All Forum Posts by: Melanie P.

Good story, thank you for sharing. Brokers are brokers but I would NEVER work with that attorney again.

@Greg Scott When you spout off your 45% annual return number is that based on actual math or just some number that is approximate and in your head? If it's actual math what was it before your 2024 losses?

Frankly, you sound like most operators of these investments... promising sky high returns and minimal downside risk. All total hogwash. 

Filing a lawsuit is not going to help you with this "company." They're already being sued and investigated by the government. To protect your rights, get on the victim list by calling:

(800) SEC-0330 to make a report to the SEC.

(800) CALL-FBI to make a report to the FBI.

Important details to include are how you were sold the investment - any and all details of that marketing. Whether it was a suitable investment for you given your net worth and earnings - anything they told you about suitability. Have proof - where did you wire the money, have all your documents in one place. Describe each and every promise they've made, when they made it and when it was broken. Advise that you've heard their sales reps are independent contractors 1099 and don't have broker licenses.

Good luck to everyone going through this. I hope we see some action by the government this year.

Quote from @Greg Scott:

Quote from @Melanie P.:

Syndication multi-family investments are riskier and have less upside than gambling in Las Vegas.

Can't say I agree with that statement.  

Over the past decade I have invested as an LP in about 50 apartment complexes.  At this point my average annualized return is about 45%.  In today's tougher economic environment, I have recently experienced two cash calls.  One of them has a clear path to return a profit and is executing that plan well.  The other looks like it could lose about 40% of my original investment.

In Vegas, the odds are always in the house's favor.

 Greg, Would you recommend syndication investments to someone who comes here to learn real estate investing? No experience whatsoever? Possibly do not even yet own their primary home?

What's your rate of return after you mark down the principal from the two investments asking for cash calls? They have a present value of around 10% of whatever you put into them...

Quote from @Shawn York:

Quote from @Melanie P.:

Quote from @Marie B.:

For current/past BAM investors, how has your experience been? Any issues that you've experienced so far?

 Marie, 

Please keep in mind that when you see people referencing with these funds it's because they are invested in these funds, bought the sales pitch hook, line and sinker and are being told by the operator, "don't worry about the market, we're experienced and conservative so you'll get all your money back and a tidy profit. All too often, at the end of 5 years -- that's not what happened. Then the person is soured on gambling on real estate and not around here to answer questions. 

All of Bernie Madoff's clients thought their accounts were in great shape until the day the news broke. Got a statement every month from a very reputable, conservative firm. Think about it. 

Not sure what your beef is with BAM or if it's Syndications Deals in general. Whatever the case, I'd say you're wrong on this one for sure and the OP should ignore any advice you give - at least on this thread/operator. Case in point, just today BAM announced the sale of an asset. 17.4% IRR and a 2.63 Equity Multiple to investors. All the while, I'm sure they were assuring their investors that everything was going good (as they all do) but as I and others have noted, we give our recommendation to this company because their assurances that everything is going well.. is in fact accurate with this operator.
Again, not sure if your beef is with BAM or syndication deals in general, but as I can see from this thread, you've been invited to reach out to investors that have invested with BAM and discuss... and you haven't so, @Marie B. take note of that and realize that some people are just haters.
@Marty Summers Figured you'd be interested in seeing this LOL

Shawn, 

Wow, you really put me in my place with that post, little man. Tagging people who have no choice but to believe there is a light at the end of the tunnel is not persuasive. Time will reveal all and hopefully (for the investor's sake) I will need to come back here in a couple years and make a few apologies. 

With your background you know damn right well that private real estate syndications are unsuitable for the VAST majority of visitors to BiggerPockets. Doing anything to burnish the reputation of the sick and rotten syndication industry on a public forum that caters to new, unsophisticated investors is disgusting behavior. Shame on you and happy new year.

Quote from @Jefferey Eutsay:

Quote from @Melanie P.:

Quote from @Jefferey Eutsay:

I'm considering making an offer on a 36-unit multi-family property. I have a potential private lender, but I need to determine if this is a viable investment opportunity and explore the best financing options

 You posted this same thing three times - in two it was a 36 unit and in the third a 32 unit.

Do you have any other details about the transaction or perhaps wish to share your initial analysis so the volunteers here can poke holes in it or tell you why you're right?

Based on the tenor of your posts, I've got to ask - do you have your primary residence squared away? Because that is the first investment anyone investing in real estate should make.

. 

My apologies. 32 units. I will potentially move into one of the units for some time

Purchase Price: $1.98M

Assumable Existing Financing: $1.18M @ 3.48% ($5,563/month) Seller Carry: $300k @ 3.5% (5-Year Term)Down Payment: $525k (Buyer to Bring)Buyer pays all closing.

 I like the numbers you're working with. Immediate concern is what is your plan for operational capital, deferred maintenance and rehabs as they turn over. If you're thinking of living here I imagine operating this will be a challenge.

You'll have the same potential upside range wherever you do it - 10-40% are probably the outside ranges. You just have to decide if you want that to be of a property you acquired for $150,000 or $400,000. The math is obvious but there's a natural tendency to go for properties you can obtain at a lower basis. Start networking with wholesalers for more opportunities in your home area.

A "fronter" is like a "junior broker" in the movie, "Boiler Room." Someone who gets prospects on the phone all day, tries to get them interested, qualifies them and then connects to them to a "consultant" who pitches the various investments they are touting that week. 

The other odd thing is the lack of focus. They're all over the place. They have ghetto Class Ds in Texas and Philly, a REIT, working farms, an operating golf club, apartment complexes, cryptocurrency... it's almost like whenever a very hot prospect gets through all their different asset classes, they simply invent another one. These businesses do not have great overlapping synergies and RAD does not have a reputation for being good at any of them.

Former employees have reviewed their time working at RAD on Reddit and Glassdoor - several of the reviews mentioned it. I've also been directly in touch with a "fronter" in their Ontario, CA office who described the pressure-cooker type of environment, revolving door and nonstop lying. Management treats line employees quite poorly and lying is just part of the job. The company is in a huge crisis - he said the entire accounting department walked out while he worked there. Can you imagine calling hundreds of leads a day for "investments" and seeing all those who keep track of the dollars you're raising exit in tandem? Even the CEO's younger brother decided not to hang around - whatever his reasons are - it's too late for him unless he returned all the money he took out and fully disclosed  every illegal act he has personal knowledge of BEFORE the SEC/FBI show up at his door.

I referred the "fronter" to a whistleblower law firm, but who knows if he followed up. I feel it's important to get that information into the investor complaint to give whoever reviews the allegations a 30,000 foot view of the variety of warning signals on full display by this outfit. 

A simple source document review correlating the company's bank records of money in, investor principal owed out and total out for real estate currently owned would likely reveal a lot. The assets I see them actually acquire do not correlate to the money they've raised.

Quote from @Arthur Crum:

Hello,

I Just wanted to give everyone a quick update on the RAD Diversified scandal that is currently unfolding. As of April 1, 2024, RAD Diversified (a REIT), has officially put a freeze on withdrawing any and all funds from the REIT. If I had to speculate, I would say they are facing some serious liquidity issues. Interestingly enough, I came across an article in the Philidelphia Inquirer that raised concerns about the REIT two years ago. It's pretty much spot on. Looks like your classic Ponzi scheme. It would appear good ole Dutch has been using new investor funds to pay liquidations i.e. robbing Peter to pay Paul. I guess the well has run dry.

I myself was duped into investing $5000 (unaccredited) into the fund and will now no longer be able to liquidate any portion of my shares. The URL provided above will take you to official statement that RAD has provided to the SEC. Personally, I doubt its authenticity, but that's the direct information I was provided with from Alexander Prock, as of one hour ago. I also know that RAD's accreditation with the BBB has been revoked due to the massive influx of similar complaints that have been pouring in since the official statement was released on April 1st, 2024.

I would strongly advise ALL BP members to stay far away from this scam. I highly doubt I will ever see my money again. I would sincerely hope that the SEC has begun looking into this and/or the FBI. And, by the way, Dutch Mendenhall the CEO of RAD, has been a member of the BP community now for several years so feel free to chime in bud. Below is a copy of the SEC statement. It really makes me sick that these scam artists run rampant while the SEC does absolutely nothing to combat the issues. Anyway, please feel free to do your own due diligence but it looks like we all got got.

"On April 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to continue the temporary freeze of the Company’s redemption program. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after April 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the redemption program or to continue to pause the redemption program no later than July 1, 2024."

 Arthur - As I mentioned to another poster above, please call the SEC and give them all the details about your interactions with RADD, about company insiders looting their investment capital in the bright light of day through the use of multi million dollar promissory notes between the Mendenhall family and the company, that they've been paying their sales force in Ontario and Pennsylvania via 1099 and that a review of the real estate assets in Philadelphia newspaper and Texas that is subject to foreclosure litigation does not match up to what they should have been purchasing based upon what is described in their sales presentations.