Did Brandon Turner really lose $14M of investor money while pocketing $4.4M???

Question

I've been starting to hear rumors that Brandon Turner's company Open Door Capital has been losing a lot of investor money. I haven't really followed what he's been up to since he left BiggerPockets, but since I started hearing all of these rumors about mismanaged money and poorly performing investments, I started to look a bit into it.

Below is what Google/AI had to say about the "Heights on Katy" deal in Houston, Texas. Apparently the GP's pocketed $4.4 million while losing $14 million investor dollars on the deal.

Anyone have any more insight into this deal / or others Brandon Turner's got going on? I don't know how reliable what Google/AI says below is, so I'd like to hear from folks that have more 1st hand info.

Is there fire behind all of this smoke?

Chris Seveney · Answer

@James Wise that's what I am curious about - how many single family deals did he do in his career?

curious if he was riding coat tails of podcast like many do.

if I was an investor and lost $ on a deal nothing infuriates me more than seeing Facebook ads promoting training courses - shouldn't focus be on trying to pay back your investors (of course if you already milked the deal upfront and get paid then many will let investors lose their money.)

James Wise · Answer

Shortly after I created this thread, an investor who wishes to remain anonymous, sent me a link to the following article written by a guy named Barry Minkow.

When the SEC Looks for Ways Not to Do Cases, the End Result is: Open Door Capital, Disrupt Equity, and the Heights on Katy $76M Disaster

Shiloh Lundahl · Answer

@James Wise I don't think Brandon's story isn't too unique right now. in 2020, 2021, and 2022 a lot of people were getting into multifamily investing. The evaluations were based on cap rate. Lots of people purchased multifamily and other larger projects during that time with the planned exit to refinance at 4%, 5% or 6%. The problem that I'm seeing right now is that the market has pulled back and is more hesitant to invest in real estate, making values go down. Additionally, with higher interest rates, it's keeping a lot of refinances from happening.

I'm not involved in this syndication so I don't know all of the moving parts or the expenses. But what I do know is that when people's expectations aren't met, they get pretty upset and then their mind goes to how they were swindled, or scammed, or how the person in charge didn't do their job.

I've met Branden and his family several times. There's a big difference between him and someone like Clayton Morris. I think Brandon is genuinely honest and has a lot of experience and connections in several areas of real estate. However, I don't think that he's at the level of someone like Ken McElroy, who lives in breathes multifamily real estate investing. But I also know that Branden is well connected with a lot of people like Ken and therefore has a lot of help and support when it comes to breaking into the multifamily market.

So I think that there may be some people trying to attribute nefarious reasons to a situation that may just be attributable to market conditions.

James Wise · Answer

Regardless of what did, or did not, actually happen with Turner's company. Regardless of the accuracy of the accusations of that article. If an investor sees that any sponsor is getting paid $4.4M up front, they've got to assume the absolute minimum amount of scrutiny went into the underwriting on the deal. That's just common sense.

James Wise · Answer

Well if what the article says is true, it looks like his path was

1. Buy some SFR's.

2. Get on a popular podcast.

3. Use the name recognition from the podcast to get investors to invest enough money with him so that he could use their money to pay himself $4.4M to buy large apartment buildings with their money.

Alan F. · Answer

There's been several threads, here on the forum, about ODC.

Stuart Udis · Answer

Isn’t he offering courses now? If you can't do, teach…

Alan F. · Answer

True Dat, but common sense ain't always common.

Chris Seveney · Answer

Barry Minkow posts videos online about reg d syndications. He went to prison for embezzlement and now tries to expose bad actors. I think some of his stuff has some legs to it but not all of it. Not sure if this one does or does not, but when I was a member of a mastermind group BT was in ,a lot of people had invested with him and there were deals that were going really bad.

Out of curiosity, does anyone know what his investing journey was - when BP started I thought he was investing in rural single family BRRR properties. Curious what his path was to go from SFR's to larger MF properties.

Did Brandon Turner really lose $14M of investor money while pocketing $4.4M???

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