Ken McElroy and MC Companies Total Loss on 50+ Million Dollar Property
Thought it would be worth letting the community know what is happening over there.
Invested in their fund in 2022. Given the unusual environment of near zero interest rates, knew there could be choppy waters ahead with rising interest rates coming soon. Given the level of uncertainty at that time, I gave the bulk of my investment money to the guys whose entire reputation is that of veterans who can navigate choppy waters and difficult environments. Their entire social media presence is discussing what the "other" syndicators did wrong during this time and how they know better from experience.
Investors just received a letter stating of the 2 properties, BriarCrest has been taken back by the bank and is in forced sale situation. This is a total loss of all investor capital in this property which is about 2/3 of the value of the fund. The other property is not and has never made distributions so not looking good there either. Ross McAllister, stated these deals were "too aggressively underwritten". Of the 4 syndications I invested in at the time this is the only one that performed poorly. The 3 others are all making distributions and performing as expected so this is not just a matter of everyone having trouble from the rise in interest rates from that time - which by the way is their stated specialty and the primary reason to invest with them.
They also have just recently announced a merger and name change. Given the timing one has to wonder if this suggests financial issues and/or possibly obscuring a total loss on the record.
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- Rock Star Extraordinaire
- Northeast, TN
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Ouch. Sorry to hear that for you, but considering how syndications have been going lately you are probably fortunate that 75% of your investments are performing.
- JD Martin
- Podcast Guest on Show #243