MULTIFAMILY DIVE: How did GVA come to oversee 30,000 multifamily units nationwide at its peak?

ALAN STALCUP: I founded GVA in 2015 with a simple strategy in mind: acquire underperforming multifamily properties on floating-rate loans and then turn them around. We renovated buildings, tightened operations, increased tenants’ quality of life, and converted the added value into higher revenue and resale profit. Investors who believed in this strategy provided the capital needed to make it possible.

It worked well. GVA grew to manage and own interests in more than 30,000 apartment units across multiple states, as you said, and partnered with 509 accredited investors. On average we provided them with an internal rate of return around 42%.

GVA currently manages about 5,000 units. What prompted such a substantial reduction?

It’s the same story that multifamily operators all around the country will tell you. The Federal Reserve raised the interest rate target from near zero to 5.25-5.50% between March of 2022 and July of 2023—the most aggressive right-hiking cycle in about 40 years. The whole commercial real estate sector felt the shock. But for multifamily operators like ourselves who had assumed large floating-rate loans as a core part of the business model, debt service became unaffordable almost overnight.

What did you do to protect your investors when the crisis began to materialize?

My team and I spent nearly two years preserving as many properties and as much investor equity as possible. We acted as quickly as we could, pausing distributions across more than 40 properties by Q2 of 2023 to conserve liquidity and stabilize operations. From then on we worked asset by asset to reduce losses in an orderly, well-documented, and compliant manner.

In the end we managed to save about 25,000 of 30,000 units before narrowing down to the focussed portfolio of 5,000 units we manage today. But doing so meant making tough decisions, cutting losses where they couldn’t be recovered and stopping the flow of good money after bad. 

Still we maintained transparency with our investors as our highest priority. We sent out updates to ensure they understood what we were doing and why. We offered free access to financial information through our investor portal, including monthly reporting and general ledgers for every asset. At no point did GVA stop acting first and foremost in the interest of our investors.

You’ve nonetheless been on the receiving end of lawsuits from former investors. Why is that?

Needless to say, many of our investors didn’t see the returns that they or we had expected. Out of 509 in total—the rest of which parted amicably or remain with us today—a very small number chose to take legal action against GVA. Most of their claims have already been dismissed, and only one investor currently remains engaged in active litigation. 

These investors may have been seeking legitimate investigation, as is their right. But some have committed what we consider to be breaches of good faith in the legal proceedings and have gone on to make repeated public accusations of fraud and misconduct which, so far as they remain unproven and unsubstantiated, amount to simple defamation. The reputational and financial damages have been considerable, as you’d imagine.

Where do you think the allegations of fraud originated?

I think fraud can be a knee-jerk accusation when people are upset about an investment that didn’t yield the expected returns. But to be more specific, many of the allegations began with what we believe to be a doctored document disseminated by former GVA employee Zac Richards. The document purported to indicate that I made a fraudulent transfer of $100 million dollars into a trust—which is categorically flase—prompting two former investors to file suits.

The first of these was Overwatch Fund. Overwatch proceeded to conduct a thorough investigation into the claim, only for principal Ben Loughry to deliver a notarized affidavit confirming they found no evidence whatsoever to support it. Both of the lawsuits filed by Overwatch were dismissed with prejudice by the Travis County District Court. 

The other plaintiff—former investor Bryan Kasleman—filed suits this past November in the same vein as Overwatch’s initial allegations, and we expect them to have the same outcome as well.

What led you to take your own legal action against Kastleman and his counsel?

GVA’s grievance against Kastleman’s attorney, Ephraim Wernick, asserts that Wernick demanded millions of dollars on Kastleman’s behalf and threatened criminal charges if the business dispute was not settled on their terms. Wernick is now under active investigation by the State Bar of Texas.

We have also filed a countersuit against Kastleman himself asserting that he has made repeated public statements to damage my reputation and that of GVA, far beyond the confines of the courtroom where such issues ought to be resolved through lawful process. We additionally believe that Kastleman has been making targeted phone calls to our stakeholders to sow mistrust and uncertainty.

Why have major outlets reported that you are under investigation by the SEC?

Texas attorney Joshua Romero, representing two former investors who sought pre-suit discovery in 2024, alleged to the Austin-American Statesman that GVA and myself were under investigation for “securities fraud” by the SEC. The investors never filed a suit, but of course the allegation remained.

While I have no reason to think I’m under investigation, the simple truth is that the SEC never discloses who they investigate or for what reason—as the Statesman noted. Romero could not have known that information even if it were true. GVA filed a grievance alleging wrongful disclosure on the part of Romero, who remains under active investigation by the State Bar of Texas.

You have reported acts of harassment against your family. Can you elaborate on that?

Yes—it grieves us that these attacks have moved beyond the courtroom and even the public forum into the personal lives of innocent family members and neighbors. The Austin Police Department is actively investigating the illegal delivery of forged letters to homes in our neighborhood, impersonating my wife and making baseless claims that have brought distress and confusion to our community.

We suspect that Bryan Kastleman is likely involved, and we have submitted court filings to depose and restrain him while authorities investigate. 

What do you think the industry should learn from GVA’s story?

Reality is complex. That means it is often easier to take a headline at face value than it is to evaluate the facts of the matter. I hope I’ve made those facts more clear and accessible in this case. Still more than that I hope our story serves as a warning about the danger of unsubstantiated accusations, and I trust it will demonstrate that the truth prevails at the end of the day.