Alan Stalcup, left, and his team are seen on a page of the GVA Property Management website.
GVA Property Management
Sitting in the offices of the Austin American-Statesman in a tailored light blue shirt and similarly colored jacket, the 53-year-old Austin businessman is sounding off on the cabal of unhappy investors and their attorneys he says are engaged in a conspiracy against him.
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Stalcup, once a real estate titan with an empire that made him the 50th-largest landlord in the nation, has for the past three years seen that empire slipping away. He estimates he’s lost $400 million in personal wealth from the falling value of the portfolio. He figures investors in his companies that once held 30,000 apartment units have lost a similar amount.
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“Ninety percent of my net worth was tied up in these deals, so I was intently focused on preserving that, along with our investor equity,” he said.
Stalcup founded GVA Property Management in 2016. It was designed to acquire middle- and low-income apartment complexes on floating rate loans for properties that were underperforming with the promise they could be fixed up, marketed and better managed to return more profit before being sold off at a premium.
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But when the Federal Reserve aggressively increased interest rates in 2022 and 2023, the cost of GVA’s loans ballooned, eating up cash flow at the properties.
Foreclosures, lawsuits and fraud allegations followed. Those, paired with a possible federal investigation, have sapped Stalcup’s business and endangered his reputation.
The Statesman was first to report early this year that he may be under investigation by the U.S. Securities and Exchange Commission. In court documents, an attorney representing one of his former investors referred to an SEC subpoena suggesting Stalcup was being investigated “for securities fraud.”
The SEC doesn’t confirm or deny investigations. Stalcup vehemently denies being under investigation but said he’d welcome such a probe because he has nothing to hide. He derided the Statesman’s reporting on it as “reckless.”
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His company, he said, was always about improving properties once owned by slumlords and making them livable. For several years, he said, that happened, improving the lives of working people.
‘Sour grapes’
Now, he’s taking aim at his detractors, a group of former investors lodging what he calls “sour grapes” lawsuits against him. And he says there are only a few of those.
“We had really two sour grape lawsuits out of 509 investors?” he said. “And over the course of 12 years, we had a great track record for investors and a 42% (internal rate of return).”
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Alan Stalcup estimates he’s lost $400 million in personal wealth in the past three years as interest rates upended his business. He figures investors in his companies that once held 30,000 apartment units have lost a similar amount.
Alan Stalcup Scholarship Program
Since things went bad, though, Stalcup has been sued multiple times in New York and Texas.
But the plaintiff he is most focused on is Bryan Kastleman, who sued Stalcup and GVA in November alleging the company was cooking its books and reclassifying bad debt, concessions and other negative revenue as positive assets, inflating the value of properties.
It also alleges Stalcup was using the business as his “personal piggy bank,” misappropriating $100 million into personal accounts used to fund a lavish lifestyle. That included “payments for jewelry, luxury automobiles, private jet travel, yacht charters, personal lines of credit, and investments in cryptocurrency-related funds,” the suit alleges.
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As the market turned against GVA, Kastleman alleges, Stalcup scrambled to recoup his own investments at the expense of his investors.
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The petition includes internal accounting documents and bank statements purportedly showing the suspect transactions and improper accounting.
It’s all part of a smear campaign, Stalcup said. The internal documents were stolen, he said, then doctored by a disgruntled former employee. What Kastleman and a handful of others call fraud, he argues, was him and his team doing the best they could to hold on to properties.
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“Over the course of those 18 months, we were able to preserve 20,000 of those 30,000 units,” he said.
In fact, many multifamily property owners saw units foreclosed on during the time period. The entire commercial real estate sector has been under stress since rates rose.
Currently, GVA owns about 5,000 apartment units.
Risk fees
One of the accounting methods Kastleman’s and another suit says show GVA “cooked its books” was a risk fee. They contend that unpaid rents, concessions and bad debts were repurposed as assets instead of costs under a risk fee line item — inflating profits or shrinking losses.
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In an interview, Stalcup said they were essentially security deposits.
“A risk fee is a property fee that goes to the property … instead of charging a deposit,” he said.
Other investors also disputed Stalcup’s description. Financial documents provided to the Statesman by Doug Jensen, an investor who sued over their jointly owned Temple property called Apple Creek, showed several properties where the amount attributed to the risk fee was so high as to suggest an impossible tenant turnover.
For a San Antonio property called Barcelo Apartments, $2.3 million was listed as risk fees. According to Jensen’s data, if the risk fee was only $200 per lessee in a 288-unit complex over the 54 months Stalcup owned the property — that total would mean 75% of tenants were turning over every month.
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Data Jensen provided on more than a dozen other properties showed monthly turnover rates jumping from 5% to 71% based on risk fee levels.
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As late as December, other GVA employees were describing the risk fee as something else entirely. An email to a handful of investors from GVA Senior Associate Blake Davis said the risk fee was uncollectible rent sent to collections that the company might recoup.
In an interview, Stalcup said he wasn’t familiar with that description. He declined to comment on the description provided by Davis, saying he hadn’t seen it. Provided with a screenshot of the email, Stalcup offered a different explanation: There is a separately coded risk fee, one for profit and loss sheets and another for accounting that represents overdue rent in collection.
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Stalcup said he’d failed to provide that definition earlier because he hadn’t asked his company’s accounting department about it until seeing the email provided by the Statesman. He said the figures may explain why the collections seem not to correspond to apartment turnover rates.
Other allegations
Overwatch Fund, which invested in GVA purchases of complexes throughout the Carolinas, Oklahoma and Texas, sued Stalcup twice in 2024 over what it alleged were misrepresentations he and the company made in soliciting investments on two deals. The suit alleges Stalcup misled investors about how it sought loans for purchases and by its use of properties owned by one group of investors as collateral for purchases of other properties.
Overwatch lost $7 million when San Antonio-based Solara Apartments were foreclosed on, its lawsuit says, because Solara was used as collateral for another failing property that Overwatch didn’t own. It says it lost millions more on a second deal.
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The lawsuits claimed fraud and misuse of funds. Both were dismissed last year with prejudice, meaning they cannot be refiled. GVA and Stalcup sent out a press release in January, portraying the dismissals as victories, saying it shows they have done nothing wrong and that no money was paid to the named plaintiffs in the settlement.
“Overwatch finally realized that they got duped, right?” Stalcup said of the dismissals.
Pressed for details, he admitted there was a confidential settlement with Overwatch. While no named plaintiff received a monetary payout, potentially “existing properties and existing assets” were taken. GVA and Overwatch owned dozens of properties together and some of those may have changed hands in a separation agreement.
“We had a very, very tight confidential agreement between us,” Stalcup said.
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Neither Overwatch principal Ben Loughry nor the fund’s attorneys responded to requests for comment.
Stalcup says Kastleman was duped just like Overwatch was with the information Stalcup alleges was stolen by a former GVA analyst. He sued the analyst for stealing it, litigation other attorneys have since argued validate the accounting data and financial statements’ provenance.
Stalcup says that after the data was stolen, it was doctored and shared by the former employee, who was vindictive about being fired for cause. For his part, the analyst says he was terminated for attempting to blow the whistle on GVA’s fraudulent behavior.
Taken in by the doctored data, Kastleman filed another lawsuit — but Stalcup says that only came after his family was harassed.
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Harassment
“That lawsuit came after a six-month harassment and intimidation campaign against my family,” Stalcup said.
Kastleman impersonated his wife, Stalcup says, to send letters to neighbors calling him a crook and saying he was under federal investigation.
“I am telling you this just in case you happen to be home when a big convoy of big black suburbans come invading our quiet neighborhood and a parade of government people wearing black jackets with a 3 letter acronym on the back come piling out with guns drawn and barreling towards our wonderful home,” reads a court filing including the alleged letter. S
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A screenshot from a court filing requesting to depose Bryan Kastleman by Alan Stalcup, who says the man was impersonating his wife in letters like the one here.
Travis County courts
Stalcup has filed a petition in Travis County to depose Kastleman over that and other allegations of harassment. He also sued Doug Jensen, another investor in a separate property, over near identical allegations in Comal County.
Stalcup said Kastleman’s attorney attempted to shake him down for millions of dollars, threatening criminal penalties. The attorney, Ephraim Wernick, spent 10 years in the U.S. Justice Department, five of which were spent prosecuting white collar crimes.
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He said he also filed a grievance with the state bar against Wernick.
“He’s reeling,” said Wernick, who denied making the statements attributed to him, calling them baseless. “They appear to be part of a larger PR blitz and smear campaign aimed at the victims of Stalcup’s fraudulent scheming.”
Capital calls
Randy Cohen, another investor, says he lost $800,000 in deals with Stalcup. It wasn’t the first time he lost money on big bets. The live event and sport ticket broker said he once took a bath on $1 million in tickets for the 1996 World Cup that never showed up.
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He isn’t sure if Stalcup is being honest about how things happened.
One thing that bothers him, though, is the calls from GVA asking for cash to shore up financing on the underwater properties as loan rates skyrocketed and monthly debt servicing led to losses.
Capital calls aren’t always a bad sign in real estate deals, sometimes occurring during large capital projects or new property purchases. They are more common during times of market instability.
So the extra $50,000 he said GVA requested from him wasn’t a red flag. It was the subsequent timeline of events that chapped him.
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“And then you know, two weeks, a month later, they’re doing the bankruptcy thing,” Cohen said.
Chesapeake Apartments, an Austin complex once owned by GVA.
Courtesy of Bryan Kastleman
Just weeks after requesting money from him, GVA and Stalcup let the properties he invested in enter foreclosure.
“Not all the capital calls worked,” Stalcup said in an email response to questions. “In some instances, GVA made a decision not to keep chasing good money after bad … You make a capital call, you work in a fluid cycle and you think it can bridge 12 months, and the market keeps changing. At that point, a decision to not chase good after bad money has to be made.”
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In his counterclaims against Stalcup, the former analyst accused of stealing and doctoring documents alleges the 2023 capital calls used misleading statements to get people to pitch in.
In one example, the analyst says GVA was telling investors it was short $150,000 a month when in fact it was short $400,000 a month. Only a small fraction of the money raised made it to debt servicing, he alleges, saying GVA “stole” much of it.
Some investors share that view.
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“Yes, it was too soon. They collapsed too quickly after the capital call,” said Richard Westin, another GVA investor. “It suggests to me that it was a scheme.”
Westin said he invested about $1 million, some of which he got back. Like Cohen, he hasn’t sued. The professional investor says he isn’t convinced Stalcup did anything wrong.
“Stuff happens,” he said. “This stuff happened. Was there evil intent? I don’t know.”
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