I selected "Horror Stories" from the Bigger Pockets dropdown mostly because I feel like this is about to become one (just in time for Halloween? cliche but true). Please allow me to give you the backdrop to cue up the story.
In 2024 I invested a large sum as an accredited investor to Ashcroft's "Income Note". My confession is I thought I was savvy, moving up from a double-digit single family portfolio to a Note Investor in a large commercial real estate company, who seemed to be the darling child and nowhere to go but up. Who doesn't want 10+% cashflow every month?? It was great until it wasn't.
I'll leave everyone hanging on the clincher because this is an ongoing tale.
What I'd like to know is - Has anyone else invested in the "Ashcroft Income Note" or other Ashcroft related syndications? They have signed documents promising repayment, sent emails promising explanation for non-payment, and have failed to respond to multiple attempts at contact for a long time now. As of this date, the promises go unfulfilled and communication is dark
Sound scary, well syndications can be that way.
I'm looking to find other investors who may have fallen into the same trap. Please reach out if you have had any dealings with Ashcroft Capital, positive or otherwise... I'd like to talk.
I’m sorry you’re dealing with this. Having a significant investment outstanding and struggling to get answers is understandably stressful.
I found what appears to be an accompanying pitch deck online, and looks to me like an unsecured loan unless the actual investment documents establish otherwise. It describes providing “working capital” and specifically lists “operational shortfalls” and “rate cap purchases” among the uses. It also says the notes rank ahead of common equity, but that alone does not establish a recorded lien or collateral securing repayment.
I think syndicators have become increasingly clever with how they describe investments. Terms like “note,” “preferred return” and “bond” can create a sense of security, particularly for investors who associate a note with a mortgage. The label itself tells you very little about your actual protection.
It’s important to obtain the private placement memorandum, operating agreement or any note or security agreements applicable to the offering. Those documents control your rights, rather than the advertisements. Too few investors thoroughly read or understand what they are investing in.
There’s nothing inherently wrong with a fixed return or a cap on upside. Personally, when investing through an equity structure, I generally want the vehicle holding the LPs’ investment to be a direct member of the entity that owns the property, with that entity’s operating agreement clearly establishing the LPs’ repayment priority through a preferred return or distributions that substantially favor them. All investments carry risk, but it makes the connection to the property and repayment structure clearer whereas many of these "notes", "preferred returns" and "Bond's" are truly unsecured. I often see conflicting language between the underlying real estate entities operating/partnership agreements and the ability to take on senior debt.
The stated uses make this sound like rescue capital to me. Was the money needed to complete renovations and stabilize otherwise viable buildings, or to cover ongoing deficits because rents fell short of projections or operating expenses were underestimated? Those are very different situations.
Did you ever review the financials for the individual properties, leverage figures and the underlying loan terms before investing? If not, I would request them now, along with an accounting of where the note proceeds went. Understanding the portfolio’s performance, debt maturities and remaining equity would help you assess the prospects for repayment. Although failing to respond to recent inquiries is quite concerning.
I help GP's with SEC compliance as well as assist LP's with diligence and understanding investment opportunities before committing capital. Reach out in the future before making an investment, happy to assist and make sure you're adequately informed before making an investment.
I’m sorry you’re dealing with this. Having a significant investment outstanding and struggling to get answers is understandably stressful.
I found what appears to be an accompanying pitch deck online, and looks to me like an unsecured loan unless the actual investment documents establish otherwise. It describes providing “working capital” and specifically lists “operational shortfalls” and “rate cap purchases” among the uses. It also says the notes rank ahead of common equity, but that alone does not establish a recorded lien or collateral securing repayment.
I think syndicators have become increasingly clever with how they describe investments. Terms like “note,” “preferred return” and “bond” can create a sense of security, particularly for investors who associate a note with a mortgage. The label itself tells you very little about your actual protection.
It’s important to obtain the private placement memorandum, operating agreement or any note or security agreements applicable to the offering. Those documents control your rights, rather than the advertisements. Too few investors thoroughly read or understand what they are investing in.
There’s nothing inherently wrong with a fixed return or a cap on upside. Personally, when investing through an equity structure, I generally want the vehicle holding the LPs’ investment to be a direct member of the entity that owns the property, with that entity’s operating agreement clearly establishing the LPs’ repayment priority through a preferred return or distributions that substantially favor them. All investments carry risk, but it makes the connection to the property and repayment structure clearer whereas many of these "notes", "preferred returns" and "Bond's" are truly unsecured. I often see conflicting language between the underlying real estate entities operating/partnership agreements and the ability to take on senior debt.
The stated uses make this sound like rescue capital to me. Was the money needed to complete renovations and stabilize otherwise viable buildings, or to cover ongoing deficits because rents fell short of projections or operating expenses were underestimated? Those are very different situations.
Did you ever review the financials for the individual properties, leverage figures and the underlying loan terms before investing? If not, I would request them now, along with an accounting of where the note proceeds went. Understanding the portfolio’s performance, debt maturities and remaining equity would help you assess the prospects for repayment. Although failing to respond to recent inquiries is quite concerning.
I help GP's with SEC compliance as well as assist LP's with diligence and understanding investment opportunities before committing capital. Reach out in the future before making an investment, happy to assist and make sure you're adequately informed before making an investment.
if I was betting on this I think your correct rescue capital all thrown into a big bucket to try to plug leaks.. seen this show before I sure hope AShcroft can find a way to solve their issues.. but one thing does not help any syndicator and that is going dark on communications .. all this does is lead to SM posts and some not very nice posts about being scammed etc..
There are several funds out there that pop up as "income funds" that are nothing more than capital for their failed deals because they could not get investors on the capital call. As someone who runs a note fund, they are not simple to run or manage, and if you do not have experience in the space, it can come back to bite you.
In instances where they are lending to one of the other funds (not saying this is or any the case as I have not read the Ppm and is this response is general in nature) the reality is they don't need experience because they appear to be just popping up a fund for liquidity on their other funds' unaffiliated transactions. If disclosed in the offerings, there's nothing wrong with that. Investors need to do due diligence to understand the capital stack and where the money is being invested.
