RAD Diversified, a REIT co-founded by Dutch Mendenhall and Amy Vaugn, operates on a principle that age is just a number when it comes to properties. Doesn’t matter whether it was a couple months old or a few decades old, they’ll look beyond that and judge by its “bones” and structure. If the property was within their rehab budget, they’ll snag it no problem. Are they doing great with this approach, though? Find out in my review below.
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Seeing the price per share, you might think that, yeah, RAD Diversified might be doing well. I’ll say that you better think again. I don’t blame you for not knowing better, the said program is actually hyping this bit to death. Heck, it’s the first thing you see on their site. But, yeah, that figure doesn’t tell the whole story.
Proof is in the number, they say. They’re like, look at our share price that started from $10 to now $20.86. Your jaw better drop, they imply, because that’s a 108.6% increase. That’s a lot to be fair, but it’s not as impressive if you know the context. Far cry from their claims of market-beating performance even.
For one, RAD Diversified is one of the very few that only offers non-traded REIT. Technically, this means you can only acquire the stocks through brokers and not through the open market. The implication? They can freely set the share prices as they see fit. Wait, instead of set, the more appropriate term on what they’re doing is manipulate. Yup.
See, the increase in prices is not directly tied to their brilliance (if there’s any) and investors taking note of such. Instead, it’s based on a formula where the main factor is valuation of their assets, something they’re called out, not only here but also on their ads, for exaggerating.
For example, they listed down a sh*tty boarded-up house as a property churning out around $14k in rent per year. Yet it’s goddamn obvious that it was not rented out at all. Even the lapsed license mentions its vacancy. That’s just one of the many examples that they’re doing some hocus-focus on the values to balloon their share prices.
Going back, RAD Diversified being a non-traded REIT also means that the share prices don’t mean much on your investment’s profitability. You can’t just trade it and profit off the difference between the price when you bought it versus the current market price. What you can only do is pray to have your request at their share redemption be accepted. And I hate to say it, but it’s like waiting for a miracle to happen. They can hold your money hostage forever and they will.
Moving on, another reason that shows how share prices don’t mean much is their choice to do some misleading BS on everything. Their ads, their sales talk as revealed by their disgruntled ex-employee, among others. And yes, they’re said to be terrible employers just like how they’re also terrible landlords. About the latter…
Remember how they say that age doesn’t matter when it comes to properties? It sure does when you’re accounting the age a property has been with them. It usually gets worse with them. They do have a budget for rehab, albeit little given the shoddy work on a lot of their properties, but sure enough, they don’t have one for maintenance.
Or maybe, their stingy ass doesn’t care at all. The audacity of them to increase rent when they can’t be bothered fixing water leaks and pests problems. I’m disappointed, but not surprised because they also don’t give any f*cks about state regulation. I’m talking about the lapsed licenses that they don’t bother renewing, yet they’re still operating like they have one.
TBH, the things I mentioned above should already be enough to discourage you to invest in RAD Diversified that costs $1,000 minimum. Despite that, I haven’t even spilled the biggest reason why share prices don’t matter and why you should avoid them like a plague, which is them actually incurring millions of losses. Now, where did they get the dividends to share, then? From their own words, it’s from the funds of new investors. No sh*t, that sounds like a textbook ponzi scheme to me.
To top it off, the audacity of them again to pass the consequence of their own incompetence to investors with threats of significant investment losses if they don’t achieve their new target funding. Like what? Do a better job on managing your assets first before asking for more money. Seriously.