Ashcroft capital - Paused Distributions
Member since 2020 · 9 posts · 8 votes
Ashcroft capital - Paused Distributions
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Melanie P.Pro Member
Rental Property Investor · Member since 2023 · 1k+ posts · 922 votesI guess there are about 20 suckers born every minute. Every one of you in this is an accredited investor, right? A two-second glance at their materials reveals that when they distribute funds from a property sale one of the categories is: unpaid distributions. This has been the plan since the start.
Investing in real estate is not that hard. I can't imagine what would make anyone put their money into one of these things. Pure laziness I guess. TBills are paying over 5% if you need lazy guys. No need for this nonsense.
248 Replies
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Chris Seveney:
Quote from @Carlos Ptriawan:
Quote from @Paul Azad:
Chris, agreed, investors need to do far more due diligence. I have many friends who just invest on "word of mouth" or "projected IRR of X%"
Folks should have more Caveat Emptor in 'em
it's just almost impossible in practice, we have to outsource OR pay for someone to do due diligence that's what I've been thinking
Whats crazy is most of the time you DO NOT have to pay. There are a lot of broker-dealers who work in the real estate space and will do the due diligence for you and recommend several offerings. They get paid by the sponsors. Now someone may think well the broker-dealer is in bed with the sponsor. Well not really because if the deal goes bad the B-D will get a bad rap and they make their living that way, so they do not want to back a slow race horse.
true, but what I found is if you collect 5 broker dealer and/or senior investor to analyze multiple offering, they all would come up with different conclusion. the broker dealer is also not smart when it comes to market risk --but they could be good in particular location/building analysis.
Also I found like when a group of AI or alumni AI is collecting funds to create SPV, even what they analyzed as "good sponsor", the investment is still far from expectation during rate volatility phase like today.
To be extremely honest..........just investing at Interval Fund/CEF or Alt Investment from Schwabb was way easier than invest at unknown GP that invest in Class B Sunbelt. LOL it's just too much work for mediocre result.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Jay Hinrichs:
Quote from @John Teachout:
Lots of Monday morning quarterbacks in this thread. Some have no idea what they're talking about. Returning to the original post, we are invested in Ashcroft Value Add Fund #2. They did stop distributions some months ago. They recently sent out an update indicating it was unlikely there would be any distributions in 2024 and likely not in 2025 until a capital event takes place (re-fi or sale) We are involved in other syndications and most of them have paused distributions. One recently restarted distributions and one fund we're in never stopped. That said, we're currently investing in a new syndicated fund (new build apartments) and are optimistic it will perform as expected.
John,
Out of sheer curiosity why all of a sudden all these projects we are now hearing about distributions stopping when they were ginning along just fine for a few years or many years.. they all could not have had an adjustable rate loan that adjusted basically at the same time.. I mean renters are still paying right .. OR are these MF all of a sudden having vacancy issues.. I get that some of them might have 5 year notes coming due and they were never underwritten for interest rates rising at all or as much as they have . Your thoughts or the reasons behind this that the GP s might have imparted on you ?they stopped distribution because they want to save cash as their debt service payment increased twice, that's what usually happened.
But there's another project of GP fund too that they ask for capital call after 2mil plumbing issue lol - 2yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @John Teachout:
Lots of Monday morning quarterbacks in this thread. Some have no idea what they're talking about. Returning to the original post, we are invested in Ashcroft Value Add Fund #2. They did stop distributions some months ago. They recently sent out an update indicating it was unlikely there would be any distributions in 2024 and likely not in 2025 until a capital event takes place (re-fi or sale) We are involved in other syndications and most of them have paused distributions. One recently restarted distributions and one fund we're in never stopped. That said, we're currently investing in a new syndicated fund (new build apartments) and are optimistic it will perform as expected.
new construction is great, DLP has a few, origin, arixa. they are debt funds not equity funds but great idea. they co develop with builders and developers like us to push higher returns to the funds.
Section 8 Launch52 Reviews - 2yJustin KurpiusPro MemberRental Property Investor · Member since 2017 · 84 posts · 41 votes
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
Any economic book that does not base its material on “Modern Monetary Theory”. The world is about to experience the pain of reverting to the mean. What goes up must come down. View every Warren Buffett quote
- 2yJustin KurpiusPro MemberRental Property Investor · Member since 2017 · 84 posts · 41 votes
Quote from @Bryan H.:
Quote from @Carlos Ptriawan:
Quote from @Chris Seveney:
Quote from @Carlos Ptriawan:
Quote from @Account Closed:
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.
70/80% of syndications are in trouble in 2024. Especially if they have multiple portfolio in asset structure.
You would lose money 100% for sure. What we don't know whether you lose 50% or lose 100%.actually you can lose MORE THAN 100% if they took accelerated depreciation, you may end up owing more than your investment. That happened I believe on those houston deals.
Another way they are doing it is by creating next series of fund , like ponzi, the next fund investor is subsidizing the asset of previous fund.
or the most brutal way is basically bankrupt the current LP, and buy again the same asset from the lender with new cap with the new lpConsidering the current real estate environment and the frothy stock market, I’m considering taking a fairly large position in a diversified debt fund (notes) like offerings by PPR Capital (10% dividend, 1 year hold) https://pprcapitalmgmt.com/strategy/
and would like opinions on comparing risk for something like this vs syndications and other alt investments. To me the notes seem far less risky with the pretty large geographically diverse holdings, but am I wrong about that? What is the black swan event to worry about? How can I lose my money?
Consider a preferred stock fund while waiting out the rough times. Ticker symbol PSK. Pays a juicy 6.21% dividend and has a decent expense ratio of .45%. Distributions paid monthly.
- 2yJustin KurpiusPro MemberRental Property Investor · Member since 2017 · 84 posts · 41 votes
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @Christie Gahan:
Quote from @Carlos Ptriawan:
Quote from @Bruce Lynn:
I've never invested with Ashcroft, but I think they had a good product/concept for certain investors. Hopefully ones that were still working and not depending on cash flow. I've studied 100s of offerings, probably 300 or more. I think they are probably as good of an operator in the space that they play as any. My guess is most operators are suspending monthly/quarterly payments right now, either because they have to, or it is the prudent thing to do to keep the deal moving forward. Very tough to tell today what the next rate cap might be, what the refinance interest rate will be, where cap rates will end up, and so many other financial decisions. You probably don't want them to pay distributions today and then get caught upside down in a year and either be forced to do a capital call in a potential recession, or not be able to raise needed capital call, pref equity, or refinance because they don't have the right stack. No one predicted the huge jump in interest rates and rate caps, so great operators want to be conservative moving forward.
This I disagree.
If one is reading any simple macro economic book, when CPE is jumping 40% on June 2021 we know the party is over and the Fed would raise the interest rate but may be late because they use laggard indicator (because they're lazy and dumb).
Sorry but the Fed is dumb , and the GP is even dumber, there's this GP school that's asking their student to raise capital using floating debt with bridge financing (in my opinion, it's suicidal). But the LP is the dumbest after all. At very least, the GP would eat your money through acquisition fee and annual fee LOL, but it's the LP that lost everything.
Sorry for you guys, as everyone is too dumb to even read basic economic principle. Sometimes not too invest is best thing to do. In July 2021, I sold some of my properties at highest price. GTFO.Can you reccomend a book on economics for non grad school types?
The Wealth of Nations, Adam Smith
One of the most essential economics texts, The Wealth of Nations forms the underpinning of much of modern economic theory.
Capitalism and Freedom, Milton Friedman
Milton Friedman's iconic work argues that economic freedom is essential to a free and liberal society. Published in 1962, many of Friedman's theories presented in Capitalism and Freedom have since been adopted worldwide.
Freakonomics, Steven D. Levitt and Stephen J. Dubner
Freakonomics is a crash course in the populist application of economics.
The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg
Steven argues economics can be boiled down to four words: people respond to incentives. The book gives a good introduction to the so-called “Chicago school” of economics.
Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, Ray Dalio
Legendary investor examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes.
These above are a good basic starting point to gain fair foundational comprehension.when there's broad changes in interest rate (not just because of central bank rate changes, but also currency depreciation, overnight changes of currency rate, tightening standard of lending, or due to inflation), the first hit is always in banking sector and real estate commercial space, this happened in latin america in 1980 and asia too in late 90 ; in reality, commercial space could only develop during the first wave or major economic expansion (like in China during 2000).
Even before covid, during 2020 we see commercial cap rate at 3 to 4, lucky if you see 5 ; there's almost no way investor could make money as upside is very little as wage growth is minimum. Combine this with long term boom bust cycle, plus inflation, what happen today is not unexpected. Now most GP try to do refi and buying time so to speak, in speculation that Fed would reduce rate to 75 bps. Still saying they're bit optimistic. It's literally naive investor money is being thrown away. GP would still recover from all of these, they can raise new fund, create new company or even create new hype (like Adam's Neuman wework dotcom).Ok.... Let me interject a different line of thinking here. I'm going to try and take this conversation from black 7 white, into "Technicolor" and see if vision in this full spectrum doesn't help reframe some mindsets.
Q: What year did the 401(k) come into existence?
A: Nov 1978. So, for argument sake, let's say 1979 because that's really the first year of it.
So knowing the obvious, that such a thing takes an industry some time to adopt into it's actions.
Q: What did the stock market do for the previous 15 years, before 401(k) "gimmick" started?
A: Down. Down BIG time. No, not just big, Mt Everest BIG time. DOW from 9k in '66' all the way too 3k's when 401(k) was introduced.
Q: And then what?
A: Things kept going down, until..... By mid '82' thing's changed direction. Oh how they changed direction. From '82' too 2000 (yes you read that right) was a bull-run unlike ANYTHING EVER seen before, touching on 20k.
What changed?
Yes, post WWII there was a very similar bull-run, because of the obvious down from WORLD WAR, and the obvious rally from NO WORLD WAR and the bizonkers commerce explosion that rebuilding from WORLD WAR made. But this, '80's, '90's, there was nothing remotely close to that..... so what changed?
And for nearly a decade things held in the range.
Even '08' was not able to bring things below 10k....... Total global financial system meltdown, and result was nearly 4x market $ of early 80's..... How?
And post '08', which duration of '08' on chart's now looks more like a sneeze in it's duration, but what after? Another bull-run tapping on 40k. FOURTY THOUSAND! Think on that, 16X early 80's! Did 2021 feel like 16X the commerce from '82'? Did incomes feel 16X? Did all of life seem 16X MORE, bigger, richer????
What changed?
Q: Who is Wall Street???? Who is "The Stock market"????
A: TRADERS!
It's honestly that simple, all boils back to this simple fundamental. Wall Street is TRADERS.
Q: Why are they called TRADERS?
A: Because they TRADE!
The greatest delusion ever pulled off in human history thus far is the notion that $ goes to Wall Street to INVEST, to GROW, to RETURN, to PROFIT......
NO! $ goes to Wall Street to TRADE.
Traders trade. That is there singular purpose in existence, everything else is ONLY to facilitate or in part and parcel to that purpose.
When 401(k) happened, it was a GIANT fire-hose of not just NEW-$ to Trade, it was DUMB-$ to boot! $ that was ignorant of the system, because it was from the average John/Jane Doe who were knowledgeable and informed on everything involved in there sphere of life, in REAL life, groceries, fixing a mower, there job's, raising kid's, LIFE, not trading.
And Middle America was sold a dream. The dream of secure a financial future by trusting traders. They called it the American Economics machine, they called it this that and the other but NEVER once did they call it exactly what it is, TRADING.
And Generations were brainwashed into this blind trust, as traders honed there craft on how to maximize what they do, TRADING, to profit as maximally as possible, on this ignorant-$.
And an entire universe was built in the financial industry. A universe of gaining gargantuan wealth, via ignorant-$. The Wolf of Wall Street was born of this paradigm shift, Bernie "the bastard" Madoff was it's love child given unto the world.
Previous to all this, Wall Street, "Trading" was a boring, slow, slodge of those who as saying said wore ties so it would be more expedient when choose to hang themselves. it was nothing, NOTHING like the verse it became.
Today, we see the exact same expression in syndications. Since pandemic "ignorant-$" went throwing itself around, it is any surprise some Traders went and got into real estate?
Lazy $ get's abused, always has, always will.
This is the REALITY of the world. A market open for ignorant $, will abuse and neglect the vast majority of it. Don't believe me, just visit a Walmart and ask the Senior greeting people at the door how there 401(k) worked out for em.
I know how it worked out for Klaus.
U think interest rates going down from 1980 to now had anything to do with the frothy stock market? Interest rates down, risk assets up. Btw - nothing was fixed after 2008. If it was fixed, stocks would have went much lower. All we did was print more money / driver interest rates even lower
- 2yJustin KurpiusPro MemberRental Property Investor · Member since 2017 · 84 posts · 41 votesDo u even lawyer?
Quote from @Scott Carpenter:
Hi, I'm Scott Carpenter, a reporter at Bloomberg. I'm working with some colleagues to tell the story of how real estate and multifamily syndications didn't work out as advertised for many investments made during 2021 and the first half of 2022, before interest rates took off. I'm especially interested in firms like GVA or Tides Equities (also Ashcroft). If you've invested with them or someone else, and things didn't work out or they'll still kind of rocky, let me know! DM me please!
- Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes2y
Quote from @Paul Azad:
John are you only invested in Multi-Family syndications or other classes like office/retail/self-storage/mobile-home/industrial etc? and if so are those classes having distribution suspensions as well?
As far as real estate goes, for the syndicated investments we're only in value add multi-family. We also have mineral acreage which is a type of real estate at the core but that's an oil/gas investment in my opinion. We also have a portfolio of single family rental homes that we operate ourselves and it's in our attempt to get more passive that we went into the syndications. In retrospect, we purchased most of the syndicated investments at the worst possible time. But no one could have known the interest rates would go up that far that fast. These investments usually have very short term debt and often times it's floating. - Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes2y
Quote from @Jay Hinrichs:
Quote from @John Teachout:
Lots of Monday morning quarterbacks in this thread. Some have no idea what they're talking about. Returning to the original post, we are invested in Ashcroft Value Add Fund #2. They did stop distributions some months ago. They recently sent out an update indicating it was unlikely there would be any distributions in 2024 and likely not in 2025 until a capital event takes place (re-fi or sale) We are involved in other syndications and most of them have paused distributions. One recently restarted distributions and one fund we're in never stopped. That said, we're currently investing in a new syndicated fund (new build apartments) and are optimistic it will perform as expected.
John,
Out of sheer curiosity why all of a sudden all these projects we are now hearing about distributions stopping when they were ginning along just fine for a few years or many years.. they all could not have had an adjustable rate loan that adjusted basically at the same time.. I mean renters are still paying right .. OR are these MF all of a sudden having vacancy issues.. I get that some of them might have 5 year notes coming due and they were never underwritten for interest rates rising at all or as much as they have . Your thoughts or the reasons behind this that the GP s might have imparted on you ?
Syndications actually were affected all at the same time. As interest rates shot through the roof some had floating debt that increased payments immediately which required using most of the cash flow. Others had a cap rate in place (short term) and realized that the next cap rate cost was going to be considerably more so they started hoarding cash. Others realized that this huge interest rate increase was going to have a significant effect on the cap rates and make the intended exit plan or refi plan not viable. Some of the rehab/value add has had to be paused as there's just no cash to do it with which negatively affected rent growth and occupancy. So from my observations, the whole mess can be laid right at the feet of interest rate increases beyond anyone's wildest nightmares. - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @John Teachout:
Quote from @Jay Hinrichs:
Quote from @John Teachout:
Lots of Monday morning quarterbacks in this thread. Some have no idea what they're talking about. Returning to the original post, we are invested in Ashcroft Value Add Fund #2. They did stop distributions some months ago. They recently sent out an update indicating it was unlikely there would be any distributions in 2024 and likely not in 2025 until a capital event takes place (re-fi or sale) We are involved in other syndications and most of them have paused distributions. One recently restarted distributions and one fund we're in never stopped. That said, we're currently investing in a new syndicated fund (new build apartments) and are optimistic it will perform as expected.
John,
Out of sheer curiosity why all of a sudden all these projects we are now hearing about distributions stopping when they were ginning along just fine for a few years or many years.. they all could not have had an adjustable rate loan that adjusted basically at the same time.. I mean renters are still paying right .. OR are these MF all of a sudden having vacancy issues.. I get that some of them might have 5 year notes coming due and they were never underwritten for interest rates rising at all or as much as they have . Your thoughts or the reasons behind this that the GP s might have imparted on you ?
Syndications actually were affected all at the same time. As interest rates shot through the roof some had floating debt that increased payments immediately which required using most of the cash flow. Others had a cap rate in place (short term) and realized that the next cap rate cost was going to be considerably more so they started hoarding cash. Others realized that this huge interest rate increase was going to have a significant effect on the cap rates and make the intended exit plan or refi plan not viable. Some of the rehab/value add has had to be paused as there's just no cash to do it with which negatively affected rent growth and occupancy. So from my observations, the whole mess can be laid right at the feet of interest rate increases beyond anyone's wildest nightmares.
thank you for answering me.. So I can assume them the ones with locked in non floating low interest rates are still doing OK.. other than maybe prop tax hikes ( like maybe something in Texas) or insurance rates going crazy .. I know my insurance has gone up in most cases.. Cap rate though going up means deals are going to go much longer than anticipated sounds like for those that bought in at 4 to 5 caps.. or even 3 caps on the west coast.
I still see most listings on the west coast at 5 to 6 caps.. nothing is really moving though or if they are folks are just low balling and taking the ones that will go for it.. - Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes2y
Current market conditions, especially with cap rates having risen from the low 4s to over 5-5.5%, making values of properties down ~30%.
This is caused by recent shifts 0 => 5.5% in the Fed Rate (quickest time in history). To illustrate, a property initially valued at $60 million might see its worth decrease by 30%, settling at around $45 million.
Basics on Property Evaluation:
To figure out how much your commercial property is worth, you can use the following simple math equation. You take the money you make (NOI) and divide it by something called the cap rate. The cap rate tells you what people are willing to pay for properties like yours.
So, the equation looks like this:
Value of Property = Net Operating Income / Cap Rate
Imagine your shopping center makes $100,000 a year after you pay all your costs (that's your NOI). And let's say the cap rate in your area is 0.05 (or 5%). You can figure out how much your shopping center is worth like this:
Value of Property = $100,000 / 0.05 = $2,000,000
But here's the tricky part: You don't get to decide the cap rate, it's decided by the market, kind of like how fashion trends decide what clothes are cool. If the cap rate goes up because the market changes, like from 0.05 (5%) to 0.06 (6%), even if you're still making $100,000, your property's value changes.
So with a cap rate of 6%, it looks like this:
Value of Property = $100,000 / 0.06 = $1,666,666.67
Even though you're making the same amount of money, your asset's value went down because the cap rate went up. It's important to remember that you have control over making your shopping center nicer and more profitable, but you can't control the cap rate, which can make your property's value go up or down without you changing a thing!
It's a sobering situation that no one has faced since 2009 faced with it firsthand. The stark reality is that a 30% market downturn, again caused by an unprecedented surge in interest rates – the highest in four decades – can profoundly affect market values. Such a scenario doesn't just bring values down by 30% but also places substantial pressure on property holders, especially when debt refinancing looms on the horizon, compelling action at these reduced market values.
Here is the double whammy that increases the cash in refinance needed, the capital markets (bank lending) terrain has tightened greatly. Banks, previously granted loans at 70% of the property's value, are now capping at 50%. This adjustment demands a greater cash input at the point of refinancing. This is the debt renewal tidal wave everyone is talking about.
From a personal perspective, this period has been particularly taxing. Having invested significantly alongside our investors, often being among the first to contribute when things got difficult. Witnessing the dissipation of substantial (multiple seven figures) personal capital, especially in efforts to steer through these turbulent times, has been a sobering experience. It became very apparent in Q4 2023 as the market cap rates continued to deteriorate even more as pricing has not found a firm ground.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
Quote from @Account Closed:
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.
Curious its been five months, what is the update?
7e investments53 Reviews - Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes2y
This things is the epitomy of do as I say, not as I do. I say, do whatever you want (legally), and worry about your own little economy; not theirs. One cannot control theirs, but with some time, energy and a little luck; one can control theirs.
- Rental Property Investor · Hohenfels, Germany · Member since 2018 · 70 posts · 42 votes2y
It depends on which fund you are talking about. I'm in AVAFII and they stated the hope to start distributions again in the fall. I have a friend in AVAF III and it is paying as scheduled.
This is one of the more reputable companies, I'd rather they pause then do a capital call. A lot of syndication haters on here for some reason.
Quote from @Chris Seveney:
Quote from @Account Closed:
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.
Curious its been five months, what is the update?
- Investor · Member since 2019 · 74 posts · 70 votes2y
Curious its been five months, what is the update?
For Ashcroft and other investments, I'm seeing refinancing and sale of the properties. For one refinanced the property, they caught up paused preferred returns and restarted monthly distribution. For the sold property, the overall return is within the expected return range, lower than what I was expecting, but still positive return.
Given that the interest rate and rate cap have been trending down, I expect there will be more properties being refinanced with more permanent debt. and it will change the overall return profile.
- Investor · Lafayette, CO · Member since 2016 · 30 posts · 16 votes2y
We are in Ashcroft fund #1...Yes, they paused distributions but the over arching concern going forward (if you invest with them in future funds) is why they did not spread out the 3 yrs floating rate loans when they bought all the properties for this Fund....So now all 7 or 8 properties are coming due in 2024....Ouch!...this could be painful for everyone involved. Huge risk for Lp's and Gp's by not spreading out the refi timeline. Rate increases or no rate increases, it's very tight and very risky. Hopefully the coming Cap calls will help all of us pull out of this dive!....Hold On!
- Investor · Lafayette, CO · Member since 2016 · 30 posts · 16 votes2y
We are in Ashcroft fund #1...Yes, they paused distributions but the over arching concern going forward (if you invest with them in future funds) is why they did not spread out the 3 yrs floating rate loans when they bought all the properties for this Fund....So now all 7 or 8 properties are coming due in 2024....Ouch!...this could be painful for everyone involved. Huge risk for Lp's and Gp's by not spreading out the refi timeline. Rate increases or no rate increases, it's very tight and very risky. Hopefully the coming Cap calls will help all of us pull out of this dive!....Hold On!
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes2y
Pay cash, cash is king. Then you can place debt when it is advantageous to you and the property versus an asset hitting a certain stabilized point, economic point, or debt point in a cycle to work.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
Quote from @Scott Rye:
We are in Ashcroft fund #1...Yes, they paused distributions but the over arching concern going forward (if you invest with them in future funds) is why they did not spread out the 3 yrs floating rate loans when they bought all the properties for this Fund....So now all 7 or 8 properties are coming due in 2024....Ouch!...this could be painful for everyone involved. Huge risk for Lp's and Gp's by not spreading out the refi timeline. Rate increases or no rate increases, it's very tight and very risky. Hopefully the coming Cap calls will help all of us pull out of this dive!....Hold On!
What is interesting here on BP is the comments regarding some of these syndicators. A lot of talk about ashcroft pausing distributions, but not much blowback, so my assumption is they are communicating with investors on what the plan is. Compare this to other sponsors on here who are getting completed roasted, and it comes down to them being smaller, not communicating and appear to be focused on their next fund and not the ones they have.
Just my opinion of what I am seeing here on BP. Like any type of not so good news, there are ways to deal with it, and those that deal with it better typically end up better off in the long run
7e investments53 Reviews - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Chris Seveney:
Quote from @Scott Rye:
We are in Ashcroft fund #1...Yes, they paused distributions but the over arching concern going forward (if you invest with them in future funds) is why they did not spread out the 3 yrs floating rate loans when they bought all the properties for this Fund....So now all 7 or 8 properties are coming due in 2024....Ouch!...this could be painful for everyone involved. Huge risk for Lp's and Gp's by not spreading out the refi timeline. Rate increases or no rate increases, it's very tight and very risky. Hopefully the coming Cap calls will help all of us pull out of this dive!....Hold On!
What is interesting here on BP is the comments regarding some of these syndicators. A lot of talk about ashcroft pausing distributions, but not much blowback, so my assumption is they are communicating with investors on what the plan is. Compare this to other sponsors on here who are getting completed roasted, and it comes down to them being smaller, not communicating and appear to be focused on their next fund and not the ones they have.
Just my opinion of what I am seeing here on BP. Like any type of not so good news, there are ways to deal with it, and those that deal with it better typically end up better off in the long run
for ashcroft the story is that they tried to buy cap from catham but failed hence stopped distribution since Q3 last year, they try to maintain liquidity.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @Chris Seveney:
Quote from @Scott Rye:
What is interesting here on BP is the comments regarding some of these syndicators. A lot of talk about ashcroft pausing distributions, but not much blowback, so my assumption is they are communicating with investors on what the plan is. Compare this to other sponsors on here who are getting completed roasted, and it comes down to them being smaller, not communicating and appear to be focused on their next fund and not the ones they have.
I think really the key to answer the status of those syndication is if we have AI that can do sophisticated intel and ask something like these :
Hey ChatGPT, what is the current occupancy and DSCR of Apartment at 123 Main St, PA 11222 ?
Are they paying their mortgage ? :) - Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes2y
You can do that with a subscription of Yardi or CoStar... trouble is it costs 5-20K. A lot higher than your BP subscription and a turnkey rental property downpayment.
- Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes2y
We haven't received any cash calls from any of our syndication investments "yet". At this point, with the amount of threat there is to the multi-family market, I'd be inclined to refuse as it may be "throwing good money after bad". I don't have the same level of confidence in the inflation rate dropping and the fed lowering rates as many people do. I think there's going to be a lot more financial pain ahead as the results of the massive spending of the last several years hasn't had its full impact yet. Buckle up boys and girls.
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
yep, am still waiting for ChatGPT to be able to tell me what the condition of every single sewer line in Pittsburgh is.
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