All Forum Posts by: Greg Scott

Populations growth.  I always prefer swimming downstream than upstream.  The same amount of effort gets you much farther.

Quote from @Lutfiya Mosley:

Sarah Sullivan advertises herself as an expert in investing across multiple asset classes, yet she is primarily just a capital raiser — her AUM jumped from $220M in 2022 to over $900M by 2024.

Like everyone else, I’ve seen various amounts about her AUM online, which only adds to the lack of clarity. Before our property foreclosed, I was listed as a co-GP with her on a $15.3M apartment syndication. She played no real role beyond bringing in investor money.

When our property was on the brink of foreclosure due to mismanagement and neglect, she undermined my role by having private conversations with the lender without my knowledge, even though I was a loan guarantor and she was not.

She presented a  ‘rescue fund’ that I wasn’t informed about until it was too late. The GPs excluded key stakeholders from that process, and the offer itself insulted the lender with its terms, pushing us closer to foreclosure. Our property ultimately did foreclose in December 2024.

Sarah has lost significant investor money across multiple asset types, and I don’t believe these losses are being fully shared with her investors. She was also involved in raising for a carbon capture fund that the SEC has since deemed a Ponzi scheme. With this track record, one has to ask: why is she still doing business?”

Sad story.

"She played no real role beyond bringing in investor money." 

This statement says it all.  She broke the law at the start.  Unless she was a registered and licensed (unlikely), she violated SEC regulations.  If SEC gets enough complaints about her, she might end up in jail.

Here are my thoughts:

- The interior pictures look good

- Why no pictures of the bathrooms?  Kitchens and baths are a big driver. Even though bathroom pictures tend to be boring, you want to know that part of the house matches the quality of the other parts.

- The house seems priced right based on bath / bedrooms / square feet.  However, the house is more rustic, something you play up in your post.  The gravel driveway is one thing.  Add to that a well / septic system and that turns off some people.  

- Is there a garage?  It doesn't appear so. That puts you at a disadvantage to other properties for rent in the area.

 - Compared with other houses for rent, the landscaping appears overgrown.  That one tall tree in front should probably be cut down, and others trimmed back.

 - I like that you highlighted the lack of a water bill.  Turn a potential negative into a positive.

 - The only other thing I see is that not all renters have a washer / dryer.  That might be something to think about.  You could always rent a set and have it installed.

In short, I would do some landscaping then retake pictures of the front, add bathroom pictures, then consider lowering your asking rent due to the lack of garage.  

Quote from @Colleen F.:

@Greg Scott Not in California but what we have done is an addendum removing the old roommate and adding the new one that is the sole term of the addendum and everyone signs including the leaving roommate.  This removes the old roommate access to the property as of x date. My lease states anything left or not retrieved by x agreed date is considered abandoned.  That likely leaves possessions if they all sign  between the roommates to deal with and most states have abandoned property laws on how long they have to keep stuff etc.   For the security deposit I have done it two ways, an agreement to transfer or a new deposit and return the old deposit to everyone minus deductions. Unless I get written agreement to separate and deduct from 1 person the security deposit check is written to all of them. Anyway not sure how any of this flies in California but the problem with the bad roommate still on the lease is access and conflict. Typically I have had to change locks but it also hasn't typically been amicable splits. Think it through, see what is possible and talk to your lawyer.

You said "not in California" but it wasn't clear what you thought I said was incorrect.  Some of your comments supported mine.  I'm curious what is different in CA.

Academically it is interesting to compare the different sources.  If they were all pointing downward, that could spell trouble for the economy.

Unfortunately, national data isn't very usable as there is a wide variation from city to city.  I like looking at the ALN data by city, because that is more granular.  Attached are some examples.  Its free so sign up.

Even the city level data can vary widely. I like to also scan the submarket data in these same reports.

We like brokers that are focused on a long-term relationship, not because they have a long-term interest in our deal but because they want us to be their customer over and over in the future.

Having a broker push their in-house financing is a red flag for me.  This podcast discusses the many reasons why you might want to avoid that situation.

Most of my LPs would expect we are taking advantage of Bonus Depreciation, although we explicitly mention we will. 

Of course, the usability of Bonus Depreciation depends on the tax situation of the LP. For some, it will be a non-event or even potentially a negative.

Yes, because anyone can sue for any reason. Whether or not it is a good idea is a different question. Unfortunately, suing your HOA is similar to suing yourself.

If you win and it affects the HOA finances negatively, they will need to refill the bank account through a special assessment. You would end up paying for a portion of your own winnings and the legal fees.

Also, sometimes banks will refuse to provide a mortgage if the HOA is engaged in a major lawsuit. In this way, a lawsuit might only make it harder for you to sell your property.

How you change the lease largely depends on how you set up the lease in the first place.

If all of them signed as residents on one lease they are jointly and severally liable for the rent. In this case, they have been splitting the bill as they see fit, and there really is nothing for you to do. They can simply start splitting the bill up a different way.

If you signed them all to individual leases, such as a lease by the room scenario, you would have a right to fill the last bedroom. But, if they did not want you do do that, you could create an addendum to their original lease modifying mutually agreed terms.

Regarding the resident's items, you open yourself up to large liability if you give permission for anyone to touch or move the items.  Of course if you have rented the house under one lease, all the roommates have legal access to the property so what they do or do not do with the items is...perhaps best to not know.  If you have been renting units by the room, I'd discuss with a lawyer before proceeding.

There is a ton of new product being built in that area.  I expect rents to be under pressure.