Turnkey Multifamily with SCDC Investing ?

Question

has anyone invested with SCDC and their new multifamily development? Big selling point is $15k gets you 32 units 100% ownership. I’m looking for any info someone can give on them!

Evan Polaski · Answer

@Bobby Paquette, someone had asked about this group a while back and I will say, there is a lot that scares me about this company.  I have no interactions with them.

But, just from your own commentary: $15k to own 32 new construction units is VERY out of line with market.  In my market, which is a fairly economical place to build, I am friends with full time builders that are in their properties about $150k/door for construction level finishes.  Even if it was $100k, 32 units would cost $3.2mm to build.

Second, their website does not mention a single thing about COMPLETED projects.

Third, if they have $2bn of agreements (whatever that even means) why haven't they actually started building anything or even closed on the land.  There is a press release from them in nearly 18 months ago talking about how they had $1bn in agreements... https://fox5sandiego.com/business/press-releases/ein-presswi...

In my 17 years in real estate, I have never heard of any group that had that much money committed without taking even the first step of closing on the land.

Dennis McNeely · Answer

Now you have enough to pique your interest further, but it still gives me the hee-bee-jeebies.

Next step is to ask to see the offering documents regarding the syndication. If this is for real, I strongly suspect you'll need to be an accredited investor.

Ask to see the approved final site plan for the first phase. They should also have proposed or preliminary site plans approved for the remainder of the development. If you're still interested, take a trip to the site once ground has been broken.

The flashy marketing material for a new development is great, but don't put your money at risk for something that's likely to vaporize.

Bobby Paquette · Answer

They have land under contract, $2B in agreements signed so far, so that’s it really. Ground breaking this quarter.

Bobby Paquette · Answer

Thanks for the input! I’ll check with the municipality , have not thought about that yet!

Dennis McNeely · Answer

My 2 cents @Bobby Paquette - if it seems to good to be true, it probably is. I fell off the wagon when I saw a bullet point that indicated all second story apartments have an elevator and their suggestion that it was possible to get 1000% Plus Potential Cash-on-Cash return in the 1st Year.

Where has SCDC built? Check with the municipality where construction is being done to get their take on the development.

Who is handling the syndication related to their raising money? What institution is financing the land development and construction?

No, I've not invested with SCDC, and it's not likely I will without evidence they can do / have done what they've claimed on their web site.