Syndication deals gone sour and the GP is now radio silent! What can I do?

[Giles D.]

Good morning everyone,

I invested in a syndication deal back in late 2021 through Simple Passive Cashflow and Truepoint Capital, with Lane Kawaoka and Kyle Jones respectively as GP's. The deal has produced 1 single distribution in that time and now they have both stopped updating the LP's on the deal and have not had an updates this year. They have now stopped responding and corresponding to emails and the only phone numbers they provide go to a medical facility in Florida and a full VM box that never gets responded to.

Am I just f'd out of my money here with no recourse or do I have any leg to stand on to try and sue them for poor due diligence and not fulfilling the promises made? I've received 2 K1's so if this is fraud then i'd imagine they've committed a federal offence by issuing false documents to the federal authorities. Yes, I am getting desperate but I'm throwing myself to this crowd to see if any one else has gone through something similar or can give me some advice or even to laugh at me and say what an idiot I was, which I know already so save yourself the time!

Regards

Giles Dalrymple

[Russell Brazil]

Quote from @Victor S.:

Quote from @Chris Seveney:

@Varun Hegde

He is still posting as well on BiggerPockets

where are BP moderators when you really need them? lol posting anything "political" gets you nuked, but scamming (bigly) other members is fine? and now this "get PRO" pop-up that wants me to pay to be a member on here? GTFO

 BP moderators do not determine guilt or innocence. How would we know if the guy is a scammed? How would we know the op posting isn't one of this dudes competitors.

If someone was convicted of a crime, which has been the case, then we would pull their stuff..but short of that, people are free to make their own judgements.

[Carlos Ptriawan]

Quote from @Victor S.:

Quote from @Chris Seveney:

@Varun Hegde

He is still posting as well on BiggerPockets

where are BP moderators when you really need them? lol posting anything "political" gets you nuked, but scamming (bigly) other members is fine? and now this "get PRO" pop-up that wants me to pay to be a member on here? GTFO

Lot of biggerpocket advice doesn't make sense (always purchase home no matter the business climate, continue investing to GP syndication , always flip no matter what, buy one hundred rentals , always buy in ohio/arizona, leave california tomorrow , buy subto/wholesale ,etc ) .... but if some of us has to counter  and argue about it everyday, we would lose our energy.

Lane doesn't scam anyone. It is just I know the level of risk if any investment.

[Giles D.]

Statement Regarding Previous Forum Post

Dear Legal and Legislation Community,

I am writing to clarify and correct any potential misrepresentations from my previous post dated [date of original post] regarding the real estate syndication deal I invested in, managed by Simple Passive Cashflow and Truepoint Capital, with Lane Kawaoka and Kyle Jones as General Partners.

My initial post may have unintentionally conveyed inaccuracies or negative implications about the General Partners and the overall management of the deal. It was not my intention to defame or harm the reputation of Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, or Truepoint Capital in any way. My post was intended to seek advice and insights from the community regarding my personal concerns and experiences.

To be clear:

1. Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, and Truepoint Capital have acted within the bounds of the investment agreement, and any issues I have experienced are based on my personal perception and understanding.
2. My comments were not meant to assert any legal wrongdoing or misconduct by Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, or Truepoint Capital.
3. I apologize for any confusion or harm my post may have caused. I am committed to resolving any misunderstandings directly with the General Partners.

Additionally, I would like to note that, due to the policies and technical limitations of the forum platform, I am unable to delete my original post. However, I am fully committed to providing this clarification to address any concerns raised by Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, and Truepoint Capital and to prevent any further misunderstandings.

I appreciate the community's support and understanding as I work through this matter. Thank you for your attention to this clarification.

Sincerely,

Giles Dalrymple

[Chris Seveney]

That was a quick 180 - sponsor most likely threatened lawsuit

Curious what information was and was not inaccurate though and while someone Amy actually within their operating agreement there is typically still factual information that can be made public

[JD Martin]

Quote from @Chris Seveney:

That was a quick 180 - sponsor most likely threatened lawsuit

Curious what information was and was not inaccurate though and while someone Amy actually within their operating agreement there is typically still factual information that can be made public

 And we don't remove threads for such purposes, which is another reason why some of the claims made on threads need to be researched and evaluated by members for their truth and accuracy, and why BP doesn't ban members just based on investor disputes. 

[Michael S.]

@Chris Seveney - my guess is either a cease and desist letter or threat of lawsuit for slander.  But I am not a lawyer, and I didn't stay in a Holiday Inn Express last night.

This thread is a shining example for two of my, and mine alone, personal viewpoints:

1. Why I personally choose not to invest in ANY syndications whatsoever (TO BE CLEAR, I am not specifically referencing or referring to any of the named individuals or syndications in this thread whatsoever, nor am I specifically referencing a syndication company with the name "ANY" in its legal name). Obviously, there is risk with any REI. But, if I lose money on deals, and I definitely have, it is my sole fault for either getting the numbers wrong, or things going sideways with rehab, or the market changing while rehab was in progress. So I blame myself and move on.

2.  Why I choose to not reveal my legal name to the general web forum world - those I have done deals with, or worked on deals with, who are on this forum know who I am and that's enough for me

[Nicholas L.]

@Michael S.

yep that's how I've thought about it so far too

individual properties: high control, lower liquidity.  buck stops with me

index funds and REITs: low control, high liquidity

syndications - ?

[Carlos Ptriawan]

Quote from @Nicholas L.:

@Michael S.

yep that's how I've thought about it so far too

individual properties: high control, lower liquidity.  buck stops with me

index funds and REITs: low control, high liquidity

syndications - ?

 syndications: very high risk, very high leverage, extremely low liquidity, almost zero control, too long investment too, and mild return compare to ETF/debt investment.

There're two ways to make it work for syndication :
- you invest as GP (sometimes there's this thing called co-GP fund so it's less risky in theory) ; invest as senior debt or just simply invest to the lender itself, some of these bridge lender (because of the structure) would go up in value when rate go up/down because all risk has been hedged.

they make money even if the rate goes higher.

[Carlos Ptriawan]

Quote from @Chris Seveney:

That was a quick 180 - sponsor most likely threatened lawsuit

Curious what information was and was not inaccurate though and while someone Amy actually within their operating agreement there is typically still factual information that can be made public

 That's always the case that's why we don't talk this subject in public.

[Chris Seveney]

@Carlos Ptriawan

Exactly and in a lawsuit discovery would occur high could open the sponsor up to personal liability - especially if they mismanaged the money.

Odds are GP would sue an investor who the sponsor lost all of their money would be low I would assume. Again especially when they want something to be kept confidential it would not be kept confidential if it went to court.

[Tony Kim]

Quote from @Giles D.:

Good morning everyone,

I invested in a syndication deal back in late 2021 through Simple Passive Cashflow and Truepoint Capital, with Lane Kawaoka and Kyle Jones respectively as GP's. The deal has produced 1 single distribution in that time and now they have both stopped updating the LP's on the deal and have not had an updates this year. They have now stopped responding and corresponding to emails and the only phone numbers they provide go to a medical facility in Florida and a full VM box that never gets responded to.

Am I just f'd out of my money here with no recourse or do I have any leg to stand on to try and sue them for poor due diligence and not fulfilling the promises made? I've received 2 K1's so if this is fraud then i'd imagine they've committed a federal offence by issuing false documents to the federal authorities. Yes, I am getting desperate but I'm throwing myself to this crowd to see if any one else has gone through something similar or can give me some advice or even to laugh at me and say what an idiot I was, which I know already so save yourself the time!

Regards

Giles Dalrymple

Sorry to hear about this!

I initially learned a lot about syndications through Lane's website, so I credit him for opening my eyes to a different type of investment. But as someone who works in finance (specifically private credit), I quickly learned about how things are structured in a syndication deal as well as the risks involved. I also quickly realized that the deals Lane was involved in were not a good fit for me.

One of the most important criteria when selecting a sponsor is to ask how many real estate down cycles has the syndicator been involved in? This question eliminates probably 99% of deals I look at. I don't fault Lane for becoming a syndicator...in fact I admire him for taking the initiative and "going for gold" so to speak. If in ten years he had developed a successful track record with multiple deal exits, I would consider investing with him. But I would never invest with a sponsor who I feel I have surpassed in knowledge.

[Jay Hinrichs]

Quote from @Chris Seveney:

That was a quick 180 - sponsor most likely threatened lawsuit

Curious what information was and was not inaccurate though and while someone Amy actually within their operating agreement there is typically still factual information that can be made public

not most likley and the post is probably verbatim from the sponsor.  IE post this.
Brian B did a little research the property was lost to foreclosure with no bidders so there is no overage to collect those investors lost everything.. unless these sponsors are going to make them whole.. which I suppose could happen. not likely but it could

[Cody Zucker]

@Russell Brazil

This is so sad to see.

[Chris John]

Quote from @Giles D.:

Statement Regarding Previous Forum Post

Dear Legal and Legislation Community,

I am writing to clarify and correct any potential misrepresentations from my previous post dated [date of original post] regarding the real estate syndication deal I invested in, managed by Simple Passive Cashflow and Truepoint Capital, with Lane Kawaoka and Kyle Jones as General Partners.

My initial post may have unintentionally conveyed inaccuracies or negative implications about the General Partners and the overall management of the deal. It was not my intention to defame or harm the reputation of Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, or Truepoint Capital in any way. My post was intended to seek advice and insights from the community regarding my personal concerns and experiences.

To be clear:

1. Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, and Truepoint Capital have acted within the bounds of the investment agreement, and any issues I have experienced are based on my personal perception and understanding.
2. My comments were not meant to assert any legal wrongdoing or misconduct by Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, or Truepoint Capital.
3. I apologize for any confusion or harm my post may have caused. I am committed to resolving any misunderstandings directly with the General Partners.

Additionally, I would like to note that, due to the policies and technical limitations of the forum platform, I am unable to delete my original post. However, I am fully committed to providing this clarification to address any concerns raised by Lane Kawaoka, Kyle Jones, Simple Passive Cashflow, and Truepoint Capital and to prevent any further misunderstandings.

I appreciate the community's support and understanding as I work through this matter. Thank you for your attention to this clarification.

Sincerely,

Giles Dalrymple

 Good to see Lane Kawaoka kept some money set aside for lawyers.  Sheesh. 

[Ariel K.]

@Chris John I have never invested with this sponsor, but this “retraction” is really shameful. I love point 3 in the fact that the OP wasn’t getting any communication and that’s why he posted. Is talking about your own experience now illegal? I’d like to know other people’s experiences so I don’t make the same mistake.

[Jay Hinrichs]

Quote from @Ariel K.:

@Chris John I have never invested with this sponsor, but this “retraction” is really shameful. I love point 3 in the fact that the OP wasn’t getting any communication and that’s why he posted. Is talking about your own experience now illegal? I’d like to know other people’s experiences so I don’t make the same mistake.

 watch a dr. Grande  u tube and how he starts each show with his disclaimers.. 

[Carlos Ptriawan]

Quote from @Tony Kim:

Quote from @Giles D.:

Good morning everyone,

I invested in a syndication deal back in late 2021 through Simple Passive Cashflow and Truepoint Capital, with Lane Kawaoka and Kyle Jones respectively as GP's. The deal has produced 1 single distribution in that time and now they have both stopped updating the LP's on the deal and have not had an updates this year. They have now stopped responding and corresponding to emails and the only phone numbers they provide go to a medical facility in Florida and a full VM box that never gets responded to.

Am I just f'd out of my money here with no recourse or do I have any leg to stand on to try and sue them for poor due diligence and not fulfilling the promises made? I've received 2 K1's so if this is fraud then i'd imagine they've committed a federal offence by issuing false documents to the federal authorities. Yes, I am getting desperate but I'm throwing myself to this crowd to see if any one else has gone through something similar or can give me some advice or even to laugh at me and say what an idiot I was, which I know already so save yourself the time!

Regards

Giles Dalrymple

Sorry to hear about this!

I initially learned a lot about syndications through Lane's website, so I credit him for opening my eyes to a different type of investment. But as someone who works in finance (specifically private credit), I quickly learned about how things are structured in a syndication deal as well as the risks involved. I also quickly realized that the deals Lane was involved in were not a good fit for me.

One of the most important criteria when selecting a sponsor is to ask how many real estate down cycles has the syndicator been involved in? This question eliminates probably 99% of deals I look at. I don't fault Lane for becoming a syndicator...in fact I admire him for taking the initiative and "going for gold" so to speak. If in ten years he had developed a successful track record with multiple deal exits, I would consider investing with him. But I would never invest with a sponsor who I feel I have surpassed in knowledge.

 Me as well. I was and still proud that Lane can upgrade his identity from BP single-family landlord among us into syndication. But the more he advances, the more he seems to do too much business, which is too much for his level and should only be executed by an institution with a higher risk/reward attitude.

An investment syndication that a single person is leading,  is no longer an interest to me. True, the promised return is higher but in reality, a very strong multi-billion company can do/offer the same with much less return, but with less risk as well. Lane is just growing too big and too fast. Good for him but may not be good for me or LP investors. 

If he avoids chasing deals every few months he should be okay. He should follow Burke where he stopped acquisition after 2020. 

Outside of his acquisition, there are also lot of things that's wrong in Biggerpocket in my opinion:
1. There's good and bad GP syndicator
2. Timing in the market is not important.

For number (1), debt agencies that do the due diligence process for GP syndication, only give ratings average and below average, there's only a myth that one GP would perform better than the other GP. The debt agency, however, the agency put microscopic lens to the business plan and NOI. Most of GP syndicator have received bad reviews from debt agencies, by saying their business plan doesn't make sense, and that the NOI target is off by 20-30% sometimes.

For (2), understanding the CRE/RE cycle is important; from a historical basis, there are always two mini-bullish cycles after one downturn, and one mini cycle is about 4-5 years. in 2020 we are reaching the third cycle where usually we will see more volatility and indeed it does happen. Just avoiding investing in the FOMO cycle could prevent people from losing money.

Any volatility changes in rate and lack of liquidity would wipe out the CRE equity as well, that happened globally in the world too.

[Nate Marshall]

Quote from @Chris Seveney:

That was a quick 180 - sponsor most likely threatened lawsuit

Curious what information was and was not inaccurate though and while someone Amy actually within their operating agreement there is typically still factual information that can be made public

 Truth! This happens a lot. 

[Ivan Terrero]

@Giles D.

Funny, Lane just posted a video on YouTube........

[Carlos Ptriawan]

Quote from @Ivan Terrero:

@Giles D.

Funny, Lane just posted a video on YouTube........

Keeps looking for naive investor in YouTube is the name of the game 

[Eugene L.]

Quote from @Nicholas L.:

@Michael S.

yep that's how I've thought about it so far too

individual properties: high control, lower liquidity.  buck stops with me

index funds and REITs: low control, high liquidity

syndications - ?

 Summed it up nicely Nicholas.  I'd add index funds, reits, equity markets have benefit (and overhead) of greater regulatory oversight/compliance providing some protection/assurance for shareholders.

[Carlos Ptriawan]

Quote from @Eugene L.:

Quote from @Nicholas L.:

@Michael S.

yep that's how I've thought about it so far too

individual properties: high control, lower liquidity.  buck stops with me

index funds and REITs: low control, high liquidity

syndications - ?

 Summed it up nicely Nicholas.  I'd add index funds, reits, equity markets have benefit (and overhead) of greater regulatory oversight/compliance providing some protection/assurance for shareholders.

 This!!!!!!!!!!!!

The meaning one is accredited investor is that they can accept higher risk

[Carlos Ptriawan]

Quote from @Eugene L.:

Quote from @Nicholas L.:

@Michael S.

yep that's how I've thought about it so far too

individual properties: high control, lower liquidity.  buck stops with me

index funds and REITs: low control, high liquidity

syndications - ?

 Summed it up nicely Nicholas.  I'd add index funds, reits, equity markets have benefit (and overhead) of greater regulatory oversight/compliance providing some protection/assurance for shareholders.

 I also still don't get it how these so-called GPs are genius enough to constantly pay investor 16% annualized LOL i was like seriously dude ? this is almost like twilight zone level to me , but i don't know anything right lol 

am i crazy or am i an idiot i don't understand how could 2 BR simple freaking apartment could yield more than 16% cash lol anything above 15% is almost like pablo-escobar-level-of-scheme.

[Victor S.]

damn, homie is sure very responsive when it comes to generating cease and desists lol what a clown.

OP, i suggest you locate other investors and see what your legal options are. do not let this pos off the hook so easily.