ABC Capital in Philadelphia and Baltimore not paying rent
I own a handful of properties with ABC Capital and Jay Walsh in philly. I have owned them for about 3 years.
They stopped paying rent to me near the beginning of the year. They would still collect rent, but not pay it out to the owner. It’s September and I just got paid a portion of March and April’s rent’s. Though even those payments are not complete and portions are missing. I had to chase and text and email a lot to get them. What is most disturbing is that Jay doesn’t argue that he owes; he just doesn’t pay until you chase him for them. It’s almost as if he was relying on people not noticing that he hasn't paid.
I suspect the reason for this is that they have been planning to get out of the property management business for a while (which they just did). The flipping is much more lucrative and less work for them. And so they basically stopped paying rent to some owners until folks chased them for it. Why would they care? Since they are transferring PM duties, they only make money from people buying new properties. I have not bought from them for close to 2 years.
I have heard this now from around a half dozen people. The question is what were they doing with the rental money they collected? Surely they were not using that rental money for flipping other properties (that would be illegal)?
Stay tuned and I will post the actual performance of properties I've owned over a number of years (in a separate post). ABC capital and Jay advertise a really high cap rate. Of course only the historic performance is fact, the rest is spin and marketing. My historic performance data don’t paint the same picture as what they advertise. The vacancy rates and delinquency were much higher than advertised. And the rents that tenants paid dropped much lower after the first year. I will provide the data in another post about that...