The Skyloft investors say they don’t know where the money went, or who actually owns the building today, according to court filings in California, Texas and Delaware and interviews with a half-dozen investors and lawyers.

Real estate private placements such as the Skyloft deal are also popular because they offer people a way to defer taxes on property sales. They involve the sale of stocks, real estate or other assets, but the small offerings, which promise good returns, can be risky because they lack transparency. Such deals, known as private placements, are often pitched by brokers to chosen groups of small investors. The investors are seeking to recoup much of the $75 million they put in. At least half of them are now suing the property management firm that promoted the deal, as well as a hedge fund that provided additional financing and later took control of the building before selling it off. Parziale are among dozens of small investors who are suing, saying they were taken for a ride by a group of professional real estate investors who raised tens of millions of dollars from people like them to finance the purchase of the student dorm.Īccording to the lawsuits and investors, more than 200 lawyers, accountants, doctors, retirees and others each invested $100,000 to $500,000 in the deal in 2019. James Parziale put money into the same deal because he was impressed by the shiny new high-rise with its sun-drenched rooftop pool and door-to-door garbage collection service.

Adelaida Martinez was attracted by the opportunity to invest in Skyloft Austin, an upscale student housing complex near her alma mater, the University of Texas at Austin, and collect a monthly dividend check.

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