Sunday, August 16, 2009

it's quiet out there!

well, it's the dog days right?! and it's been so very quiet at this blog, but i've yet to invite the entire "big list" as i was afraid news would filter to sun1031.

at this point since we all seem dead, i'll soon be inviting that list and we'll see what happens.

one thing that infuriates me is that, personally, i was sold a bill of goods thru a Prudential broker, that didn't measure up to what was told to me. i'll be addressing that in a later post.

another thing is that Sun1031 acting like in the beginning that they were "partners" with us, etc.

but when some of us asked for appraisals after we bought, they would not give them up calling them proprietary
[meaning: a party who exercises private ownership, control or use over an item of property]. hmmm, where's that in our contracts?

RED FLAG on true value,
or as SUN1031 calls it "market value".

now, you'd think owners in a property (& for those of us with a bank note) that SUN1031 or the bank would easilly show the appraisal that backed the loan.

goes to show you there HAD to be shenanigans between SUN1031 & the bank, First Bank Of Beverly Hills (FBBH) which has FAILED and who presently is under the auspices of the FDIC.

we've asked the FDIC to let us buy out our loan at a discount just as they WILL do in the future to an investor. they have stymied us on that, so we are now strongly considering not paying the bank note to try & gain leverage.

REMEMBER: these are nonrecourse loans – which btw, banks don't write anymore – which means nonpayment does NOT go against personal credit or personal assets besides the property in question.

Sunday, June 14, 2009

Why did SUN1031 do Nothing?!

Before the real estate market truly turned dour, most of SUN's Tic's were underperforming and bleeding $$. For a while, a lot this was obscured by CUSA's constant excuses when owners complained or sensed what was coming. CUSA wanted to just keep taking the $ and they did. They knew what was happening.

CUSA eventually blamed SUN1031 for obtaining (overall) poor properties and SUN1031 blamed CUSA for poor management.

You know where owners ended up.

There was also the 'claims' that SUN1031 did some manipulation of paying some distributions in the beginning of a property's payouts to further hide the facts that a property was going to have trouble.

One of the most perplexing issues is how SUN1031 could not do better for their investors as this was coming to pass. It created ill will among a lot of people who talk to other people across the nation.

Sun's investors have not only lost confidence AND respect for SUN1031, they feel they've been defrauded.

As business owners, how could SUN1031 NOT issue damage control and try to help. They are either complete frauds or inept. When a company would sit by and not help their "customers" is bizarre business behavior.

Oh yeah, they have to "remain neutral". Ever hear that from SUN1031?

How many people would now recommend SUN1031 to anyone?!
Thus, they will have to continue to obtain new clients who don't know their history. That's one of the hardest ways to run a business – to discard current customers. Unless you've made so much from those first customers they simply don't care.

SUN1031 sure wasn't neutral making a ton of money on investors' backs, selling properties at inflated prices with dubious 'pro rata', disclosures.

Thursday, June 11, 2009

on a brighter note?

Many of us know people (or have heard) about the DBSI bankruptcy – mainly filed thru the State of Idaho.

DBSI got into trouble by guaranteeing returns on investments (ROI) that they could not keep up to investors. Thus, they filed for bankruptcy because it drained their cash & assets fell, etc.

To compound this problem, when released from bankruptcy, the properties (@ 250 of them) were released to a "custodian" who then shopped for new property managers to manage, etc.

The PM's chosen were not the most "cost efficient", thus owners have seen high fees PLUS cash calls. one property i know about is said to be paying $3,500 a month for PM & Asset Managing, plus a $10,000 cash call.

It just seems impossible to make that work out for investors.

i also read that FOR1031 also has "gotten in trouble" with the State of Idaho. i did not hear FOR1031 going through bankruptcy.

SO, the bright side for SUN1031 investors is that the ROI's weren't guaranteed, though SUN sure did insinuate the roi's would
continue as originally stated.

Saturday, June 6, 2009

CUSA (mis)deeds

Sat. June, 6, 2009

There are MANY things that owners have complained about re: CUSA management of their TIC properties.


here a few of my favorites:
  1. when one property was replaced with new management, the new PM found that CUSA had NOT been collecting rents for months. But, CUSA was still charging their fee(s) for rent collection, taking it from the property's bank account.
  2. this same property was found to be in arrears of cash flow to the tune of $60,000+.
  3. this property had uncollected CAM, some as long as 2 years old.
  4. Landscaping vendor charges billed by CUSA were close to $9,000. Actual invoices were $3,500. To boot, the 'landscaping' was close to nonexistent.
  5. when new management took over there was a zero balance in the bank account. thus, there was no money for the next mortgage payment which was due in @ 10 days. the last budget presented showed a surplus of over $21,000.
  6. The property was messy, unclean, vacant space had dirty windows, old signs, overflowing dumpster surrounded with trash, a large pot hole, broken air conditioner in one unit (that's leased), the property did not conform to local standards, the main sign was rigged & stayed lit 24 hrs. a day (owners paying the electricity)... among other things. no wonder tenants stopped paying rent!
note: CUSA did NOT inform owners of these situations even though they had long conference calls re: the status of the property.

You also have to wonder how SUN1031 vetted potential property managers, when it came to hiring CUSA to manage @ 30 properties for SUN1031 (that #'s a 'guess' that's been mentioned). it's been said that currently 21 out of 30 properties have replaced CUSA.

CUSA's management seems to have more experience with Hotel Management, not strip or office buildings.

As many of us have learned the hard way – and SUN1031 should have had some foresight re: this as they are (supposedly) the Pro's – a property has to have an honest manager for the property to stay viable. if management is draining much of the property's income/cash flow, how long can that property survive? Over pricing doesn't help either.

EVERYONE should partner in these types of properties to be successful – owners, property managers and tenants.

Friday, June 5, 2009

new blog for SUN 1031 TIC Investors to SOUND OFF / take action

hi all:
a few people have mentioned starting a blog (or web page) so people who search for SUN1031 TIC's (tenants-in-common) get first hand accounts on the investments they own thru SUN1031. some owners are on an email list. but many are not, so perhaps this will also inform other owners of SUN1031 TIC properties & their dubious dealings.

hopefully, people can do a search & this page will come up to inform people.

MOST of these properties began selling in 2005.
recently tho, SUN has a new sale out offering 9.12% returns.

there's plenty of info floating around re: these property investments in SUN1031 (located in AZ) TIC's and their choosing of a management company, CUSA, that did a terrible job while raking money from our investments via high fees.
SUN1031 has sat passively by while watching this go on.

SUN 'flipped' properties to investors at a very large profit – most above @ 40% + gain – and without the benefits of appraisals to investors.

SUN1031 also insinuated that the original returns would be ongoing while the property was owned. actually, this was only in the first year of owning. SUN NOW spells that out clearly in offerings.

furthermore, the bank that SUN 1031 did MOST of their financing thru, First Bank of Beverly Hills (FBBH) has been recently seized by the FDIC. gee, wonder why?

the way SUN1031 set up these TIC's they were doomed to have trouble. just a few reasons...
1) overcharging for the properties.
2) choosing a poor management co. who charged HIGH FEES.
3) overstating returns & quality of the properties and the leases.

ok let's see how this goes & please post your stories re: this.