RAD Diversified SCAM ALERT!!!

General Real Estate Investing
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RAD Diversified SCAM ALERT!!!

Arthur Crum
Member since 2019 · 7 posts · 33 votes

Hello,

I Just wanted to give everyone a quick update on the RAD Diversified scandal that is currently unfolding. As of April 1, 2024, RAD Diversified (a REIT), has officially put a freeze on withdrawing any and all funds from the REIT. If I had to speculate, I would say they are facing some serious liquidity issues. Interestingly enough, I came across an article in the Philidelphia Inquirer that raised concerns about the REIT two years ago. It's pretty much spot on. Looks like your classic Ponzi scheme. It would appear good ole Dutch has been using new investor funds to pay liquidations i.e. robbing Peter to pay Paul. I guess the well has run dry.

I myself was duped into investing $5000 (unaccredited) into the fund and will now no longer be able to liquidate any portion of my shares. The URL provided above will take you to official statement that RAD has provided to the SEC. Personally, I doubt its authenticity, but that's the direct information I was provided with from Alexander Prock, as of one hour ago. I also know that RAD's accreditation with the BBB has been revoked due to the massive influx of similar complaints that have been pouring in since the official statement was released on April 1st, 2024.

I would strongly advise ALL BP members to stay far away from this scam. I highly doubt I will ever see my money again. I would sincerely hope that the SEC has begun looking into this and/or the FBI. And, by the way, Dutch Mendenhall the CEO of RAD, has been a member of the BP community now for several years so feel free to chime in bud. Below is a copy of the SEC statement. It really makes me sick that these scam artists run rampant while the SEC does absolutely nothing to combat the issues. Anyway, please feel free to do your own due diligence but it looks like we all got got.



"On April 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to continue the temporary freeze of the Company’s redemption program. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after April 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the redemption program or to continue to pause the redemption program no later than July 1, 2024."

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Scott Trench:

I have no idea what is happening at this particular fund, and can’t chime in on any specifics.

I will say that I, along with many investors in the community, have likely lost a lot of money. Syndicators who bragged about how smart they were, showed off fancy lives, cars, private jets, and mansions, second homes, and wrote books and sold expensive courses about how smart they are at investing are being exposed all over the place. Sometimes, these syndicators who are actively in process of wiping out investor’s life savings, even brag about how automated their businesses are and how they don’t have to work!

I’m not making the same mistakes with my money again, nor will I allow investors who made their name in part on BiggerPockets to go unexposed if they treat investors poorly, lose huge amounts of investor money, or clearly mismanage funds.

We are starting PassivePockets.com and launch it in June. We will learn how to find and vet “good” and expose “bad” for ALL to see. In the meantime, we will watch the forums for more posts about the syndicators who handle situations to the chagrin of their investors. 


 Morning Scott,  I missed this post and posted above but its worth repeating. What I see irrespective of how the deals are going is the lack of communications from these syndicators
with respect to how their deals are actually doing. Communication good or bad goes along way to keeping investors from being upset to going ballistic on the internet and creating irreparable harm to the syndicators reputations.

It seems that most of the BP influencers I have seen over the years have stepped into MF syndication with varying results. So to that end they are new to the game never went through a deep downturn cycle. And for them rasing capital on SM BP facebook whatever has been fairly easy compared to others who dont have a big SM or BP presence.  This is where the crowdfunding sites helped a lot fo those types scale.

The play book as you described is an old one when it comes to marketing themselves nothing different than what the how to trainer do. The difference is they are stuck with a certain asset as we are seeing. The trainers just pivot to what is working today and set up training in that niche. But its all the same big budget for marketing and go hammer the airwaves/internet. Sell the sizzle etc etc.

Having been front and center in the late 80s of a billion dollar syndication company ( was an independent contractor in charge of finding and entitling their land projects in northern CA.) I saw what happens when these things start to go south and from my mind most of these companies that could be struggling now simply do not have enough staff to handle all their investors needs in a timely fashion and when things go bad like we see posted on BP right now lack of up front communications leads to Investors going out of their minds with worry and the blame game starts. Then of course google searches bring all these things to the front page and next thing you know reputations get hammered..

As one who personally had a medium sized HML company going into 2007 2008 with 600 loans on my books and by 2010 went through a massive re value melt down all of us in that business got hammered for us we started in 2001 and by 2010 had to basically shut down let go 90% of staff and spent 3 to 4 years hemorrhaging our net worth's to make sure our banks got paid ( which to my personal financial situation was devastating) Most of my peers went out of business completely ( BK) I did not but by 2011 I was basically starting over. But with my head held high gone was all the normal trappings of RE success being served as a big slice of humble pie :(.

And as my core commercial banks understood that I doing everything i could to protect them. The one bank left kept a 1 mil line of credit for me ( down from 15 mil) had me  on a 90 day extensions for 4 years and allowed to to earn back in. Its taken basically 12 years to get back to maybe half of what I had at the time.

Bottom line RE cycles and I suspect most of the folks that are having issues did what they thought was correct or right and the market has gone against them.. If they are not changing their personal lifestyles to adjust to this, not communicating, doing new deals leaving old ones to wither then you know what your dealing with the goal ( human nature i guess) is to keep lifestyle intact at all costs.

To that end I just paid off yesterday my last legacy bank debt took me 12 years but its done an gone now. But those same banks stuck with me and allowed me to pivot and build up my new construction side using bank debt intead of HML.. etc etc.

So If i was guessing most of the folks having issues in the space have very little assets aimed toward client relations and communications but still do big spends on advertising for new blood.

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  • Jonathan Karas
    Member since 2024 · 25 posts · 4 votes
    1y

    Feel like I've been thrown under the bus by them.  No communication.  Hard to know what's true, what's not.  I wish they'd just be completely honest.  Very troubling situation.

    0Reply
  • Sebastian Bennett
    Investor · Bucks County · Member since 2023 · 196 posts · 156 votes
    1y

    @Jonathan Karas Did you notice Rad's social media presence appears to have gone away? Not a good sign..Have they given up or are they still raising money? Seems Dutch is still out there doing Guru stuff but not for the benefit of Rad. 

    2Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Sebastian Bennett:

    @Jonathan Karas Did you notice Rad's social media presence appears to have gone away? Not a good sign..Have they given up or are they still raising money? Seems Dutch is still out there doing Guru stuff but not for the benefit of Rad. 


    the OZ or Land REIT they filed with the SEC was revoked. If I were a betting man the company is folding up and this dutch character is out there doing the guru circuit as only source of $ and idiots will pay for training from someone like this.

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  • Ethan Blue
    Member since 2024 · 12 posts · 9 votes
    1y
    Quote from @Chris Seveney:
    Quote from @Sebastian Bennett:

    @Jonathan Karas Did you notice Rad's social media presence appears to have gone away? Not a good sign..Have they given up or are they still raising money? Seems Dutch is still out there doing Guru stuff but not for the benefit of Rad. 


    the OZ or Land REIT they filed with the SEC was revoked. If I were a betting man the company is folding up and this dutch character is out there doing the guru circuit as only source of $ and idiots will pay for training from someone like this.


     Hi Chris,

    Thanks for that info. Do you have a link to that info? I wold be interested in reviewing.

    1Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1y

    Saw this coming for a few years. I feel bad for the investors who are likely going to lose out on their hard earned income and invested in this company but it can also be used as a case study for other members of the BP community moving forward before investing. I also wonder how accurate or up to date the website remains. I would be surprised if they still have close to 50 staff members. I don't know how they can operate in this climate, especially with all of their challenges with this amount of overhead. 

    [email protected]
    3Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Ethan Blue:
    Quote from @Chris Seveney:
    Quote from @Sebastian Bennett:

    @Jonathan Karas Did you notice Rad's social media presence appears to have gone away? Not a good sign..Have they given up or are they still raising money? Seems Dutch is still out there doing Guru stuff but not for the benefit of Rad. 


    the OZ or Land REIT they filed with the SEC was revoked. If I were a betting man the company is folding up and this dutch character is out there doing the guru circuit as only source of $ and idiots will pay for training from someone like this.


     Hi Chris,

    Thanks for that info. Do you have a link to that info? I wold be interested in reviewing.


     It is all on the SEC edgard website. every reg a offering is public record. I think this is something many investors miss - which is many offerings now all have the data publicly available. For this company, it was easy to see several years ago this was not going to end well based on their SEC reporting. 

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  • Ethan Blue
    Member since 2024 · 12 posts · 9 votes
    1y
    Quote from @Chris Seveney:
    Quote from @Ethan Blue:
    Quote from @Chris Seveney:
    Quote from @Sebastian Bennett:

    @Jonathan Karas Did you notice Rad's social media presence appears to have gone away? Not a good sign..Have they given up or are they still raising money? Seems Dutch is still out there doing Guru stuff but not for the benefit of Rad. 


    the OZ or Land REIT they filed with the SEC was revoked. If I were a betting man the company is folding up and this dutch character is out there doing the guru circuit as only source of $ and idiots will pay for training from someone like this.


     Hi Chris,

    Thanks for that info. Do you have a link to that info? I wold be interested in reviewing.


     It is all on the SEC edgard website. every reg a offering is public record. I think this is something many investors miss - which is many offerings now all have the data publicly available. For this company, it was easy to see several years ago this was not going to end well based on their SEC reporting. 


     Thank you, yes I was completely unaware of that as a resource

    1Reply
  • Ethan Blue
    Member since 2024 · 12 posts · 9 votes
    1y
    Quote from @Stuart Udis:

    Saw this coming for a few years. I feel bad for the investors who are likely going to lose out on their hard earned income and invested in this company but it can also be used as a case study for other members of the BP community moving forward before investing. I also wonder how accurate or up to date the website remains. I would be surprised if they still have close to 50 staff members. I don't know how they can operate in this climate, especially with all of their challenges with this amount of overhead. 


     I will do my best to keep everyone updated on what my experience is like. Right now, we are just in hurry up and wait mode. If it does indeed go under, myself, and many others will be out a huge amount.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y
    Quote from @Don Konipol:

    When a deal pans out as projected, everyone (almost everyone) is happy.  When a deal does not, then the accusations fly.  So, let’s RATIONALLY take a look at the three possible scenarios.

    1. The deal was legit, the sponsor was honest, all laws were complied with, the deal didn’t work as planned.  

    2. The deal was legit, the sponsor was NOT honest, all laws were complied with, the deal didn’t work.

    3. Scam from day 1.

    Now some investments can fall between there numbers, or have aspects of 2 or more.  However, my impression is (1) many deals should NOT be sold to unsophisticated/un accredited/ not high net worth investors EVEN IF the law allows this, and (2) when a deal doesn’t pan out as projected the unsophisticated investors believe they’ve been “scammed”. 

    Here are the biggest mistaken assumption unsophisticated investors make when contemplating an investment in a deal

    1- that the Sponsor is an expert in the field of investment

    2- that investments, economic markets, financial markets are predictable with any accuracy

    3- that PROJECTED returns are PROMISED / GUARANTEED returns

    4- that because they NEED their investment to be liquid the sponsor will provide said liquidity

    5- that the “deal” is more important than the sponsor. 


    Don I think what most investors miss with these funds is the lack of liquidity as in none until the investment cycles or the sponsor wants  to pay out.. the idea that folks can have a need for money after the investment and the Sponsor should pay it out upon demand only works if there is a mechanism in the offering to allow that. And them of course the investment has to be working as well.
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  • Jennifer O.
    Member since 2024 · 18 posts · 21 votes
    1y

    Michael Bohn v. Brandon "Dutch" Mendenhall, Et Al.

    https://ventura.ecourt.com/public-portal/?q=downloadFile/826...

    With several new Citibank mortgage foreclosures in Pinellas and Manatee County, Florida, and the above new case, RAD's situation is looking worse and worse.  Chris is right. That's why he's pushing the Inner Circle mentoring and retreats.

    Citibank NA As Trustee v. Rad Diversified Reit Inc

    Civic Real Estate Holdings III LLC v. Rad Diversified Reit Inc

    0Reply
  • Jennifer O.
    Member since 2024 · 18 posts · 21 votes
    1y
    Case Number Case Style Case Status Filed Case Type
    24-CA-008270 U.S. BANK TRUST NATIONAL ASSOCIATION NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE OF FF INVESTORCO GRANTOR TRUST VSRAD DIVERSIFIED REIT INC Open 2024-10-17 MortgageForeclosure-Commercial-3-$250,000orMore
    24-CA-008275 ARNEBERG, LORA VSRAD DIVERSIFIED REIT, INC. Open 2024-10-17 BreachofContract
    24-CA-008218 JACAR INVESTMENTS LLC VSRAD DIVERSIFIED REIT Open 2024-10-16 Contract&Indebtedness
    24-CA-008063 CHRISTENSEN, DYANNE VSMENDENHALL, BRANDON Open 2024-10-04 BreachofContract
    24-CA-007584 CIVIC REAL ESTATE HOLDINGS III, LLC VSRAD DIVERSIFIED REIT, INC Open 2024-09-17 MortgageForeclosure-NonHomestead-3-$250,000orMore
    24-CA-007587 CITIBANK, N.A. AS TRUSTEE ON BEHALF OF MAV 1 VSRAD DIVERSIFIED REIT, INC Open 2024-09-17 MortgageForeclosure-NonHomestead-3-$250,000orMore
    24-CA-007258 WILMINGTON SAVINGS FUND SOCIETY, FSB, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE FOR IRIS HOLDINGS A TRUST VSRAD DIVERSIFIED REIT INC., A MARYLAND CORPORATION Open 2024-09-05 MortgageForeclosure-Commercial-2-$50,001-$249,999
    24-CA-006786 PATRICK G THEODORA AND KEVIN J THEODORA SR AS TRUSTEES OF THE HELEN M. THEODORA IRREVOCABLE TRUST DATED MARCH 25, 2011 VSMENDENHALL, BRANDON Open 2024-08-20 MortgageForeclosure-NonHomestead-2-$50,000-$249,999
    1Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1y

    Here you go folks, in case you were wondering if there was going to be a second act. Share prices are soaring as well :)  Sound familiar?

    https://raddamerica.com/

    [email protected]
    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y

    @Stuart Udis

    Their reg an offering for that was never qualified and sec just issued a staff action order abandoning it.

    https://www.sec.gov/Archives/edgar/data/1975076/999999999724004094/filename1.pdf

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  • Sebastian Bennett
    Investor · Bucks County · Member since 2023 · 196 posts · 156 votes
    1y

    Dutch is still raising. How is this even legal?

    1Reply
  • Hongjie Xie
    Member since 2024 · 4 posts · 0 votes
    1y

    yes, how this can be allowed?

    0Reply
  • Ethan Blue
    Member since 2024 · 12 posts · 9 votes
    1y

    Another update, at this point, I cannot reach my coordinator. I am guessing that they laid a bunch of people off, but that is only speculation. Several of their properties are in foreclosure.

    Allegedly, there is a member meeting Tuesday. We will see what happens. Not looking good.

    0Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1y

    He can't appropriately care for investors hard earned money but he's is out there teaching others how to raise capital....seems logical. 

    [email protected]
    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Stuart Udis:

    He can't appropriately care for investors hard earned money but he's is out there teaching others how to raise capital....seems logical. 


    Stuart - give the guy credit he raised like $40M. The problem appears to be managing it and returning it back.

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  • Joseph Phillips
    Member since 2019 · 9 posts · 3 votes
    1y

    Nov 2024…Google search - Arkansas business.com "Southwest Georgia Farm Credit ACA of Bainbridge, Georgia, said in a lawsuit filed in Randolph CountyCircuit Court that Rad Diversified REIT Inc. borrowed $2.1 million in November 2022.

    Rad, of Tampa, Florida, was supposed to repay the loan in 239 monthly installments of $18,317.

    “RAD has failed to make the payments required by the note,” and has allegedly defaulted on the loan, according to the lawsuit filed by attorney Ralph Waddell of the Waddell Cole & Jones firm in Jonesboro. “ paid subscription 

    1Reply
  • James Miller
    Member since 2024 · 45 posts · 17 votes
    1y
    Quote from @Joseph Phillips:

    Nov 2024…Google search - Arkansas business.com "Southwest Georgia Farm Credit ACA of Bainbridge, Georgia, said in a lawsuit filed in Randolph CountyCircuit Court that Rad Diversified REIT Inc. borrowed $2.1 million in November 2022.

    Rad, of Tampa, Florida, was supposed to repay the loan in 239 monthly installments of $18,317.

    “RAD has failed to make the payments required by the note,” and has allegedly defaulted on the loan, according to the lawsuit filed by attorney Ralph Waddell of the Waddell Cole & Jones firm in Jonesboro. “ paid subscription 


     i heard they selling all the farms in idaho also that they talk about on investor updates.  Im sure there are people invested in those properties.  total scam..I am sure i will never see my money

    1Reply
  • James Miller
    Member since 2024 · 45 posts · 17 votes
    1y
    Quote from @Stuart Udis:

    He can't appropriately care for investors hard earned money but he's is out there teaching others how to raise capital....seems logical. 


    0Reply
  • Barbara RadkePro Member
    Westlake Village, CA · Member since 2021 · 16 posts · 15 votes
    1y

    I got the same text, makes me sick to my stomach.  How is he able to continue on taking people's money? 

    1Reply
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1y

    @Barbara Radke Social media is an incredibly powerful tool. Individuals like Dutch can get in front of far more potential investors now than ever before. Combine this with the deliberate targeting of unsophisticated investors or those without the resources to run ordinary diligence and you have a winning recipe. It seems most of his current content relates to educating others on how to raise capital as opposed to raising capital for his own projects but I could be wrong. This is merely what I've observed from the content I 've seen online. 

    [email protected]
    3Reply
  • Alan David
    Member since 2024 · 95 posts · 35 votes
    1y

    yes they target facbook users.Ive donr fairly well with Phoenix Capital investments and Groundfloor, both legit and pay out often.I look for growth of 10-15%.

    2Reply
  • Joseph Phillips
    Member since 2019 · 9 posts · 3 votes
    1y

    RADD investments enticement and business model is based on high rates of return when disposable profit/income is available. When it is not, based on the business model I think  no returns on investment are allowed or for that matter available given the number of investors due payouts, and operation costs plus investment loan payments. New investors’ funding, it would appear, works to seed investment and offset the debt but is insufficient it seems now to raise enough capital to reopen investor payouts. I reviewed and had their prospectus evaluated. They were heavily leveraged and I didn’t invest. RADD brings imo highly reputable folks to talk alternative investments that helps to possibly validate their business model, too. So add the advertised high rate of return when things are good when money can flow out to investors, plus celebrities at their investment forums and it seems very attractive. There may be some investors that also don’t understand their business and payout model, too. Anyway buyer/investor beware. 

    1Reply
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