Western Wealth Capital: What do you know about them?

[Josh Cochran]

They have a new offering as of 2/27/2019

What do you know about them?

Have you invested with them in the past?   What was your experience?

Thanks in advance.

[Kevin Hoover]

Western Wealth's Heather Ridge just sold. Returns where  -98.3% .
I got a check for  $1751.. The entire results for a  100K investment.
I guess that should teach me on the wisdom of not checking debt structure well before hand.

[David S.]

Quote from @Kevin Hoover:
Western Wealth's Heather Ridge just sold. Returns where  -98.3% .
I got a check for  $1751.. The entire results for a  100K investment.
I guess that should teach me on the wisdom of not checking debt structure well before hand.

 Sorry for your loss. 

According to press release found on the web, it was a 2021 purchase...so that's a huge loss over just 2 years.

https://www.westernwealthcapital.com/western-wealth-capital-...

For those looking to learn, can you share why they were forced to sell so soon? Expiring rate cap? Didn't get the rents they were projecting? High than expected operating expenses? Did they attempt a capital call to save the deal? Did GP sell to avoid being called by lender on personal guarantees under the mortgage debt? Can share a recent report?

[Kevin Hoover]

They bought on a really small cap rate, then taxes and interest went up. I think in a bad neighborhood as well.  So they where no longer cash-flowing. Actually very negative cash flow rates.

WWC didn't have the appetite to fund the short flow themselves, as NOI dropped so much. They have done capitol calls on other projects but investors are seemingly pretty slow to give them more.
WWC seems to be trying. However their management  fees are pretty high. Fundamentally their business model was so unprotected and with the skinny margins  it was waiting to happen. 
I will find  the actual report and post it here..

[Kevin Hoover]

The concept of absolving themselves of personal guarantees , most likely is the biggest reason to sell. They seemingly getting pretty quick to sell at LP's expense if needing  cash flow is negative .

The captiol calls they are doing are coming in pretty low. So its sounding like they will sell more simply because the cash isn't coming in.

I guess this is what happens when a outfit overextends themselves and sun doesn't shine for a year or three.

[Adam Baugh]

I invested as an LP in several deals with WWC, Buck Joffrey, Dante Andrade, etc.  My flaw was failing to appreciate the rate cap lock and short timing.  Like Kevin Hoover above, I lost all equity in 4 of the deals they sold (or which are pending for sale).  Despite them performing inline with rent projections and occupancy, their flaw was in a short-term rate cap without any ability to refinance. I am a high-wealth earner with years of employment ahead for me, so I will not feel the weight of this loss other than shame on me for not appreciating this risk better before committing. I own that mistake, but I haven't been impressed with WWC efforts in how they try to pitch LPs to re-invest more money in sinking ships.

[King-yi Chan]

Quote from @Kevin Hoover:

They bought on a really small cap rate, then taxes and interest went up. I think in a bad neighborhood as well.  So they where no longer cash-flowing. Actually very negative cash flow rates.

WWC didn't have the appetite to fund the short flow themselves, as NOI dropped so much. They have done capitol calls on other projects but investors are seemingly pretty slow to give them more.
WWC seems to be trying. However their management  fees are pretty high. Fundamentally their business model was so unprotected and with the skinny margins  it was waiting to happen. 
I will find  the actual report and post it here..

 Hi Kevin, do you have the report that you referenced? Thanks!

[John Cho]

These old comments didnt age well. 

[Kevin Hoover]

Quote from @King-yi Chan:

Quote from @Kevin Hoover:

They bought on a really small cap rate, then taxes and interest went up. I think in a bad neighborhood as well.  So they where no longer cash-flowing. Actually very negative cash flow rates.

WWC didn't have the appetite to fund the short flow themselves, as NOI dropped so much. They have done capitol calls on other projects but investors are seemingly pretty slow to give them more.
WWC seems to be trying. However their management  fees are pretty high. Fundamentally their business model was so unprotected and with the skinny margins  it was waiting to happen. 
I will find  the actual report and post it here..

 Hi Kevin, do you have the report that you referenced? Thanks!

 WWC  threatened litigation. I had it removed.