A couple weeks ago, I was talking to a texan resident that came up to Washington State to help the company I work at, train our team for a new product launch.

When I saw this product offered through CapFree Xchange and Appreciation Homes (out of Dallas) I was hesitant.

I've had smooth loans close with Kiavi and I've had rough ones, same with Roc.When Loans start to be troublesome:1) The borrowing entity docs are a mess2) The appraisal numbers are lower than expected3) Messy background reports4) Loans happening in an environment where market/rate fluctuating unpredictably 5) Your loan officer and their team are poor at their job6) Title issues that depend on county docs, that can be slow and painfulThere's more but it's Friday and I'm tired....

Its a very poor situation for the original owner to be on the mortgage for years and years without the benefits of ownership and the control.  

With less experienced or just poor planning operators, it isn't uncommon that they spend years distributing all the cash out to the owners, and then the time comes for a multi million dollar refresh to maintain the hotel brand, and no one wants to cough up the money back into the entity.

You LP lost everything.Other ways, poor property management team isn't managing property well, and syndicator bought in tertiary market with only one or two managers available and no way to self manage.  

Another common problem is poor due diligence—jumping into deals without verifying the borrower or collateral often leads to future regrets.I’ve also seen over-leveraged borrowers cause trouble, prioritizing other creditors over private lenders.

To avoid going through the same poor experience, keep reading.Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.It's often a case of not doing enough research, as they don't know what they don't know!

Allowing the team to assist in some of my "Busy" work, so I can handle more productive tasks. 3.)

When you go to a Bank or Credit Union, they can only offer you what products that bank or credit union offer.