Quote:
Originally Posted by tennisguru
What did the manager do that warranted removal?
-Allocation of offsite management expenses to the property. This expense was already covered in a separate management fee paid as a percentage of revenues.
-Showed property expenses for repairs that had not yet been completed.
-Manipulated move out dates to artificially inflate physical occupancy. This did not impact economic occupancy or actual revenue, just physical occupancy calculations.
There may be more uncovered in the coming days as the investors take a closer look at the books and conduct physical inspection of the property.
A key point to be made is that the investors had the ability within the company agreement to remove a non-performing manager. Some syndications are more investor friendly others are more syndicator friendly. You must know the language and DYODD on the agreements.