Ashcroft capital - Paused Distributions

[Evan Mitch]

Anyone else getting notified this morning of paused Ashcroft distributions due to refinancing issues? 

We have been working on refinancing the asset in order to access the equity and create liquidity to earnestly restart the renovations. The new lender we initially signed up with for the refinance notified us that they would not be able to provide the new loan at the agreed upon terms due to current market volatility.

We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months. To remain conservative with liquidity and continue increasing NOI through unit renovations, we are pausing distributions beginning this month. Your preferred return will continue to accrue and will be paid at the next capital event, or when cash flow allows.

While distributions are on pause, we are not collecting its asset management fee and Birchstone Residential is collecting a reduced property management fee.

[Melanie P.]

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

You ever meet someone at the cigar shop or country club, clearly very successful and they told you, "I'm just so thankful I learned about Big Larry's Foolproof Apartment Syndications? 

TBills are paying 5.6% right now. No need to take huge risk for minimal reward. Haven't people seen "Boiler Room" or any of the movies about Madoff? Wolf of Wall Street? I just don't get what is in someone's head who is good enough with money to be an accredited investor but they send money off to a slick telemarketer with a fancy website.

[Justin Goodin]

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

[Melanie P.]

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

[Carlos Ptriawan]

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

Twitter is now full of LP lost money with apt running at 0.6-1 DSCR LOL

[Carlos Ptriawan]

Quote from @Melanie P.:

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

Correct, I would guess when average market reading is showing cap rate 5 then 40% of people involved in commerial real estate should just switch profession. They only need property management.

Not first time I heard folk decide to "shift sectors". 
There's just almost no more upside.

[Carlos Ptriawan]

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

I am wondering which bridge lender going to collapse this year.

[Melanie P.]

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

Correct, I would guess when average market reading is showing cap rate 5 then 40% of people involved in commerial real estate should just switch profession. They only need property management.

Not first time I heard folk decide to "shift sectors". 
There's just almost no more upside.

 There's always a floor somewhere in real estate if you look hard enough. Right now the floor seems to be in developing public private partnerships to get quality affordable housing built. Whoever figures out the formula will own a lot of real estate paid for by the taxpayers.

[Melanie P.]

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

I am wondering which bridge lender going to collapse this year.

 LOL most bridge/HMLs are one or two bad deals away from collapse. They get off the phone with an applicant and the money scramble begins. 

[Carlos Ptriawan]

these are inside one of the non-bank lender book that consist of 40 multifamily:

LP money is gone with those DSCR LOL

[Carlos Ptriawan]

so value add / renov could only enhance the cap by 0.5 ; while 100 bps increase of 10Y is decreasing DSCR by factor or -0.15 to -0.3

I am saying both the GP and lender underwriter are crazy loaning project with such desperate high LTV/low DSCR LOL not to say the UW is suicidal , but at least GP would made some money.

It's just crazy, both lender and LP is crazy because they don't understand math. I'm scratching my head....

[Carlos Ptriawan]

Quote from @Melanie P.:

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

I am wondering which bridge lender going to collapse this year.

 LOL most bridge/HMLs are one or two bad deals away from collapse. They get off the phone with an applicant and the money scramble begins. 

 so I read even office syndication that has 95% occupation and met their projection (they are good operator because they use fixed rate) can't sell their asset because buyer is available but bank doesn't give commitment.

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

Correct, I would guess when average market reading is showing cap rate 5 then 40% of people involved in commerial real estate should just switch profession. They only need property management.

Not first time I heard folk decide to "shift sectors". 
There's just almost no more upside.

 Lol, what?! 

I read this 3 times because I was sure i am reading it wrong given fact what your saying is the exact opposite of reality...... 

You BUY when there's blood in the streets..... This is the "law" is it not???? 

All this talk of CRE issues is getting me giddy, GIDDY! There is mountains of upside out there, MOUNTAINS.

If all you all see is troubles...... 

[Bruce Lynn]

Quote from @Chris Webb:

Elevate syndication deal... this after they asked LPs for $100k in December. 

I remember when this guy knocked on the door of a foreclosure I was selling and handed me a card indicating he was selling roofing.  I knew there was something wrong when I got an apt pitch from him years later.  Not to say people can't upgrade, but my first thought was, my roofer is pitching syndication deals and to top off his bad luck the bellman at a hotel I was checking in also hit me up the same month when he found out I was an investor.  I thought to myself when the roofer and the bellman are pitching me deals, it's time to head towards the exit.

[Chris Seveney]

@Bruce Lynn

Similar story in mid 2000’s when the company I was working for had a Miami office and were a very large (ENR top 25) GC. Kids out of college were getting funding to build $50M condos and they had no experience. The owner realized “we are stopping taking any more condo contracts” because he had foresight to see what was coming - and he was correct.

[John Morgan]

This is just the canary in the coal mine with syndications unless the Fed drastically lowers interest rates, which I don’t see happening the way the economy is turning around. Lending has changed in the last year and syndicators are getting burned. It’ll be a rough few years for them due to the numbers not working. This is why I stick with single family buy and holds. Much more predictable and controllable.

[Melanie P.]

Quote from @John Morgan:

This is just the canary in the coal mine with syndications unless the Fed drastically lowers interest rates, which I don’t see happening the way the economy is turning around. Lending has changed in the last year and syndicators are getting burned. It’ll be a rough few years for them due to the numbers not working. This is why I stick with single family buy and holds. Much more predictable and controllable.

The Fed has made clear they will not lower rates more than 75 basis points over all of 2024 and that is if everything stays in check. The government made a conscious effort to devalue our currency, took it too far and now they've got to suck some money out of this economy. We still have not seen the full impact of the minimum wage increase in prices and inflation is gonna stay high until it's priced into every point in the economy, 

[Melanie P.]

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Melanie P.:

Quote from @Justin Goodin:

Quote from @Evan Mitch:

 I've never invested with Ashcroft, but it's clear you have picked a strong and experienced sponsor team to invest with. Pausing distributions is not necessarily a bad thing. You should be thankful that they provided you with a well defined reason and provided context to what is happening with the investment. Every sponsor does NOT take the time to do this. 

If Ashcroft is pausing distributions on this asset, I'm certain it's the absolute best decision and in the best interest for the investors.  

If you have no experience with the company what makes you "certain" that they made the "absolute best" decision?

Did you miss the part about using $18 million of capital from the investor's pockets they stopped remitting to in order to purchase a rate cap in order to get another investor to take a 20% interest in the project away from all the LP investors. As things stand those who sent them money might get back the bare minimum return if the asset sells one day. They have zero upside on their money and lost use of it for years and years.

What information are you privy to that gives you such great confidence in these wonderful decisions?

 I hope everything works out for you buddy!

I'm a woman, I would never send money to something like this. Are you crazy? This is stuff for men who are both greedy and lazy. I think they even have a term for it in their boiler rooms.... "Don't pitch the *****!"

I am wondering which bridge lender going to collapse this year.

 LOL most bridge/HMLs are one or two bad deals away from collapse. They get off the phone with an applicant and the money scramble begins. 

 so I read even office syndication that has 95% occupation and met their projection (they are good operator because they use fixed rate) can't sell their asset because buyer is available but bank doesn't give commitment.

That's wonderful news!! I love it when nobody can get financing. 

[John Morgan]

Quote from @Melanie P.:

Quote from @John Morgan:

This is just the canary in the coal mine with syndications unless the Fed drastically lowers interest rates, which I don’t see happening the way the economy is turning around. Lending has changed in the last year and syndicators are getting burned. It’ll be a rough few years for them due to the numbers not working. This is why I stick with single family buy and holds. Much more predictable and controllable.

The Fed has made clear they will not lower rates more than 75 basis points over all of 2024 and that is if everything stays in check. The government made a conscious effort to devalue our currency, took it too far and now they've got to suck some money out of this economy. We still have not seen the full impact of the minimum wage increase in prices and inflation is gonna stay high until it's priced into every point in the economy, 

I agree with you 100%. And housing affordability is a major factor in CPI which they want under control, especially in an election year. With this extremely low inventory of homes we have, lowering the interest rates will only stoke the housing market again which the Fed definitely doesn’t want. They need to keep the rates where they are to keep inflation around 3%, but it’s crushing commercial real estate due to current lending practices. Housing affordability is a major issue many Americans are facing right now and will be a factor in the election for people who are struggling. 

[Carlos Ptriawan]

Quote from @Chris Seveney:

@Bruce Lynn

Similar story in mid 2000’s when the company I was working for had a Miami office and were a very large (ENR top 25) GC. Kids out of college were getting funding to build $50M condos and they had no experience. The owner realized “we are stopping taking any more condo contracts” because he had foresight to see what was coming - and he was correct.

 well well well like the real dot com says as well that those GP is still in high school during 2008 crash....

but i really scratch my head knowing the lender underwriter is accepting loan with DSCR less than one.

so while GP is smart, LP is dumbest, lender underwriter is the most suicidal after all....i don't know before that it was that crazy, I thought their min. requiment was like 1.25 at very least.

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

Correct, I would guess when average market reading is showing cap rate 5 then 40% of people involved in commerial real estate should just switch profession. They only need property management.

Not first time I heard folk decide to "shift sectors". 
There's just almost no more upside.

 Lol, what?! 

I read this 3 times because I was sure i am reading it wrong given fact what your saying is the exact opposite of reality...... 

You BUY when there's blood in the streets..... This is the "law" is it not???? 

All this talk of CRE issues is getting me giddy, GIDDY! There is mountains of upside out there, MOUNTAINS.

If all you all see is troubles...... 

 basically what you say mountain opportunity is you are buying foreclosure haha like all those office building that the valuation went down 80% , or multifamily syndication that's running with dscr 0.7 LOL

thing is not everyone like to buy foreclosure that's why i read some guy is switching profession too. So lets say Fed rate is 4. Then it only makes sense to buy real property that has cap 7-8. If by 2025 we still have negative spread between 10Y and cap rate we would just delaying the inevitable

[Carlos Ptriawan]

Quote from @John Morgan:

Quote from @Melanie P.:

Quote from @John Morgan:

This is just the canary in the coal mine with syndications unless the Fed drastically lowers interest rates, which I don’t see happening the way the economy is turning around. Lending has changed in the last year and syndicators are getting burned. It’ll be a rough few years for them due to the numbers not working. This is why I stick with single family buy and holds. Much more predictable and controllable.

The Fed has made clear they will not lower rates more than 75 basis points over all of 2024 and that is if everything stays in check. The government made a conscious effort to devalue our currency, took it too far and now they've got to suck some money out of this economy. We still have not seen the full impact of the minimum wage increase in prices and inflation is gonna stay high until it's priced into every point in the economy, 

I agree with you 100%. And housing affordability is a major factor in CPI which they want under control, especially in an election year. With this extremely low inventory of homes we have, lowering the interest rates will only stoke the housing market again which the Fed definitely doesn’t want. They need to keep the rates where they are to keep inflation around 3%, but it’s crushing commercial real estate due to current lending practices. Housing affordability is a major issue many Americans are facing right now and will be a factor in the election for people who are struggling. 

this is just pure math actually and has nothing to do politics, residential is safe because we have long term 30 year gov notes. While some of our cowboy syndication has 80% LTV 5year IO only financing. The fixed rate can sustain negative spread because in residential our mortgage is fixed for forever, the short term financing with cap rate modelling just simply not working. Also in residential our valuation is modelling pure based on supply-demand-factor.

mathmatically speaking, the commercial could avoid wipeout even fed rate is hiking rate to 7% AS LONG AS their cap is at 10 ; with negative spread like today even the best sponsor is destroyed, this rentonomic is very dependent on math (and not sponsor).

[Carlos Ptriawan]

NYCB: $185 million in charge-offs from CRE loans, and a $1.9 billion increase in criticized loans.

[Carlos Ptriawan]

Quote from @Carlos Ptriawan:

NYCB: $185 million in charge-offs from CRE loans, and a $1.9 billion increase in criticized loans.

 I just read somewhere that these Multifamily expert are expecting rent growth is coming from the three million illegals immigrant hahaha lol :)

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Melanie P.:

Quote from @Calvin Thomas:

I will also be looking for deals to scoop these failed syndications on pennies on the dollar during the end of 2024 and through 2025. No outside money necessary. It's going to be 2008-2012 all over again. Rest assured, Wall Street and private money know of this too. It was a perfect trap for the inexperienced "syndicators".  

 100%. I told my husband it's going to be blood in the streets soon. Patience in deploying capital and willingness to shift sectors are key to successful real estate investing. 

Correct, I would guess when average market reading is showing cap rate 5 then 40% of people involved in commerial real estate should just switch profession. They only need property management.

Not first time I heard folk decide to "shift sectors". 
There's just almost no more upside.

 Lol, what?! 

I read this 3 times because I was sure i am reading it wrong given fact what your saying is the exact opposite of reality...... 

You BUY when there's blood in the streets..... This is the "law" is it not???? 

All this talk of CRE issues is getting me giddy, GIDDY! There is mountains of upside out there, MOUNTAINS.

If all you all see is troubles...... 

 basically what you say mountain opportunity is you are buying foreclosure haha like all those office building that the valuation went down 80% , or multifamily syndication that's running with dscr 0.7 LOL

thing is not everyone like to buy foreclosure that's why i read some guy is switching profession too. So lets say Fed rate is 4. Then it only makes sense to buy real property that has cap 7-8. If by 2025 we still have negative spread between 10Y and cap rate we would just delaying the inevitable

I'm not going to broadcast my "Secret Sauce" like a moron, but your in the neighborhood of the EPIC opportunity, just looking the wrong direction. 

I know you've followed my "stuff" for some time, so think back, I spoke on details around this coming for some time, a long time back, go year+ back. This happening was a mathematical certainty to come, no genius on my forecasting it, it's just math's.

CRE has a LOT of "pull" to get assorted bail-out's. But ask, what's tied at the hip to those in CRE of "power" but, without that "juice" to get bailed out? Those who will feel the CRE pain, but not get the pleasure of the rescue? THAT is the MOUNTAIN opportunity coming up. And I'm not the only one in the know, I have spoken with some other value-add syndicators on this that have also had it monitored on the radar for when it's "harvest time".

Big operators, "C-suite Landlords", forget em, they got "juice" to squeeze. They'll be crying out but, it's more a faint, playing a role to get the bail-outs.     Think of who will have the pain, but not the ability to escape it similarly. There not hard to find, not at all. 

[Amit M.]

For better or worse…this is turning into quite the popcorn thread ;)