Real-estate investment firm fights to stay afloat [Pheonix Arizona]
Last week, Phoenix-based real-estate investment firm Right Place Properties spent investors’ money to purchase multifamily housing units, promising a healthy return on their cash.
Then on Monday, the company and its designated broker, Red Door Commercial, shut down their Web sites, disconnected the phones, laid off the bulk of their employees and told investors and others that their money was all but gone.
Company officials say they were blindsided by rapid property-value declines in October and a lending-capital freeze that made it impossible to continue executing their business plan of buying run-down apartment buildings, renovating them and selling the units as condominiums.
“It’s true that through last week we were continuing to close escrows,” Right Place principal owner Earl Ricker said Thursday. “It really didn’t sink in until the weekend that continuing operations would put our ability to manage our existing properties in jeopardy.”