Ashcroft Capitals

Key Points

• Financial Distress: Ashcroft Capital paused Class A distributions in its first value-add fund in October 2023, citing soaring rate cap costs and underperforming Atlanta properties.

• Capital Call Shock: In April 2024, investors in the Elliot Roswell property faced a 19.7% capital call to cover rate caps, renovations, and lender covenants, with threats of total capital loss if they didn’t comply.

• Lawsuit Allegations: A 2025 lawsuit accuses Ashcroft of inflating returns, downplaying risks, and prioritizing fees over investor interests, potentially violating securities laws.

• Investor Backlash: Forums like BiggerPockets and Wall Street Oasis buzz with complaints about Ashcroft’s mismanagement, with some calling their operations “terrible” and questioning their competence.

• Censorship Concerns: Ashcroft’s heavy PR push and evasive responses to allegations suggest an attempt to control the narrative and suppress negative publicity.

Overview

Ashcroft Capital, founded by Joe Fairless and Frank Roessler, is a multifamily real estate syndicator focused on value-add apartment complexes in the Sun Belt, particularly Texas, Florida, and Georgia. They pool investor funds to acquire, renovate, and manage properties, promising passive income and capital appreciation through their “Best Real Estate Investing Advice Ever” podcast and slick marketing. With a portfolio of over 20 properties and thousands of units, Ashcroft positions itself as a go-to for accredited investors seeking multifamily exposure. But beneath the hype, their funds are struggling with rising interest rates, oversupply issues, and operational missteps that threaten investor returns.

Allegations and Concerns

• Inflated Projections: A 2025 lawsuit claims Ashcroft’s offering memoranda touted unrealistic IRR and cash-on-cash returns without adequate disclaimers, allegedly breaching anti-fraud provisions of federal securities law.

• Risk Understatement: Plaintiffs allege Ashcroft downplayed risks like rent declines and cost overruns, leaving investors blindsided by market shifts.

• Fee Prioritization: The lawsuit accuses Ashcroft of structuring deals to favor their own fees and equity promotes over limited partners’ returns, raising questions about fiduciary duty.

• Capital Call Coercion: The 19.7% capital call for Elliot Roswell, announced in April 2024, came with a stark warning: pay up or face a total loss of capital if the property is sold in a distressed market. Investors felt strong-armed, with little time to comply.

• Market Misjudgment: Ashcroft’s Atlanta properties, like Elliot Roswell and Elliot Apartments on Abernathy, are underperforming due to a “huge supply issue,” with new units flooding the market and slowing leasing.

Customer Feedback

• Negative Feedback:

  • A BiggerPockets user vented about the capital call: “I question if this is really their final approach and wonder [if] changing the deal structure in times of the most dire situation during high interest era is the right approach.” The tight timeline for smaller investors was a sore point.

  • On Wall Street Oasis, a user slammed Ashcroft’s operations: “Ashcroft seems like a terrible operation if they keep paying inflated rate lock fees. These guys milked all the investors in the last 10 years and are now trying to maintain their status quo.”

  • Another BiggerPockets post on Fund 2’s 0.77 DSCR raised alarms: “For Fund 2 investors, would it be beneficial for Ashcroft to sell the buildings now so we can recoup some of our investment instead of the fund losing $580k/year, buying more rate caps, and having a capital call?”

• Positive Feedback:

  • Older posts from 2020 on BiggerPockets show some investors were initially drawn to Ashcroft’s “institutional quality” properties and promises of strong Sun Belt growth.

  • Ashcroft’s investor relations team has been praised for reaching out post-capital call to “address questions,” though this is often seen as damage control rather than genuine transparency.

Risk Considerations

• Financial Risk: Ashcroft’s funds are over-leveraged, with a 1.28 DSCR in Fund 1 and a dire 0.77 in Fund 2, signaling potential default if cash flows don’t improve. Rising rate cap costs (e.g., $736,000 for Elliot Roswell) strain liquidity.

• Reputational Risk: The lawsuit and investor backlash on public forums could deter new capital, especially if Ashcroft’s denials don’t hold up in court. Their podcast-driven brand may lose credibility if negative press mounts.

• Legal Risk: Allegations of securities law violations could lead to SEC investigations, fines, or investor restitution, damaging Ashcroft’s ability to operate.

• Market Risk: Oversupply in Atlanta and rising interest rates threaten property values and refinancing prospects, potentially forcing distressed sales at a loss.

Business Relations and Associations

• Key Figures: Joe Fairless, co-founder and podcast host, and Frank Roessler, co-founder, are the public faces of Ashcroft. Both have personally funded rate caps, though this is likely to protect their own equity stakes.

• Birchstone Residential: Ashcroft’s property management arm, which reduced its fees during paused distributions, suggesting close operational ties.

• Lender Relationships: Ashcroft works with floating-rate lenders, though specific names are undisclosed. A failed refinance attempt in 2023 highlights strained lender trust amid market volatility.

• Investor Base: Primarily accredited investors, many drawn through Fairless’s podcast and marketing events, which some liken to an “MLM show” for their heavy sales pitch.

Legal and Financial Concerns

• Lawsuit: The 2025 lawsuit by accredited investors alleges fraud through inflated projections and inadequate risk disclosures. The discovery phase could reveal damaging internal documents, with settlement or dismissal motions pending.

• Capital Calls: The 19.7% call for Elliot Roswell covers a $736,000 rate cap, renovation overruns, and loan covenants. Fund 2’s $4 million reserve is a temporary buffer, but its 0.77 DSCR suggests more calls may loom.

• Paused Distributions: Initiated in October 2023 due to refinancing issues and extended into 2024, with preferred returns accruing but unpaid, frustrating investors.

• No Bankruptcy Records: No public records indicate bankruptcy, but the low DSCR and capital calls signal financial strain that could escalate without market recovery.

Risk Assessment Table

Expert Opinion

Ashcroft Capital’s troubles are a textbook case of a syndicator riding the low-rate wave of the early 2020s, only to crash when rates spiked and markets turned. Their aggressive underwriting—betting on endless Sun Belt growth—ignored downside risks like oversupply and cost inflation, leaving investors holding the bag. The 19.7% capital call and paused distributions are not just “market challenges”; they’re signs of poor planning and over-leverage. The lawsuit’s allegations of fraud are particularly damning, suggesting Ashcroft may have sold dreams they couldn’t deliver. Their PR-heavy approach, with quick investor calls and podcast polish, reeks of a cover-up to keep the money flowing.

Pros:

• Ashcroft’s focus on institutional-quality properties.
• Sun Belt markets could yield returns if markets stabilize.
• Their investor relations team is responsive
• fee reductions during distress show some accountability.

Cons:

• Over-leveraged funds, a shaky DSCR
• A lawsuit alleging fraud outweigh any upside.
• Their Atlanta bets are floundering, and capital calls punish smaller investors.
• Alleged censorship through narrative control is a red flag for transparency.

Cautionary Advice: Investors, steer clear until Ashcroft proves it can navigate this storm. Demand full financials, stress-test their projections, and don’t fall for the podcast hype. Regulators, it’s time to dig into their disclosures—securities law violations don’t vanish with a charming webinar. This isn’t a “temporary pause”; it’s a warning sign of deeper rot.

Key Citations

• Cybercriminial : https://cybercriminal.com/investigation/ashcroft-capitals

• The Real Deal:https://therealdeal.com/national/2023/11/02/multifamily-firm-ashcroft-pauses-payouts-citing-rate-caps/

• BiggerPockets : https://www.biggerpockets.com/forums/960/topics/1185204-ashcroft-capital-additional-20-capital-call

• Wall Street Oasis: https://www.wallstreetoasis.com/forum/real-estate/another-one-bites-the-dustashcroft-capital