All Forum Posts by: Lisa Jones

As of now, AVAF1 has a funding gap of approximately $10M. They said they will share what the plans are to close the gap once all the funds are in but they are still moving out with the execution plan as scheduled so we shall see.

0 Votes

Those are all good points.
i’m in fund 1 and was very, very close to investing in Fund II but decided against it at the last minute based on some gaps in communication that made me a bit uncomfortable. I am so glad I decided against it.

1 Vote

Does this mean that AVAF2 has a capital call as well? Is that the latest? Does anyone have the email announcement?

0 Votes

My thought process has been: Sure, I’m happy to invest in all these new deals you are aggressively marketing as soon as you return my invested capital from fund 1 of course.

4 Votes

Quote from @Scott Rye:

I want the fund to survive, thrive and payback LP's.... But I have lost confidence in the decisions of this group for a variety of reasons. The Ashcroft Fund 1 capital call pays back the GP nearly $10-11M for purported 'loans" they made to support the fund last year....Even though LP's were not advised/notified last year that the GP's had to make such "investment". I gave them the opportunity to do right with our funds during the initial investment (and they might make it workout), but now there are just too many red flags with the Capital Call and the new deal....Do not let the friendliness for Joe, Frank and there podcast sway you...do your continued DD and ask the questions...I will not add funds to this capital call. I will take the haircut/dilution risk, go smoke a bunch of "hope-ium" that they can squeeze blood from this turnip in 3,4,5 yrs from now...If not, such is life. By way of example, the sum of all of our Syndication investments are about 3% of our NW. Be careful how you size your investments and adjust for your level of risk and ability to withstand to loose on occasion...Good luck to all...Cheers!

There’s are al great points. I’m curious: is this an all or nothing raise meaning they must raise the total amount to execute the entire plan or are they able to keep partial funds to pay themselves back? For example, as of today, the claim to have raised $

0 Votes

@Michael Smythe

Usually 2-4% higher than the standard fee. And that’s the minimum. For example, my property in a B location with market tenants always cost less to manage which is my point. In my experience overall- costs are going to be higher. As they should be, it takes more effort to wait for inspectors, make repairs, ensure rules are adhered to, etc. and that should be factored in. Also, I am sure there are many quality property managers out there, but unfortunately the pickling were slim in my particular sub market.

0 Votes

I have found it very difficult to find an effective property manager to manage section 8 tenants. They require a lot more hands on care and this could put extra stress on you if you are not local.

0 Votes

Quote from @Victor Patel:

Troy,

Some landlords prefer Section 8 while others will shy away from it altoghether. I am a real estate broker and investor in the Cincinnati area. I have dealt with a many section 8 and non section 8 tenants over the years and got to the point where I didn't want to deal with section 8 anymore. While the rent is guaranteed, I learned that the maintenance issues far outweighed any rent guarantees.

Section 8 conducts yearly inspections which is great. Some issues are to be taken care of by the tenant and others by the landlord. If the tenant doesn't take care of their issues than you become responsible. 9 out of 10 times you become responsible.

I always conducted my own inspections well ahead of any section 8 inspections to get ahead of the game and fix any issues that may arise due to section 8 inspections. However, maintenance costs seemed to be never ending. There was always a leaky faucet, clogged toilet, broken light fixture, lost keys, overgrown grass, trash in the yard, etc. Many times the tenant would not pay their portion of the rent on time if at all.

Not trying to sway you one way or the other but just trying to give you my experience of 30+ years as a landlord and broker. Reach out if you have any questions!

These issues were less prevalent with tenants that were not on section 8.

This is a great point. The section 8 inspections are something to account for. A lot of people are drawn to the guaranteed rent money but I found it comes at a significant cost and I did not think it was worth it. One thing I learned the hard way was that location matters and local laws matter. If you are in a “tenant friendly” location where the rules and laws are in your tenants favor and not the landlord, renting to section 8 can literally bankrupt you. I was in a jurisdiction that did not allow tenant evictions unless under certain circumstances and I had predator tenants that knew how to work the system and stay there for years without paying rent and I had a hard time evicting them. Go in with your eyes wide open.

0 Votes

I rented to section 8 tenants for 10 years. It will test you. It helped me realize the hard way that location really does matter. My biggest challenge was finding an effective property manager as I was not able to manage it myself. I have posted over the years on this topic. Spoiler alert: in 10 years I never found one. In my experience, D class neighborhoods attract D class property managers. A class property managers will opt for better neighborhoods. The caliber of managers willing to go to those neighborhoods was low. Again just my experience. In retrospect, it’s best to be hands on if you can and manage these types of properties yourself. It’s better to have a presence at the property and I have found the tenants to be a lot more high maintenance. They are also hard on your properties and require extensive repairs. I’m happy to share more of my experience if you’d like to DM me. One positive to note, during Covid when tenants stopped paying their rent ( and the government supported them in doing so) it was great to have section 8/ at least I got the minimum amount to pay the mortgage!

0 Votes

Quote from @Kelsey Bowman:

If one does not participate in the capital call and thus gets diluted by 16.5% - how does this affect your returns?

For example, Ashcroft is stating that at a 5.00% exit cap rate, the EM on Class B original equity would be 0.82x. Would 16.5% dilution result in a 0.68x EM [i.e. 0.82 x (1-0.165)]. Or is this not the correct way to apply the 16.5% dilution?

Any help is much appreciated!

I have the same question. In my call I was told the worst case scenario for Class A investors, if the Capital call fails and they don’t contribute to it is 70% of your original investment will be returned upon sale of assets (given it’s not ideal to sell now). I assume if the CC is successful the return will be slightly better than that?

0 Votes

All Forum Posts by: Lisa Jones

Lisa Jones has started 7 posts and replied 38 times.

Post: Ashcroft capital: Additional 20% capital call

Post: Ashcroft capital: Additional 20% capital call

Post: Ashcroft capital: Additional 20% capital call

Post: Ashcroft capital: Additional 20% capital call

Post: Ashcroft capital: Additional 20% capital call

Post: Section 8 - What's the catch? (Out-of-State Investing)

Post: Section 8 - What's the catch? (Out-of-State Investing)

Post: Section 8 landlord

Post: Any one has rental in D class neighborhood.

Post: Ashcroft capital: Additional 20% capital call