience caused by the delay.

Transparency, responsiveness, and reliability are indeed core values for us at RADD, and I am committed to ensuring that your concerns are addressed promptly and efficiently.

Once again, I apologize for the inconvenience and appreciate your patience and understanding in this matter.

IRA money movement and incomplete deals? Perhaps you can provide a funds tracking and proof of funds to your investor. Show where their money is received and where it is being held now.

A response like this coupled with your inability to issue a refund in dollars makes you sound like a Ponzi scheme that's about to implode on itself. I understand that is not your history, but that is what you sound like today, IMHO.

See this reply in the discussion

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  • Member since 2024 · 18 posts · 21 votes
    2y
    Quote from @Chris Tessmann:

    Actually just received an email as I was typing that last response out stating that I can expect to see funds next week Tuesday. Will keep the thread updated!


     Did you receive the funds yesterday?

  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    Well, Tuesday (and now Wednesday) have passed and I still don't have my refund. I have been in contact with the same representative that sent the update last week that I would see the refund yesterday, and they don't have any answers other than "they are still waiting on confirmation," and "I just don't have a solid answer for you." (Keep in mind, as @Dutch Mendenhall stated in his response on this thread 9 days ago, "I want to assure you that your refund has been approved, and steps are being taken to expedite the process.")

    Tuesday was the third date/deadline for refund issuance that THEY have set that has now come and gone without delivery. @Dutch Mendenhall, how many times does something have to be confirmed/approved between your Chief Operating Officer, your Director of Compliance, your Director of Special Operations, or "another department?"

  • Member since 2024 · 18 posts · 21 votes
    2y

    And yet others are receiving funding/refunds despite what the 1-U filing on the SEC site of Feb 1 states.

  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    @Dutch Mendenhall are these refund checks actually getting sent out?

  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Chris Tessmann

    Looks like you need to leave a review wherever the others left their reviews

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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y
    Quote from @Harry San:
    Quote from @Chris Seveney:
    Quote from @Jay Hinrichs:
    Quote from @Chris Seveney:
    Quote from @Andrew S Huang:

    I submitted request redemption June 2023 and was told that the funds scheduled for Jan 2024. As of today 3/18/24, I still not receive my funds back. Wrote many emails to RADD. All they reply is that they are still working on it. They don't have eta for the funds. This is very unacceptable. 


     FYI, I do not see any mention of this in the forum, but this was filed by the sponsor in February:

    On February 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to temporarily freeze the Company’s redemption program, effective February 1, 2024. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after February 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the program or to continue to pause the program no later than April 1, 2024.

    SIGNATURES

    Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    By:/s/ Dutch Brandon Mendenhall
    Name: Dutch Brandon Mendenhall
    Title:Chief Executive Officer

    Date: February 2, 2024


    there ya go.. they should send this to all their investors so it ends all the wild speculation.  I suspect very few if any read all the fine print when they invested.. :)

     There was also a SEC staff action order:



    UNITED STATES OF AMERICA
    BEFORE THE
    SECURITIES AND EXCHANGE COMMISSION
    February 2, 2024
    _______________________________
    In the Matter of
    RAD Diversified REIT, Inc.
    5404 Cypress Center Dr. Suite #320
    Tampa, FL 33609
    ORDER DECLARING OFFERING
    STATEMENT ABANDONED UNDER THE
    SECURITIES ACT OF 1933, AS AMENDED
    File No: 024-12046
    _______________________________
    RAD Diversified REIT, Inc. filed with the Commission an offering statement to qualify
    an offering of securities under Section 3(b) of the Securities Act of 1933. The offering statement
    has been on file for more than nine months and has not yet been qualified.
    In view of the foregoing, it is ORDERED that the offering statement be declared
    abandoned on February 2, 2024.
    For the Commission, by the Division of Corporation Finance, pursuant to delegated
    authority.
    Mary Beth Breslin
    Office Chie

    The sponsor can provide more information regarding this. What I will note is typically you have to renew your offering every year and receive qualification from the SEC. The last one on this offering was in 1/19/22.

    Thus this begs the question, should they have been raising money in 2023 without a qualified offering?

    The other thing I noticed is their last audited financials are in 2021 (submitted in 2022) and they did not file any 2022 audited financials or their 1-SA in 2023.

    I requested funds in 6/23 and they told me that it will be issued after 6 months. It is dually signed paperwork, but I still didn’t get my money. I emailed them and send me the about freeze starting Feb 1st 2024. But it should be issued in Early January 2024. 
    who should I report this scam? 
    regards


     Take everything you have into your local police department. See if their economic crimes/fraud unit can help at all. Even them placing a call to find out what's going on is likely to help you get resolution. 

    Has anyone reached out to their bank's fraud department to see if they are maintaining account balances reflective of their operations size?

  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    So I actually did start a review w/ BBB, and that's what kicked off the the last round of communications/promise the refund was coming last week, but now haven't heard anything since another no-update-update on Friday.

    @Dutch Mendenhall it's been a while since you chimed in - are you actually intending to send this refund?

  • Member since 2020 · 6 posts · 14 votes
    2y

    Hey Dutch,


    I'm a investor in RADD. I file my withdrawal application in March 2023 and got approval. Someone from RADD called me confirmed my bank info. and tell me that i will get my withdrawal on January 2024. But till today, I haven't been paid yet. I emailed many time and called every week to follow up with my withdrawals, but every time I got the answer from the manager was i'll give you update as long as we got updates from our executives. It's being delayed for almost two month. I followed all the steps RADD required for withdrawal and I can't get my money back. What's going on RADD? I filed March 2023, and I couldn't get my money back March 2024? Can RADD refund my money?


    Thanks,

    Jingjing Zou


  • Member since 2020 · 6 posts · 14 votes
    2y
    Quote from @Chris Tessmann:

    Well, Tuesday (and now Wednesday) have passed and I still don't have my refund. I have been in contact with the same representative that sent the update last week that I would see the refund yesterday, and they don't have any answers other than "they are still waiting on confirmation," and "I just don't have a solid answer for you." (Keep in mind, as @Dutch Mendenhall stated in his response on this thread 9 days ago, "I want to assure you that your refund has been approved, and steps are being taken to expedite the process.")

    Tuesday was the third date/deadline for refund issuance that THEY have set that has now come and gone without delivery. @Dutch Mendenhall, how many times does something have to be confirmed/approved between your Chief Operating Officer, your Director of Compliance, your Director of Special Operations, or "another department?"


     Did you receive you refund? I have the same situation here. I was supposed to receive my refund on January 2024. But I haven't got it till now. It's almost April. All the response from Radd manager was as long as I get update from executives I will call you. But she never did. For two months, I was getting the same answer. It's unbelivable.

  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    2y

    Very interested in hearing from those who have invested with this company. Two things that stood out when I took a closer look a few months ago were:

    1. The discrepancy between audited and unaudited financials (when actually provided through Rad's website)

    2. The discrepancy between property values listed in their offering statements and actual values (relying specifically on Philadelphia real estate inventory, which is where I am located and have knowledge of property values)

    Have any active investors cared to look into this? 

  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    @Jingjing Zou... I have not. I did wake up to an email yesterday offering a 15 minute call with @Dutch Mendenhall for this (Friday) afternoon, but as I told them (and have remained consistent with since this started), all communications have to be in writing. 

    What followed after that was an offer from them to start making weekly payments until my entire Inner Circle membership fee was refunded over 10 weeks, followed by sending me a new e-sign settlement doc with those stipulations in place of the original - even after I refused the "payment plan" option via email earlier today (as you can imagine, given the experience thus far, the last thing I'm interested in chasing my money/answers even further/longer). They have not responded again (other than sending the e-sign doc) since this morning.


    @Stuart Udis I pretty much avoided looking into any of the Philadelphia offerings knowing I had no idea about the area or the local rental environment/landscape. Wish I could be more help. 

    @Dutch Mendenhall Why is RADD making this such a painful process. If I, as a single investor, can make my payment all at once, why on earth does the RADD Inner Circle need 10 weeks (EDIT) AFTER an already three-month-long process to this point?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Chris Tessmann:

    @Jingjing Zou... I have not. I did wake up to an email yesterday offering a 15 minute call with @Dutch Mendenhall for this (Friday) afternoon, but as I told them (and have remained consistent with since this started), all communications have to be in writing. 

    What followed after that was an offer from them to start making weekly payments until my entire Inner Circle membership fee was refunded over 10 weeks, followed by sending me a new e-sign settlement doc with those stipulations in place of the original - even after I refused the "payment plan" option via email earlier today (as you can imagine, given the experience thus far, the last thing I'm interested in chasing my money/answers even further/longer). They have not responded again (other than sending the e-sign doc) since this morning.


    @Stuart Udis I pretty much avoided looking into any of the Philadelphia offerings knowing I had no idea about the area or the local rental environment/landscape. Wish I could be more help. 

    @Dutch Mendenhall Why is RADD making this such a painful process. If I, as a single investor, can make my payment all at once, why on earth does the RADD Inner Circle need 10 weeks (EDIT) AFTER an already three-month-long process to this point?


    If I was guessing I would say run on the bank and cash flow issues. ??? is why they want a payment plan.. personally I would take them up on it.  But thats me. sometimes you draw a line in the sand and nothing good comes from it.
  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    @Jay Hinrichs this has already been a three month long process in which I have been told the refund was approved and given three separate dates that I was to have the whole refund in hand. All these dates have come and gone with zero refund. 

    This is also on the heels of their update call last night where one of the focal pitch points was discussing the "millions and millions and millions" liquid in place to purchase more properties. Like I said before - if I, as an individual investor, can make the fee payment at once, how can RADD, as an entity with that type of professed liquidity, not refund the exact same amount - not more, not less - at once? They've had that money from me since August. 

    This isn't a foolish line in the sand that I'm drawing, I'm dealing with a pattern of unfulfilled promises, unresponsiveness, and delays without even an attempt at explanation that put me in the position of having to act as if nothing being said is real. 

    @Dutch Mendenhall wrote on this same thread 18 days ago (and hasn't replied to anyone on here since): 

    "I want to assure you that your refund has been approved, and steps are being taken to expedite the process. As of now, the refund is scheduled to be issued soon. I apologize for the lack of communication and for the inconvenience caused by the delay.

    Transparency, responsiveness, and reliability are indeed core values for us at RADD, and I am committed to ensuring that your concerns are addressed promptly and efficiently."

    It's one thing to say the right things, but you actually have to follow through for the words to have any meaning. All I'm asking for is that actual follow through.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Chris Tessmann:

    @Jay Hinrichs this has already been a three month long process in which I have been told the refund was approved and given three separate dates that I was to have the whole refund in hand. All these dates have come and gone with zero refund. 

    This is also on the heels of their update call last night where one of the focal pitch points was discussing the "millions and millions and millions" liquid in place to purchase more properties. Like I said before - if I, as an individual investor, can make the fee payment at once, how can RADD, as an entity with that type of professed liquidity, not refund the exact same amount - not more, not less - at once? They've had that money from me since August. 

    This isn't a foolish line in the sand that I'm drawing, I'm dealing with a pattern of unfulfilled promises, unresponsiveness, and delays without even an attempt at explanation that put me in the position of having to act as if nothing being said is real. 

    @Dutch Mendenhall wrote on this same thread 18 days ago (and hasn't replied to anyone on here since): 

    "I want to assure you that your refund has been approved, and steps are being taken to expedite the process. As of now, the refund is scheduled to be issued soon. I apologize for the lack of communication and for the inconvenience caused by the delay.

    Transparency, responsiveness, and reliability are indeed core values for us at RADD, and I am committed to ensuring that your concerns are addressed promptly and efficiently."

    It's one thing to say the right things, but you actually have to follow through for the words to have any meaning. All I'm asking for is that actual follow through.

    Chris first I am NOT calling you foolish.. Just based on my personal experiences in the industry for many years sometimes we ALL have to do work outs.. Now if they have liquidity maybe its in a fund they cant commingle with U know rob Peter to pay Paul.. I don't have any personal experience with this company Heck I don't even know what they do or what they invest in. As I said usually when companies cant cut checks right away its some sort of cash flow issue. And starting to get some money is better than no money right ?  I mean if you agree to it and they miss the first payment well then you know your answer.  I do wish all you folks that have posted here best of luck getting your redemptions.

  • Member since 2024 · 2 posts · 3 votes
    2y
    Quote from @Jingjing Zou:
    Quote from @Chris Tessmann:

    Well, Tuesday (and now Wednesday) have passed and I still don't have my refund. I have been in contact with the same representative that sent the update last week that I would see the refund yesterday, and they don't have any answers other than "they are still waiting on confirmation," and "I just don't have a solid answer for you." (Keep in mind, as @Dutch Mendenhall stated in his response on this thread 9 days ago, "I want to assure you that your refund has been approved, and steps are being taken to expedite the process.")

    Tuesday was the third date/deadline for refund issuance that THEY have set that has now come and gone without delivery. @Dutch Mendenhall, how many times does something have to be confirmed/approved between your Chief Operating Officer, your Director of Compliance, your Director of Special Operations, or "another department?"


     Did you receive you refund? I have the same situation here. I was supposed to receive my refund on January 2024. But I haven't got it till now. It's almost April. All the response from Radd manager was as long as I get update from executives I will call you. But she never did. For two months, I was getting the same answer. It's unbelivable.


     Same here. That I was supposed to get my redemption in Jan. 2024 and never did. They told me the same thing you mentioned over and over. Then this month they sent me an email saying that they freeze releasing distribution in Feb. 2024. 

  • Chris TessmannPro Member
    Rental Property Investor · Spring Branch, TX · Member since 2017 · 23 posts · 17 votes
    2y

    @Dutch Mendenhall any response?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Chris Tessmann:

    @Dutch Mendenhall any response?


    out of sheer curiosity what is the collateral for investments.. are they cash flow assets.. Lending on mortgages.. buying bad paper.. new builds ?  just curious is all.
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Jay Hinrichs

    According to the site:

    To purchase real state/real property, perform rehabs where necessary, lease the properties, collect rents, distribute income as dividends to shareholders.

    Rad Diversified realizes revenues from rents and interest on certain investments, as well as capital gains from increases in the value of its real estate portfolio.

    They are a REIT so they have to distribute 90% of their taxable income per year (which of course could be zero due to depreciation).

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Chris Seveney:

    @Jay Hinrichs

    According to the site:

    To purchase real state/real property, perform rehabs where necessary, lease the properties, collect rents, distribute income as dividends to shareholders.

    Rad Diversified realizes revenues from rents and interest on certain investments, as well as capital gains from increases in the value of its real estate portfolio.

    They are a REIT so they have to distribute 90% of their taxable income per year (which of course could be zero due to depreciation).


    OK so buy and hold fund then.. gothca.. 
  • Member since 2022 · 1 post · 2 votes
    2y
    Quote from @Dutch Mendenhall:
    Quote from @Shafi Noss:

    They are using a Reg D 506(b) offering if raising from non-accredited investors. I am guessing you guys are non-accredited investors. If so they need a 'substantive relationship' with you before you put any money in. If they didn't have one, it may have been illegal for them to raise money from you. That is another thing you could mention to the SEC. 

    We do have both accredited and non-accredited offerings available through Reg D and Reg A. Whether you're accredited or not, we're here to address any concerns you might have and aim to do so as effectively and directly as possible.





    @Dutch Mendenhall I too have emailed 3 of your staff members and have not heard back. They were very communicative when they wanted me to invest, but now they don’t respond. I would like my money back as well!

  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y

    I second the suggestion to take the payment plan. You may not get all the payments but it's better than getting zero, which is likely what you will get if you wait.

    Do you have the pitch deck from the update call?

  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    2y

    It is my understanding there are multiple investment vehicles in play. The REIT and the Inner Circle which sounds like JV opportunities? I do not know how the two may overlap and I can only comment on what I've observed in the Philadelphia market, but if the Philadelphia values I've seen in past social media posts and the limited financials available through their filings pertain to REIT owned assets, I can't foresee a scenario where the investors receive anywhere close to the share prices in the event the entire portfolio were liquidated.

    Again, I don't know if the Philadelphia assets I've observed with questionable values are REIT owned, and if so, make up a significant percentage of the REIT portoflio, but if they are that is a serious red flag. I along with a few others have raised questions concerning this in these forums where RAD affiliates and beleive even the companies co-founder have commented but never directly responded to any such question. Now I do not know if the investors who were offered payment plans were part of the REIT but if I was in their shoes, I would take the installment payout solely out of concerns related to the valuations.

  • Member since 2024 · 18 posts · 21 votes
    2y

    RAD encourages investors to make them hard money loans (that are really unsecured) with a 20% interest rate because the "REIT is full" or there is "a waitlist" to get in on the opportunities.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Jennifer O.:

    RAD encourages investors to make them hard money loans (that are really unsecured) with a 20% interest rate because the "REIT is full" or there is "a waitlist" to get in on the opportunities.


    pretty tough if not impossible to  take on 20% long term debt on buy and hold / rent model.. its tough at 10% let alone double that .. 
  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y
    Quote from @Jennifer O.:

    RAD encourages investors to make them hard money loans (that are really unsecured) with a 20% interest rate because the "REIT is full" or there is "a waitlist" to get in on the opportunities.


     Do you have any proof that they do this or do they just do it over the telephone once they receive someone's initial investment and see how it floats? This is unquestionably illegal sale of securities to the investor. Probably also wire fraud. 

    The unfortunate thing is the 20% hard money would be their final lifeline. They'll pay those people (their interest payments) last because when they don't get paid they have items to take that make sense to law enforcement. 

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