@Brent Mendenhall @Dutch Mendenhall
I am an inner circle member with RAD and I just wanted to add what my experience has been like.
First off, I am not hear to speak ill of RAD or to sing their praises, I am simply explaining what my experience has been from my own perspective. I have tagged Brent and Dutch on this post so they can see it and reply if they so choose.
I joined the inner circle in October of 2022. The cost to do so was 50k to join. For me, that was a huge amount of money, but the idea of their service was appealing to me. The sales pitch was that inner circle members get access to exclusive deals like hard money loans, 1% ownership opportunities in various investments / funds, and joint ventures as well as regular educational trainings. As a teacher, I was excited about the educational trainings because I thought it could help me expand my understanding of real estate investing. Sadly, several of the trainings have been cancelled through my tenure with them. I also was very excited about the joint ventures. Essentially, a joint venture is where an inner circle member and RAD go 50/50 on the purchase of a property, but RAD does all of the market research to find properties, does all the rehab and management, etc. As someone who previously owned some rental properties and did not want the headaches associated with that, I found a great deal of potential value in having an entire team do all the research / rehab / management that could fill in the blanks for me in terms of real estate investing. Additionally, they made the argument that, as a large company, if something went sideways with an investment, they would cover the losses. That seemed awesome to me, and I saw some marketing videos / heard on some calls people who actually did have that happen to them with RAD, and RAD offered to buy them out at a profit, so I thought that was really cool.
Prior to joining, I did do a great deal of research. I reached out to some (I believe 3) investors in RAD to get feedback on their experience. They all had very positive things to say. Back in 2022, had you viewed RAD's Google Reviews or BBB Reviews, they were largely (90+%) very positive. Having an SEC registered REIT, along with several positive reviews and endorsements from actual investors, instilled a great deal of confidence in me.
Additionally, their marketing was very compelling. Their videos consistently said that none of their investors had ever lost money. They also said that, as an inner circle member, if you had a joint venture with them and you wanted out, they would buy you out at a 20% profit. In other words, their willingness to be flexible and work with people along with their, at the time, great reputation and very convincing marketing, persuaded me to take the plunge.
My first actual investment with them was a hard money loan. Inner circle members could lend RAD money to earn a return on it. I signed the contract to lend to them on 10/31/2022. It was 50K loan for 6 months at 20% interest. Anything that was not paid back after the first 6 months accumulated 1% per month ($500) to the balance owed. At the time, they said they were paying back loans in 6-8 months at the most, so I felt like that was reasonable. Shortly after loaning them this money, I would say within 3-4 months, I started hearing stories on calls about people either not being paid, or it taking RAD a long time to pay. That being said, there were also people on the calls who had been investing with the company for a long time (5+ years) that had essentially nothing but good things to say about them. So, even though I was freaking out a little, I mean I was 100k in at this point (50k fee to join and 50k loan) I did my best to keep calm despite feeling pretty nervous. Further, unbeknownst to me, this was an unsecured loan. Prior to investing, I asked my coordinator if the loan was secured and she said yes, it was secured by their property portfolio. As it turns out, that information was not accurate. Someone asked if hard money loans were secured by property, and the answer was no, so that did not instill a great deal of confidence. That being said, I would reiterate that several people made the claim that they had done the hard money loan and gotten paid back.
So 6 months come and go and I do not get paid anything. I will say that they never ignored my concerns. When I asked for a meeting with Dutch to discuss my investment strategy, he did meet with me and was pleasant. Anytime I called or emailed, I did get a reply. It was often not a very satisfying answer, but at the very least, they did not dodge me. Also, they were very respectful. I never felt like they treated me poorly, so I appreciated that, but I also felt like I was never getting a full and complete answer. This could be due to the fact that the member coordinators (each inner circle member is assigned a dedicated customer service person) may not have had the information themselves. My only complaints with their customer service are 1. I never felt like I was getting all of the information when I asked probing questions 2. They did miss a few scheduled calls with me 3. Overpromising and under-delivering in terms of expectations at times.
I really needed some money from this hard money loan for some unexpected expenses that I had, so I had to go back and forth with them several times, but I did eventually get a payment. The first partial payment that they made to me was in June of 2023. The last partial payment they made to me was in December of 2023. As of this writing (7-19-2024) they have paid me back enough that I am in profit, but they still owe me $4,000 and that amount is accruing at a rate of +$500 per month. I specifically and repeatedly told my coordinator that they are accruing $500/month debt on a small balance and it would be in their best interest to just pay me and my coordinator has confirmed that leadership is aware of the situation, but they have chosen not to pay. I am happy to accrue the $500 / month interest so long as they come through and eventually pay, but they have paid in the past, so I am hopeful that they will do so in the future.
Given that they paid me back enough to be in profit and that there were still investors who were very happy with their relationship with RAD, I thought I would invest again, but I did not want to do a hard money loan. I wanted my investment to be secured by real assets, so I did a 1% deal and a joint venture deal. The 1% deal was for vacant land in Rancho Cucamonga, California. Essentially, I own 1% of a piece of land there that RAD plans on developing over the next few years. I also have a joint venture with them on a single family property in Philadelphia that is currently rented. I know you might be saying to yourself “Why would he invest again?!” and the answer is multi-faceted and a little complicated. In addition to the aforementioned reasons (I am in profit from the hard money loan and the positive testimonials from some long-term members), I had already invested 50k to join and there was no way to get that money back. I thought by investing in real assets that I would have a better chance of not losing on my investment. Also, and I sincerely mean this, I really want this relationship to be successful. I joined the program to build something together. I want RAD to be successful and, in turn, my family to be successful. Ideally, I would like to have 5, 10, maybe even 15 joint venture rental properties. I spoke with a lady who started off with very little like myself and built her portfolio up to 9 joint venture properties and had been pretty happy with the relationship. I still want that. I still hope for that.
I have no update on what is going on with the land, but when I bought in to that deal in January of 2024, I was told that the turnaround time on that deal would likely be 2-4 years, so that is still operating within my expectation.
Sadly, the joint venture property deal has not gone exactly according to plan. I bought into the deal in January of 2024 and I was told my portion of the profit from rent would be paid to me starting in March of 2024 (supposed to be about $300 / month). As of this writing (7-19-2024), I have received no rent payments, but my appfolio does show rent being paid every month. My coordinator (who is now a new person since my original coordinator left) has said that the rent payment has not gone out to me due to an accounting audit. I have been given multiple dates as to when they expect payments to start going out, first it was March 24, then May 24, then June 24, the latest is September 24. While I certainly understand the need for a company to do an audit, particularly for the REIT, I am not sure why that would slow down or prevent rent moneys being paid for rent on joint ventures. They have expressed some issues associated with turnover in the accounting department, but they have been saying that since early to mid 2023 maybe? That line, at least from my perspective, is getting a little long in the tooth.
Life and business are complicated. Multiple things can be true at the same time. At this point, I don’t really know what to think. I desperately hope that Rad pulls through this hard time and returns to the successes associated with the investors I spoke to prior to joining. Like I said, I want this to be successful, not only for me and the other investors who feel at risk of losing a great deal of money, but for them and the people that they employ as well. I have no desire to be part of any lawsuit or liquidation event. My desire remains the same as it did when I joined, to try and build something with a partner that I can trust to improve the lives of my loved ones. That being said, I could not, in good conscience, recommend RAD to anyone such that it is today. I am not calling them a scam, but based on my experience up to this point, they are not in a position right now to provide the customer experience necessary for the associated 50k fee to join. If that changes in the future, and I really hope it does, I will be the first to publicly alter my opinion and report it out to all of you.
I will close by saying, I have absolutely no inside information as to what is going on at RAD. I am not privy to their financial situation. Everything that you have read in this piece is simply my own experience with RAD inner circle up to this point.
Feel free to ask me any questions that you may have and I will do my best to respond to them.
