Austin real estate executive Alan Stalcup is confronting a series of lawsuits and fraud allegations from former investors, challenging the reputation of a man who once controlled one of the nation's largest apartment portfolios. At the center of the dispute are claims of financial misconduct and misleading accounting practices at his firm, GVA Property Management, following a period of intense market pressure.
Stalcup, who founded GVA in 2016, built an empire of 30,000 apartment units by acquiring and renovating properties. However, a sharp rise in interest rates beginning in 2022 led to ballooning loan costs, foreclosures, and a cascade of legal battles that have shrunk his holdings to approximately 5,000 units and erased an estimated $400 million of his personal wealth.
Key Takeaways
- Real estate executive Alan Stalcup is accused of fraud and financial mismanagement by former investors in his company, GVA Property Management.
- Lawsuits allege GVA used questionable accounting, including a "risk fee," to inflate property values and misappropriate funds.
- Stalcup denies all allegations, attributing the lawsuits to a few disgruntled investors and a smear campaign by a former employee.
- The company's portfolio has shrunk from 30,000 to 5,000 apartment units amid foreclosures driven by rising interest rates.
The Collapse of a Real Estate Empire
GVA Property Management's business model was straightforward: purchase underperforming apartment complexes with floating-rate loans, renovate them, and increase their profitability. For years, this strategy delivered significant returns for Stalcup and his 509 investors, reportedly achieving a 42% internal rate of return.
The strategy's reliance on variable-rate debt became a critical vulnerability when the Federal Reserve initiated aggressive interest rate hikes. The increased cost of borrowing consumed cash flow, pushing many properties toward financial distress and foreclosure.
Stalcup maintains that his team worked tirelessly to navigate the turbulent market. "Over the course of those 18 months, we were able to preserve 20,000 of those 30,000 units," he stated, noting that the entire commercial real estate sector faced similar pressures. However, some investors argue the company's problems run deeper than market dynamics.
Allegations of Financial Misconduct
A lawsuit filed by investor Bryan Kastleman in November makes serious allegations against Stalcup and GVA. The suit claims the company manipulated its financial records to conceal losses and that Stalcup misappropriated approximately $100 million for personal use.
"Payments for jewelry, luxury automobiles, private jet travel, yacht charters, personal lines of credit, and investments in cryptocurrency-related funds," the lawsuit alleges were funded by the business.
Stalcup has forcefully denied these claims, describing them as part of a smear campaign orchestrated by a disgruntled former employee who he says stole and doctored internal documents. He has also filed a petition to depose Kastleman over what he describes as a "six-month harassment and intimidation campaign against my family."
The Controversial 'Risk Fee'
A key point of contention is an accounting item labeled a "risk fee." Plaintiffs in multiple lawsuits contend this was used to reclassify bad debt and tenant concessions as assets, thereby artificially inflating property values.
Stalcup has offered evolving explanations for the fee. He initially described it as a type of security deposit. Later, after being presented with an internal email describing it differently, he explained that there were two separately coded risk fees: one for profit and loss statements and another representing overdue rent sent to collections.
A Question of Numbers
One investor, Doug Jensen, analyzed financial documents for a San Antonio property called Barcelo Apartments. He found $2.3 million attributed to risk fees. According to his calculations, this sum would imply a tenant turnover rate of 75% every month for the 54 months GVA owned the 288-unit complex—a figure he suggests is impossible.
A Pattern of Lawsuits and Settlements
The Kastleman suit is not an isolated incident. Overwatch Fund, another investment group, filed two lawsuits against Stalcup in 2024, alleging he misrepresented loan terms and improperly used one property as collateral for another.
According to one of its lawsuits, Overwatch lost $7 million when the Solara Apartments in San Antonio were foreclosed on. The suit claimed this was because the property had been used as collateral for a separate, failing property that Overwatch did not own.
Both of the Overwatch lawsuits were dismissed with prejudice, meaning they cannot be refiled. GVA publicly framed the dismissals as a victory. However, when pressed, Stalcup acknowledged a confidential settlement was reached. While no direct monetary payout was made to the named plaintiffs, he confirmed that "existing properties and existing assets" may have changed hands as part of a separation agreement.
A Potential Federal Probe
Court documents filed by an attorney for a former investor reference a subpoena from the U.S. Securities and Exchange Commission (SEC), suggesting a possible investigation into Stalcup for securities fraud. The SEC does not confirm or deny ongoing investigations. Stalcup has vehemently denied being under investigation but said he would welcome one, stating he has nothing to hide.
Questions Over Late-Stage 'Capital Calls'
As financial pressures mounted in 2023, GVA issued "capital calls," requesting additional funds from investors to help service the rising debt on their properties. This practice is not uncommon in real estate, but the timing has raised suspicion among some investors.
Randy Cohen, an investor who lost approximately $800,000, contributed an extra $50,000 during a capital call. He was troubled when the properties he invested in entered foreclosure just weeks later. "And then you know, two weeks, a month later, they’re doing the bankruptcy thing," Cohen said.
Richard Westin, another investor, shared this sentiment. "Yes, it was too soon. They collapsed too quickly after the capital call," he observed. "It suggests to me that it was a scheme."
Stalcup defended the decisions, explaining that market conditions were changing rapidly. "You make a capital call, you work in a fluid cycle and you think it can bridge 12 months, and the market keeps changing," he stated. "At that point, a decision to not chase good after bad money has to be made."
While some investors like Westin remain undecided on whether there was malicious intent, the rapid succession of capital calls followed by foreclosures has left many questioning the company's final financial maneuvers as its real estate empire crumbled.
