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.
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I think Sun Exchange basically lied on the ROI. It was increased by not including prepaid expenses. This was dishonest and probably illegal.
ReplyDeleteSometime I wonder if a class action would be good, since other investors won't fall for the same scam.