No responses from syndicator

[John Prorok]

Has anyone else here invested in syndications with Shared Estates Asset Fund? I'm curious about what others' experience has been like.

I invested in a couple of crowdfunded syndications with them through the SmallChange platform in 2021. The fund used to post semi-annual reports on their investor site, but those reports stopped in the middle of last year. Now that they've missed two reporting periods I'm wondering if/what action I should take. I've tried emailing the operator but it's been a couple of weeks and I haven't heard anything. It's not a big hit to me if both projects go to zero, but I'd still like to know what's going on given that the group has missed two reporting periods.

I know that this kind of thing has been somewhat common among syndicators in the past year or two due to financial challenges but I don't think rising interest rates should have hurt these projects much. If I recall correctly, both had long-term, seller-carried notes at fixed interest rates. The only thing I can think of is that bookings (these were STR projects) haven't been as strong as the group anticipated. Would love to know if any other investors know something I don't.

[Evan Polaski]

@John Prorok, is it this: https://sharedestates.fund/

To your initial question: no response via multiple emails and automated voicemail is certainly not a good sign, but also not guaranteed a Ponzi scheme. In fact, I think there are likely very few Ponzi schemes in real estate.  There are other unethical/illegal actions, but unless you money went in to pay back earlier investors, it isn't a Ponzi scheme (semantics, I know).

If the GP is still the host on Airbnb, message them there.  Maybe pose as a possible guest first, just to hopefully get them to respond.

As for some of the other items you discovered, you could try adding some heat to your emails.  Maybe use LinkedIn, Instagram, Airbnb, etc to try to get in touch with them with ever escalating language.  Alternatively, and again this may not be worth the effort, in all Sub docs, there is likely a formal notice address.  Especially if there are stated reporting requirements in the docs that are not being adhered to, you could provide a notice of default.  In many syndications, this notice address would have both the direct mailing address of the syndicator and often a law firm that helped draft the documents.  While the notice may fall on deaf ears at the syndicator, the law firm would very likely read and notify syndicator of notice of default.  Send via certified mail.

As for your post-mortem, assuming the money is gone and it is not worth your time and effort to keep fighting for it, I personally am pretty biased against crowdfunding sites like SmallChange, CrowdStreet, and others.  While I am sure there are good operators on those sites, my impression is it is sort of the lazy way out.  Sort of like brokers talk about LoopNet, it seems like these would be the platforms that bad deals and/or bad operators make their last ditch efforts.