Brandon Turner ODC fund

[Guillermo Sanchez]

Hey, I invested back in July in array apartments fund. I'm worried, I was told to wait 6 months for distributions and we are now heading into May and $0 has been distributed. I came here to see if anyone else has invested in ODC and if they are in good standing. 

[Chris Seveney]

Quote from @Guillermo Sanchez:

Hey, I invested back in July in array apartments fund. I'm worried, I was told to wait 6 months for distributions and we are now heading into May and $0 has been distributed. I came here to see if anyone else has invested in ODC and if they are in good standing. 

 Have you heard anything since?

[Sean Barber]

Quote from @Jim Peret:

Quote from @Sean Barber:

Quote from @Jim Peret:

I'm in the Sunbelt Diversified Fund. They just suspended distributions. After 1.5 years I received 4 months of distributions at around 1% annually. I think Brandon is a better sales person then he is at running syndications especially if they aren't doing well. But he will still be a very rich man. 

Jim, what do you think about the most recent update for sunbelt? Seems like they’re prepping us for a capital call. Not sure how you can be 94% below projections without some gross lack of due diligence prior to purchasing these assets.

 It's bad. I hope not. It's like he missed everything when doing due diligence.

And there it is. Capital call alternative e-mail in your inbox. They are wanting to issue pref equity to save the deal. I have 0 faith in them and seriously considering voting for the sale at a 62% loss of equity.

[Chris Seveney]

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

[Sean Barber]

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

[Jay Hinrichs]

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

[Michael Wang]

Quote from @Sean Barber:

Quote from @Jim Peret:

Quote from @Sean Barber:

Quote from @Jim Peret:

I'm in the Sunbelt Diversified Fund. They just suspended distributions. After 1.5 years I received 4 months of distributions at around 1% annually. I think Brandon is a better sales person then he is at running syndications especially if they aren't doing well. But he will still be a very rich man. 

Jim, what do you think about the most recent update for sunbelt? Seems like they’re prepping us for a capital call. Not sure how you can be 94% below projections without some gross lack of due diligence prior to purchasing these assets.

 It's bad. I hope not. It's like he missed everything when doing due diligence.

And there it is. Capital call alternative e-mail in your inbox. They are wanting to issue pref equity to save the deal. I have 0 faith in them and seriously considering voting for the sale at a 62% loss of equity.

 Yep just received this email as well in the Sunbelt Portfolio Fund (My first ODC investment and not a good one at all).  Baffling to me that their raising new funds while current funds are struggling.  I recommended in the feedback on the vote that if the owners of ODC and Disrupt were really serious in their strategy and committed, they should fund the majority of this pref equity (put their money where their mouth is).  Hope others will recommend this as well and not put all the risk on the pref equity investors as well as us LP's invested in this fund.  

[Sean Barber]

Quote from @Michael Wang:

Quote from @Sean Barber:

Quote from @Jim Peret:

Quote from @Sean Barber:

Quote from @Jim Peret:

I'm in the Sunbelt Diversified Fund. They just suspended distributions. After 1.5 years I received 4 months of distributions at around 1% annually. I think Brandon is a better sales person then he is at running syndications especially if they aren't doing well. But he will still be a very rich man. 

Jim, what do you think about the most recent update for sunbelt? Seems like they’re prepping us for a capital call. Not sure how you can be 94% below projections without some gross lack of due diligence prior to purchasing these assets.

 It's bad. I hope not. It's like he missed everything when doing due diligence.

And there it is. Capital call alternative e-mail in your inbox. They are wanting to issue pref equity to save the deal. I have 0 faith in them and seriously considering voting for the sale at a 62% loss of equity.

 Yep just received this email as well in the Sunbelt Portfolio Fund (My first ODC investment and not a good one at all).  Baffling to me that they’re raising new funds while current funds are struggling.  I recommended in the feedback on the vote that if the owners of ODC and Disrupt were really serious in their strategy and committed, they should fund the majority of this pref equity (put their money where their mouth is).  Hope others will recommend this as well and not put all the risk on the pref equity investors as well as us LP's invested in this fund.  

I’m voting to sell. They are being overly optimistic in their new projection just like their original projections. They are counting on lower rates, higher rents and lower cap rates and a ten year hold, all to give me a very low 5-15% total return over a ten year hold!. Better to take the 38% now and invest in something else I believe can be successful with a 12-15% annual return.

[Michael Wang]

Quote from @Sean Barber:

Quote from @Michael Wang:

Quote from @Sean Barber:

Quote from @Jim Peret:

Quote from @Sean Barber:

Quote from @Jim Peret:

I'm in the Sunbelt Diversified Fund. They just suspended distributions. After 1.5 years I received 4 months of distributions at around 1% annually. I think Brandon is a better sales person then he is at running syndications especially if they aren't doing well. But he will still be a very rich man. 

Jim, what do you think about the most recent update for sunbelt? Seems like they’re prepping us for a capital call. Not sure how you can be 94% below projections without some gross lack of due diligence prior to purchasing these assets.

 It's bad. I hope not. It's like he missed everything when doing due diligence.

And there it is. Capital call alternative e-mail in your inbox. They are wanting to issue pref equity to save the deal. I have 0 faith in them and seriously considering voting for the sale at a 62% loss of equity.

 Yep just received this email as well in the Sunbelt Portfolio Fund (My first ODC investment and not a good one at all).  Baffling to me that they’re raising new funds while current funds are struggling.  I recommended in the feedback on the vote that if the owners of ODC and Disrupt were really serious in their strategy and committed, they should fund the majority of this pref equity (put their money where their mouth is).  Hope others will recommend this as well and not put all the risk on the pref equity investors as well as us LP's invested in this fund.  

I’m voting to sell. They are being overly optimistic in their new projection just like their original projections. They are counting on lower rates, higher rents and lower cap rates and a ten year hold, all to give me a very low 5-15% total return over a ten year hold!. Better to take the 38% now and invest in something else I believe can be successful with a 12-15% annual return.

 Completely understand your decision. I have been in another syndication where they had a deal go south but the GP's decided to fund the entire remaining capital they needed and eventually turned the deal around for a profit. This showed me their confidence in their abilities and really respect them for putting their own capital to see it through.  I have no previous dealings with ODC and so far the GP's personally have not shown their capability to operate or look after investors by funding additional capital on their own (Without looking for additional investor capital).  Also raising other funds while some of their funds are falling apart really shows a lack of respect to their current investors.   

[Jim Peret]

I've got a few initial thoughts.

1.Is our investment so bad that's it's only worth 38% of what we paid for it? And they plan it going from .38 to 1.5 -2.0 if it's kept? I'd think there'd be a line of experienced syndicators at 38%. Or maybe some of Brandon's Hawaiian buds.

2.How many people are voting or how many votes are there?  Does your vote count for more or less depending on the  amount you invested?

3.What happens if they have a capital call and I don't give additional capital?

4.If the future billionaire doesn't want to fund his mistakes maybe they could sell one property to fund  the other two?

5. How can you trust someone that was so wrong on his due diligence? 

I'm just thinking out loud here and maybe I shouldn't put it all in writing but I don't have any SDP investors to talk to face to face. I have more but I wrote enough.

[Melanie P.]

Quote from @Jim Peret:

I've got a few initial thoughts.

2.How many people are voting or how many votes are there?  Does your vote count for more or less depending on the  amount you invested?

3.What happens if they have a capital call and I don't give additional capital?

5. How can you trust someone that was so wrong on his due diligence? 

2. Should be based on percentage share of partnership, but is ultimately the GPs call. Realistically they're checking in to see how much potential capital is out there to do a capital call and that will greatly inform the GP's decision.

3. Your position will be diluted and/or eliminated. Refer to your PPM.

5. You CANNOT trust them. Not at all. 

These "investments" were pure speculation driven by a set of economic conditions which no longer exist. Expect things to get much worse before they get any better.

[Sean Barber]

Quote from @Jim Peret:

I've got a few initial thoughts.

1.Is our investment so bad that's it's only worth 38% of what we paid for it? And they plan it going from .38 to 1.5 -2.0 if it's kept? I'd think there'd be a line of experienced syndicators at 38%. Or maybe some of Brandon's Hawaiian buds.

2.How many people are voting or how many votes are there?  Does your vote count for more or less depending on the  amount you invested?

3.What happens if they have a capital call and I don't give additional capital?

4.If the future billionaire doesn't want to fund his mistakes maybe they could sell one property to fund  the other two?

5. How can you trust someone that was so wrong on his due diligence? 

I'm just thinking out loud here and maybe I shouldn't put it all in writing but I don't have any SDP investors to talk to face to face. I have more but I wrote enough.

1. Based on the financials I believe it’s that bad or worse. I also think there’s no chance that they can come anywhere close to their new projections. 

2. I believe that votes count for nothing. They don’t really want votes, they wrote this e-mail to show how “good” they are and to be able to shift blame to the LPs. Statements like “we’ve unanimously agreed to change the return structure.” They know this doesn’t matter at all since they won’t be making it above the pref return. If they were truly “good” they’d reduce their entire fee structure which is among the highest in the industry. We’re losing money and they’re continuing to get paid.

3. It doesn’t look like they’re considering a capital call. They know that’s a death blow to their company which is why they’ll instead dilute us by tricking unsuspecting investors into a new pref equity raise with unrealistic returns. I fully believe that in the end the new capital will save the deal for ODC, they’ll be able to return a small single digit EM to the pref equity holders after 10 years and the original LPs will still lose a portion of our investment. But that gives them ten years to continue raising money for other deals, charging fees and getting rich. This isn’t about saving your investment, it’s about delaying the inevitable so that they can keep the cash machine running for them.

4. Agreed but if they sell a property, that’s less fees they’ll collect every year and you’d want to sell the worst property which would be a significant hit. Two properties are holding the third one up to make the financials look not as bad as they are.

5. There are so many things in this letter that are deceptive. You cannot trust anything they say. That’s why I’m voting sell (not that it matters). I’m considering the investment a complete loss.

[Michael Wang]

Quote from @Sean Barber:

Quote from @Jim Peret:

I've got a few initial thoughts.

1.Is our investment so bad that's it's only worth 38% of what we paid for it? And they plan it going from .38 to 1.5 -2.0 if it's kept? I'd think there'd be a line of experienced syndicators at 38%. Or maybe some of Brandon's Hawaiian buds.

2.How many people are voting or how many votes are there?  Does your vote count for more or less depending on the  amount you invested?

3.What happens if they have a capital call and I don't give additional capital?

4.If the future billionaire doesn't want to fund his mistakes maybe they could sell one property to fund  the other two?

5. How can you trust someone that was so wrong on his due diligence? 

I'm just thinking out loud here and maybe I shouldn't put it all in writing but I don't have any SDP investors to talk to face to face. I have more but I wrote enough.

1. Based on the financials I believe it’s that bad or worse. I also think there’s no chance that they can come anywhere close to their new projections. 

2. I believe that votes count for nothing. They don’t really want votes, they wrote this e-mail to show how “good” they are and to be able to shift blame to the LPs. Statements like “we’ve unanimously agreed to change the return structure.” They know this doesn’t matter at all since they won’t be making it above the pref return. If they were truly “good” they’d reduce their entire fee structure which is among the highest in the industry. We’re losing money and they’re continuing to get paid.

3. It doesn’t look like they’re considering a capital call. They know that’s a death blow to their company which is why they’ll instead dilute us by tricking unsuspecting investors into a new pref equity raise with unrealistic returns. I fully believe that in the end the new capital will save the deal for ODC, they’ll be able to return a small single digit EM to the pref equity holders after 10 years and the original LPs will still lose a portion of our investment. But that gives them ten years to continue raising money for other deals, charging fees and getting rich. This isn’t about saving your investment, it’s about delaying the inevitable so that they can keep the cash machine running for them.

4. Agreed but if they sell a property, that’s less fees they’ll collect every year and you’d want to sell the worst property which would be a significant hit. Two properties are holding the third one up to make the financials look not as bad as they are.

5. There are so many things in this letter that are deceptive. You cannot trust anything they say. That’s why I’m voting sell (not that it matters). I’m considering the investment a complete loss.

Have to agree with alot of what you said here.  Also both ODC and Disrupt Equity both brag on their websites that they manage nearly 1 billion dollars of real estate but are unwilling to fork in the 3 million needed on this Sunbelt fund to keep these deals afloat?  Shows how much confidence they have in these deals and would rather raise it towards additional investors....

[Robert C.]

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

[Chris Seveney]

Quote from @Robert C.:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

 I do get the latest ads for Fund #11. First fund I have seen where people are experts in self storage, private credit and MHP.  Or is this a Fund of Fund model?

[Jay Hinrichs]

Quote from @Chris Seveney:

Quote from @Robert C.:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

 I do get the latest ads for Fund #11. First fund I have seen where people are experts in self storage, private credit and MHP.  Or is this a Fund of Fund model?

with Peer st exiting the building they left a big void for HML to recapitalize maybe ODC is doing some of this type of business.. I guess if someone gets a copy of the actual investment docs they can see what they are doing.. Keep in mind many crowdfunders first deals were debt financing for fix and flip etc.

[Melanie P.]

Quote from @Chris Seveney:

Quote from @Robert C.:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

 I do get the latest ads for Fund #11. First fund I have seen where people are experts in self storage, private credit and MHP.  Or is this a Fund of Fund model?

 To sell a fund of a fund wouldn't the promoter have to be Series 7 licensed? It's one thing to promote our own deals, properly to suitable accredited investors. But if you cross the line to recommending other investment products you're a broker/financial advisor, correct?

[Chris Seveney]

Quote from @Melanie P.:

Quote from @Chris Seveney:

Quote from @Robert C.:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

 I do get the latest ads for Fund #11. First fund I have seen where people are experts in self storage, private credit and MHP.  Or is this a Fund of Fund model?

 To sell a fund of a fund wouldn't the promoter have to be Series 7 licensed? It's one thing to promote our own deals, properly to suitable accredited investors. But if you cross the line to recommending other investment products you're a broker/financial advisor, correct?

Here is an article about it - the answer in most cases is "it depends" 

What is a Fund of Funds? | SyndicationAttorneys.com

[Zach Quick]

Quote from @Chris Seveney:

Quote from @Robert C.:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

Not positive but I think you have to recapture it just like any sale.. so if you got 50k write off you will have a 50k taxable gain ???? maybe thats correct not sure but its going to be something if you did take the accelerated write off.

I find it interesting that two realizations seem to finally be happening:

1.) Accelerated depreciation is not really all it’s advertised to be for a lot of folks. 

2.) Preferred equity tiers really act more like a secondary debt layer. It pushes down the regular LP’s and increases risk imho. 

 I do get the latest ads for Fund #11. First fund I have seen where people are experts in self storage, private credit and MHP.  Or is this a Fund of Fund model?

 Zero dog in the fight but I know they have very experienced people running their self storage division and are buying themselves to my knowledge.

[Melanie P.]

Well that's wonderful. Perhaps now that they finally got their team right they will have the capital to bail out the investors in their earlier funds. I'm sure they had so-called experts in the funds everyone is complaining about but now we have the really super duper expert experts.

[Chris Seveney]

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

[Sean Barber]

Quote from @Chris Seveney:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

 As expected, given the deceptiveness of their original email, 96% of investor respondents voted to issue pref equity to dilute us. Unfortunately, I believe that most didn’t understand that we’re being diluted and that it would be better to lose 38% now than continue to hold and still lose that 38% or more in 10 years. They likely also did not understand that ODC’s new business plan is still heavily dependent on significant rate cuts and rising rents; two things I believe are unlikely to occur.

[Jay Hinrichs]

Quote from @Sean Barber:

Quote from @Chris Seveney:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

 As expected, given the deceptiveness of their original email, 96% of investor respondents voted to issue pref equity to dilute us. Unfortunately, I believe that most didn’t understand that we’re being diluted and that it would be better to lose 38% now than continue to hold and still lose that 38% or more in 10 years. They likely also did not understand that ODC’s new business plan is still heavily dependent on significant rate cuts and rising rents; two things I believe are unlikely to occur.

seems to me the play right now is to join in on the syndication that are raising this pref equity and jumping in front of the original investors.. maybe for you its like a stock market straddle play invest in the pref equity fund to offset your loss's you may incur in the original offering ( if in fact there will be any).. But no one knows now since the can has been kicked way down the road. One thing though time can heal poor real estate investments.

[Sean Barber]

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

 As expected, given the deceptiveness of their original email, 96% of investor respondents voted to issue pref equity to dilute us. Unfortunately, I believe that most didn’t understand that we’re being diluted and that it would be better to lose 38% now than continue to hold and still lose that 38% or more in 10 years. They likely also did not understand that ODC’s new business plan is still heavily dependent on significant rate cuts and rising rents; two things I believe are unlikely to occur.

seems to me the play right now is to join in on the syndication that are raising this pref equity and jumping in front of the original investors.. maybe for you its like a stock market straddle play invest in the pref equity fund to offset your loss's you may incur in the original offering ( if in fact there will be any).. But no one knows now since the can has been kicked way down the road. One thing though time can heal poor real estate investments.

I don’t throw good money after bad. But if I believed their projections then, yes, investing in the pref equity raise could mitigate some of my losses. A better strategy… investing that same money elsewhere in a deal that hasn’t already failed.

[Jay Hinrichs]

Quote from @Sean Barber:

Quote from @Jay Hinrichs:

Quote from @Sean Barber:

Quote from @Chris Seveney:

Quote from @Sean Barber:

Quote from @Chris Seveney:

@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

 As expected, given the deceptiveness of their original email, 96% of investor respondents voted to issue pref equity to dilute us. Unfortunately, I believe that most didn’t understand that we’re being diluted and that it would be better to lose 38% now than continue to hold and still lose that 38% or more in 10 years. They likely also did not understand that ODC’s new business plan is still heavily dependent on significant rate cuts and rising rents; two things I believe are unlikely to occur.

seems to me the play right now is to join in on the syndication that are raising this pref equity and jumping in front of the original investors.. maybe for you its like a stock market straddle play invest in the pref equity fund to offset your loss's you may incur in the original offering ( if in fact there will be any).. But no one knows now since the can has been kicked way down the road. One thing though time can heal poor real estate investments.

I don’t throw good money after bad. But if I believed their projections then, yes, investing in the pref equity raise could mitigate some of my losses. A better strategy… investing that same money elsewhere in a deal that hasn’t already failed.

certainly understand your perspective ..  when i worked for a syndicator back in the late 80s and tax reform hit.. they had all sorts of problems which eventually took the entire company down and they had over 250 different partnerships ( different buildings apartments senior housing MHP shopping centers land development  the land development was what I was employed to work on.).

And this was prime Northern CA real estate Bay Area and Sacramento.. But not only did they have to stop the distributions and go for cash calls.. then you have investor revolts and then the lawyers and then the move to kick them out as GP's and then you had the lawyers making bank trying to run the projects for the investor committee's its was a CLUSTER of epic proportions and the entire portfolio was lost to the senior lenders..

Have had to witness that first hand and work through a half a dozen of my land projects were I was the lead and the GP's stopped communicating leaving it to me.. I was basically scared for life and thats why I would PERSONALLY never take on a GP role. I knew my limitations and I know there are hundreds of super successful syndicators but for me the risk of something not going right was too great so I took a different path.  Your only as good as your last deal in the eyes of most investors. That is just human nature and I get it.  Not everything i have done has been perfect etc.. WE all have bummers at one time or the other.

[Sean Barber]

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@Sean Barber

So are you saying if you invested $100,000 you will get back $38,000

Will you also owe taxes for any accelerated depreciation that was taken?

Yes, if they sell now they are projecting that for every $100K you invested you’d get $38K back. I’m not exactly sure how depreciation recapture would work when you lose money but I have heard that you’re still taxed. Hopefully someone else more knowledgeable than me can chime in on that.

 So what was the outcome on this?

 As expected, given the deceptiveness of their original email, 96% of investor respondents voted to issue pref equity to dilute us. Unfortunately, I believe that most didn’t understand that we’re being diluted and that it would be better to lose 38% now than continue to hold and still lose that 38% or more in 10 years. They likely also did not understand that ODC’s new business plan is still heavily dependent on significant rate cuts and rising rents; two things I believe are unlikely to occur.

seems to me the play right now is to join in on the syndication that are raising this pref equity and jumping in front of the original investors.. maybe for you its like a stock market straddle play invest in the pref equity fund to offset your loss's you may incur in the original offering ( if in fact there will be any).. But no one knows now since the can has been kicked way down the road. One thing though time can heal poor real estate investments.

I don’t throw good money after bad. But if I believed their projections then, yes, investing in the pref equity raise could mitigate some of my losses. A better strategy… investing that same money elsewhere in a deal that hasn’t already failed.

certainly understand your perspective ..  when i worked for a syndicator back in the late 80s and tax reform hit.. they had all sorts of problems which eventually took the entire company down and they had over 250 different partnerships ( different buildings apartments senior housing MHP shopping centers land development  the land development was what I was employed to work on.).

And this was prime Northern CA real estate Bay Area and Sacramento.. But not only did they have to stop the distributions and go for cash calls.. then you have investor revolts and then the lawyers and then the move to kick them out as GP's and then you had the lawyers making bank trying to run the projects for the investor committee's its was a CLUSTER of epic proportions and the entire portfolio was lost to the senior lenders..

Have had to witness that first hand and work through a half a dozen of my land projects were I was the lead and the GP's stopped communicating leaving it to me.. I was basically scared for life and thats why I would PERSONALLY never take on a GP role. I knew my limitations and I know there are hundreds of super successful syndicators but for me the risk of something not going right was too great so I took a different path.  You’re only as good as your last deal in the eyes of most investors. That is just human nature and I get it.  Not everything i have done has been perfect etc.. WE all have bummers at one time or the other.

That’s valuable experience. One caveat to my current experience though. I’m invested in 3 different deals with ODC, different markets, different asset classes. All performing poorly (though not all capital calls yet) and with even worse communication. My view of ODC is based upon all three investments that I have with them.