All Forum Posts by: Scott Rye
Scott Rye has started 4 posts and replied 29 times.
Post: Ashcroft capital: Additional 20% capital call
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
I want the fund to survive, thrive and payback LP's.... But I have lost confidence in the decisions of this group for a variety of reasons. The Ashcroft Fund 1 capital call pays back the GP nearly $10-11M for purported 'loans" they made to support the fund last year....Even though LP's were not advised/notified last year that the GP's had to make such "investment". I gave them the opportunity to do right with our funds during the initial investment (and they might make it workout), but now there are just too many red flags with the Capital Call and the new deal....Do not let the friendliness for Joe, Frank and there podcast sway you...do your continued DD and ask the questions...I will not add funds to this capital call. I will take the haircut/dilution risk, go smoke a bunch of "hope-ium" that they can squeeze blood from this turnip in 3,4,5 yrs from now...If not, such is life. By way of example, the sum of all of our Syndication investments are about 3% of our NW. Be careful how you size your investments and adjust for your level of risk and ability to withstand to loose on occasion...Good luck to all...Cheers!
Post: Ashcroft capital: Additional 20% capital call
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
Quote from @Paul Azad:
i suspect your position will be diluted by about 20% if you don't contribute to the capital call, You don't lose your investment though, unless the property gets sold below debt basis or gets foreclosed on and then sold by lender at below debt basis, but if only a few investors contribute then that may happen
The question for the limited partners remains, is this a good investment today?, not yesterday which is a Sunk Cost
Given macro-environment, rising unemployment, rising 10yr interest rate which equals Cap rates, prolonged 23month inverted yield curve (longest since 1978), increasing supply of Multi-family in Atlanta area over next 2 years, falling post pandemic stimulus in people's bank accounts, now below 1 trillion from 5 Trillion 3 yrs ago, etc.
Would that extra 19.7% capital be better invested somewhere else?
Sorry for the difficult situation, but many Multi-family syndicates dangerously used bridge-loans with very short term Maturity walls which are forcing the capital infusions to re-finance, as opposed to variable 10yr Agency debt or even safer but less lucrative, 10 yr Fixed agency or CMBS
only the limited partners know the details and the performance of the property and the managers to make this decision - good luck
I just cannot get my head around Ashcroft getting their 11-12M back into their pockets while everybody else basically sinks.....Why the "F" do they get made whole! The video was worthless, the numbers are more inflated and egregious than their original plan. Who is selling in the SE or Texas at a 4-5 cap? If anyone know someone who knows someone where this actually happening on B to B- props, I am all ears! These guys want their 12M back and the rest of the LP's might as well pick RED or BLACK....For us, we are in numerous Synd's and generally doing well except this one. Will likely pass, expect the loss and if we get something 3-4 yrs from now, well then that's just plain luck!
Post: Ashcroft capital: Additional 20% capital call
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
Quote from @Paul Azad:
Quote from @Chris John:
Quote from @Wesley Leung:
I'm from TEXAS, and trust me George "Dubya" Bush (President from 2000-2009) was not motivated by helping minorities to get their first homes. GFC was due to naive/lazy nurses/teachers/cops/fire-fighters and anyone else with a pension, not deploying any Due Diligence and just letting their greedy pension managers get billions in fees to invest in crap MBS and synthetic CDOs, all else by banking and ratings agencies and real estate investors just followed like trigger/hammer/powder/bullet down the pipe. The person who pulled the trigger is solely responsible and that was the American people with pension funds that placed the investments and MADE the Market and not anyone else.
Today idiots like at Ashcrack pay ridiculously high prices with cap rates of 3to4 then cry, "what happened" when their ENron or Pets.com share price starts to pull back 20-30%. "Inconceivable!"
I listened to the call above, from 2 days ago and the GP when asked what he would have done differently, said "would have bought longer term Rate Caps". Really, that's all your frontal cortex with all the reflection over the past 2 years could come up with? Really? Never occurred to you to maybe not buy at all-time highs, near lowest 10yr in recorded US history {0.31% in March of 2020}, Maybe don't use variable rate debt with short term maturity? Maybe just sit on your hands and do nothing? If I go to a car lot and the 20year old Subaru with 200,000 miles and frame damage is selling for 300K, maybe I take the frickin' BUS!
But I must agree with Carlos' sentiments, most GPs knew exactly what they were doing and the risks they were taking with other people's money. The Ashcrock crew may not have known what they were doing, may have been as moronic as they sound on the webinar, and perhaps that is even more dangerous though less nefarious. They also throw up a table with a "range" of exit Cap Rates from only 4-5%, R U Kiddin me. 10 yr is at 5% now and heading, by most bond experts, much higher. We have 42 years of leverage to de-risk as an economy. So they are being wildly optimistic, and also two faced as they say many times that the multi-family market has improved in last 6 months, but that they can't sell any assets to raise capital in this horrible market so they must do the Capital call and ADD pref equity (to pay them back the 12 mil they stupidly sunk in over last 1 year, good money after bad).
They are Un-Good at investing, swipe Left :)
Post: Ashcroft capital - Paused Distributions
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
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!
Post: Ashcroft capital - Paused Distributions
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
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!
Post: Virtual Assistants
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
@Allan Smith....Can you elaborate what your VA is doing for you at $3.50.hr? I am in need of someone to handle bookkeeping items, receipts, spread sheets etc...
Thanks
Post: OK who has received all or most of their rent this month ?
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
I am reading generally good or great news for most owners/Landlords. A few with late or partials, but that may be made up in a few months....Remember its a slow methodical journey and not a sprint! Stay your course. Cheers!
Post: First 5+ unit property....
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
Investment Info:
Large multi-family (5+ units) buy & hold investment.
Purchase price: $950,000
Cash invested: $225,000
6 units building. Starting rehab, rent adjustments, utility raise, Cap Ex projects, interior refresh. Projected CF by November 2020.
How did you find this deal and how did you negotiate it?
Off market deal brought to us by our MF Broker.
How did you finance this deal?
75/25 local bank financing.....5/30 at 4.125% and .5 pts. Closed on March 20 with zero problems.
How did you add value to the deal?
Negotiated $80K off price for new exterior concrete, garage roof, new windows, electrical upgrades, interior refurbishments, boiler. Financed these funds and the bank set up account to draw for all cap ex items up to 80K with no time limit. Only need to submit invoices for payments...The local banks are far more flexible than big box banks.
What was the outcome?
Just started the project.....
Post: OK who has received all or most of their rent this month ?
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
We have received 100% payment from all existing tenants on-time, including new (inherited tenants) on 6 unit building we just closed on March 20, 2020, in the middle of this mess. Closing on building was no problem with Bank or Title Co in Northern Colorado. We also leased a studio on April 1 and have strong interest on a 1 bedroom unit which would bring us to "0" vacancy.....does not seem to be slowing down in Northern Colorado.
Post: Looking for an Airbnb host for Broomfield/Louiville, CO property
- Investor
- Lafayette, CO
- Posts 30
- Votes 15
Hello BP group,
I am looking for a host to support a property near Broomfield/Superior/Louisville, CO. Already searched through Airbnb/VRBO and the usual sites and other profiles, and no response so far. If anyone is currently a host and available or if anyone here knows a host(s) in the area that would/could support, feel free to PM or send my contact info out to prospective hosts...
Thank you....
Cheers!
Scott