Real estate syndications attract accredited investors seeking tangible assets with predictable cash flows. The investment thesis is sound — until the sponsor misrepresents the property's income, conceals existing debt, or operates a capital stack that cannot perform as projected. The property is real. The returns promised are not.
The offering memorandum shows 94% occupancy generating $2.1M NOI. Actual rent rolls show 71% occupancy and deferred maintenance the sponsor has no intention of addressing. The gap between projected and actual cash flow is the fraud.
Investors believe they're entering a 70% LTV deal. They're actually entering behind mezzanine debt, preferred equity, and a construction loan the sponsor didn't mention. When the capital stack collapses, common equity is wiped out first.
The sponsor's management company charges above-market fees. The sponsor's construction company bills for improvements never made. Capital raised flows to the sponsor's ecosystem, not the property.
The LLC operating agreement gives the sponsor unilateral authority to refinance, sell, or restructure — stripping investor protections that appeared in the PPM but don't appear in the actual operating documents.
Every recorded lien, deed of trust, and UCC filing against the property and the holding entity. What debt actually exists versus what was disclosed to investors.
Bank statements, not rent rolls. Rent rolls can be fabricated. Bank deposits cannot. We verify income against actual deposits, not reported figures.
Prior syndications by the same principals — how they performed, how they exited, and whether investors received distributions as projected.
Every payment from the property entity to any company controlled by the sponsor. Fee structures, construction invoices, management charges — all cross-referenced against market rates.
Where did investor capital actually go? Acquisition, reserves, or sponsor fees? We trace fund flows against use-of-proceeds representations.
Real estate fraud carries some of the strongest recovery potential because the underlying asset exists and cannot be hidden. The property can be liened. Personal guarantees — where they exist — create individual liability. Civil recovery actions can pursue both the entity and the principals simultaneously, with the real property serving as a documented, immovable asset base.
All submissions are confidential. An analyst will respond within 24 hours.
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