Syndicator Threatens LPs for Negative Comment about them On BP

[Scott Trench]

I don't know who needs to read this, but I feel it needs to be posted, publicly.

 Recently the following happened:

- BP Member posts negative statement about syndicator to these forums, involving lost money, poor communication, etc.

- Syndicator is radio silent, apparently pretending not to notice dozens or hundreds of discussions about their business. Syndicator does not respond to thread.

- Syndicator intimidates investor (who just lost tens or hundreds of thousands of dollars investing with said syndicator) with legal threat

- Terrified LP, already having lost money, now is scared that wealthy syndicator could ruin them, and asks me to remove the forum post discussing the company

While I am in no position to verify the truth or falsity of claims made on these forums by LPs or GPs, to me, it seems like a special hell is emerging for investors where the following reality is possible:

- Invest tens or hundreds of thousands of dollars with a syndicator

- Lose all or most of this investment

- Get ghosted/poor communication from sponsor

- When they complain or ask for help, get threatened with legal action

I told the person with the original post the following: 

- Name the syndicator, and I will publicly call them out for their threat, if they confirm who it is. I will invite the syndicator to confirm or deny the threat publicly. The member who messaged me has not confirmed who it was and named two people in their post. Otherwise, I'd be naming them right now.

- If the syndicator actually sues this member, we will make the litigation a headline issue in every major BiggerPockets content channel, including YouTube, Blog, Podcast, and these forums. We will cover the story in detail, with regular updates, through to resolution. 

After all, Investors need to know which sponsors sue their own investors after allegedly losing their money and ghosting them.

- If the OP is lying, we will expose that and call out the syndicator's innocence, of course.

- If the OP is generally telling the truth, we will expose the syndicator's performance and behavior in threatening and suing their own investor as far and wide as we possibly can. We will evaluate their portfolio, estimating the purchase price and current value of every deal they've done from the beginning of time. We will research occupancy rates, and report on outcomes.

I am disgusted by the accusation, if true, made by this recent member, and while this is the most egregious situation to date, it's part of a disturbing pattern. The power dynamic between GP and LP is out of control. I have received multiple DMs from terrified members intimidated by wealthy sponsors, asking them to pull down their forum posts, even though they claim they posted truthful information.

We will rectify that power dynamic. 

Maybe some GPs can intimidate their own LPs in private. But, not here on BiggerPockets. If you do that, we will come after you.

Syndicators - by all means, defend your reputation and set the record straight. If someone says something untrue about your business, respond and tell us what's really going on. 

But, be warned, GPs - if you threaten your LPs for posting generally accurate negative stuff about you on BiggerPockets, we will make a public example of you for all to see.

[Brian Burke]

@Scott Trench good on you for taking this position.  If the statements made in the post that seeded this are true, and what you said in this OP are true, this is one of the most disgusting things I’ve seen in my multiple decades in this industry, and gives the entire industry a black eye.

If this company pursues litigation, I would love to be on that jury.  Foreperson: “your honor, let me get this straight, the plaintiff lost the defendant’s money, didn’t tell them, ignored their calls, and left their voice mail box full so no one could reach them, and now the plaintiff is asking me to award them damages because the defendant complained about it?”  Good luck with that one—I doubt any syndicators would find a sympathetic jury in such a case.

Scott, you and I have debated the concept of “skin in the game” for years. I preached in “The Hands-Off Investor”, as well as on stage every year in my presentations at BPCON, that one of the strongest forms of “skin in the game” is “does the sponsor have a brand to protect?”  I think this is the strongest example I’ve seen illustrating what I mean by that statement.

A sponsor that has a strong brand to protect (meaning not only are they well known, but have a positive track record and a long time in business) will go to the end of the earth to protect their investor’s interest.  If things aren’t going well, they will clearly and transparently communicate with the investors.  They will answer every question and respond quickly to every inquiry. If they got called out publicly, they would tell their side, even if that means admitting they messed up.  They would do all this because if they didn’t, people would find out and then their career as a syndicator is over. Because of their strong brand, they couldn’t just resurface the next day with a new name and new logo and continue on, because people would know and not trust them.  Weak brands can just change name and logo and start over, and most people wouldn’t know the difference.