Meet Brad Sumrok: The greedy 'Apartment King' owner of 7,700 rental properties - but many Americans who followed his advice now find themselves in trouble

Brad Sumrok, aka the 'Apartment King', is all tan, smiles, and white teeth as he launches into a typical sales pitch.

At one of his glitzy networking events in Dallas, he claims to have 'created over 600 millionaires' by coaching everyone from doctors to warehouse workers in how to invest in commercial real estate.

Never, he adds, has he 'lost anyone's money'.

Sumrok, a 57-year-old salesman from Texas, has been credited with driving the business known as apartment syndication to new heights, creating a generation of landlords who now own tens of thousands of apartment buildings worth billions of dollars.

He and his ilk have been blamed for driving property prices out of reach of first time buyers. But now his bubble may be about to burst.

Brad Sumrok, aka 'The Apartment King', has been credited with driving the business known as apartment syndication to new heights

Sumrok makes his cash through investing in commercial real estate and teaching others how to do likewise. His success helped him buy this Florida mansion for $1.5million in 2015

Sumrok has almost 14,000 followers on Instagram where he flaunts his lavish lifestyle alongside his wife, Jennifer (left)

Amid soaring interest rates, some of his students have overstretched themselves and cannot afford the massive loans they took out to finance their spending sprees.

Millions of dollars of investors' money has already been lost after buildings bought by Sumrok disciples fell into foreclosure.

The Wall Street Journal described one particularly egregious blowup as one of the largest commercial real estate disasters since the 2008 financial crash.

Meanwhile, one syndication expert told DailyMail.com that up to $50billion tied up in such deals is at risk of being lost.

Sumrok, a man who likes to dance on stage to Calvin Harris to the acclaim of adoring fans, is now facing the music for having a thirst for cash as big as his grin.

For his part, he has stressed that he fully informed students of the risks of investment. 

And while there's no suggestion of wrongdoing, Sumrok's ethics have continued to raise eyebrows.  

So, DailyMail.com asks, is he the real deal property guru that he purports to be, or, as one disgruntled student put it, no more than a 'cheesy used-car salesman'? 

The making of 'The Apartment King' 

Sumrok sells the American Dream. He regales followers of his humble beginnings as a middle-of-the-road salesman after securing an MBA from the University of Houston in the late 90s.

He got fired, considered law school, but changed his mind when he went to a real estate conference.

He never looked back. 

In 2002, Sumrok closed his first deal, before 'retiring' from his day job three years later.

In 2013, he started his mentorship program.

Now he teaches wannabe property moguls how to pool their cash and buy up apartment buildings they otherwise could not afford.

To do so, Sumrok tells them to take out loans and raise money from other investors.

They can then turn this into a personal fortune by making cosmetic repairs and raising rents as high as they can.

His Foundations program costs $8,000 for 18 training modules and a few networking events.

Personal mentoring with one of his handpicked coaches costs around $30,000, while one-on-one coaching with the guru himself is said to be up to $100,000.

Sumrok has said his target audience is 'six-figure income earners', budding investors with enough capital to get started on deals and pay for his programs.

The networking events play another crucial function. Regulations mean syndicators can only raise money for deals from accredited investors, unless they can demonstrate they have built a substantial relationship with them beforehand.

Sumrok's gatherings help his followers build those relationships, expanding their pool of potential partners.

As such, they attract many with no real estate experience.

Sumrok specializes in property syndication, where investors pool cash to buy up apartment complexes they otherwise could not afford. They can then turn these into a personal fortune by making cosmetic repairs and raising rents as high as they can.

Sumrok's self-promotion on social media have led some to describe him as nothing more than a 'cheesy used-car salesman'

In the early days, his students would meet in the lobby of his Dallas apartment building before jumping on bus tours of nearby properties.

Afterwards, they would gather for beer and pizza, concocting ways to pool their resources to buy up the homes they had just seen.

Now, they are cult-like experiences.

At one of his 'Rat Race 2 Retirement' events in November 2021, Sumrok invited hundreds of followers to join in an incantation - a call-and-response.

'I am a millionaire investor,' he bellowed, lifting his fist and cinematic music swelled in the background.

The crowd responded in kind.

'Yes, you are,' he said. 'I am financially free.'

I am financially free, the crowd echoed. And so forth.

But syndication requires knowing how to find the right deals and the best way to structure them; how to deal with assets and property management companies.

Sumrok entered the business at the ideal time - an era of rock-bottom interest rates and rising rents.

He was also very good at it.

Two years ago, with the market at its peak, his students' deal volume surged by $1.5billion.

Sumrok himself says he has invested in more than 7,700 units.

For his own leisure, he snapped up a 4,000-sq-ft mansion in Indian Rocks Beach, Florida, for $1.5million. It is now worth around $4million, according to realtors.

He is not ashamed to flaunt his wealth. He fitted his Ferrari with the vanity license plate 'APT KING' and makes online boasts such as: 'Just love collecting rent from 9,716 miles away.'

'Where's my f****** money?' 

But not long after Sumrok delivered his rousing incantation, everything started to change.

In response to soaring inflation, the Federal Reserve began raising interest rates in 2022, driving up monthly loan repayments.

This was particularly bad news for some of his students who had moved onto variable-rate loans to close deals quicker.

Some did so on Sumrok's advice, they told The Wall Street Journal.

Their mentor then told them to keep buying, even as rates went up. 'Now is not the time to wait. Now is the time to get started,' Sumrok said during a July 2022 seminar.

Construction costs also began to rise, while rent growth slowed.

Those investors who had overpaid on properties and underestimated improvement costs were now in big trouble.

One big fish to fall was Jay Gajavelli, 61, who met Sumrok on a bus tour of Dallas apartment buildings in 2022 and belonged to one of his elite clubs, the 'Millionaire Multifamily Mastermind'.

The 61-year-old from India had managed to leave behind his old life as an IT worker by buying up more than 7,000 Sunbelt apartment units worth more than $500million through his company Applesway Group.

Sumrok has faced criticism for only 'selling the story of success' to his students and failing to warn them about risky loans and market headwinds. One student said he had a vested interest in keeping the deals rolling in because he charged fees on them

In the early days, Sumrok's students would meet in the lobby of his Dallas apartment building (pictured) before jumping on bus tours of nearby properties they wanted to buy

Sumrok drives a Ferrari with the vanity license plate 'APT KING'

He did so using funds from dozens of small investors who wanted to get rich quick, pitching them double-your-money returns.

When interest rates and inflation started to spike, Applesway couldn't raise rents fast enough to keep pace.

In April last year, the firm lost more than 3,000 apartments at four rental complexes taken in foreclosure. Investors lost millions. More than a hundred have sued.

One, who gave his name only as Chris, summed up the mood. 'Excuse my French, but where's my f****** money?' he told The Real Deal outlet last year.

A spokesman for Sumrok said Gajavelli 'disregarded much of Brad's approach' and clarified his comment that he had 'never lost anyone's money' by saying this only referred to his personal deals.

Meanwhile, Mark Kenney, another former Sumrok student, lost a West Texas apartment building in September.

Anton Mattli, chief executive of Peak Financing, a Dallas firm that has arranged loans for syndicators, told DailyMail.com that up to $50billion tied up in syndicated property deals is at risk of default.

'That is 2,000 plus properties that are at risk of foreclosure,' he added.

Sumrok himself has suffered - even if his social media output won't let you know it.

Last year, he broke the news to partners on a 1,000-unit, $207million Dallas portfolio that he needed more money to pay off the debts.

Around the same time, he appeared to be viewing Mount Everest from a private helicopter in between sipping champagne, according to his Instagram posts.

Rich no matter what 

But it is not he who will fall the hardest. On salvageable deals, partners will first pay back the lender, then themselves with whatever equity remains.

It is the small investors - the real estate novices drawn into Sumrok's programs - who are the most likely to end up with nothing.

Sean Tate, a Dallas-based real-estate attorney who worked with dozens of Sumrok students to structure syndication deals, said he knows plenty of these.

But he also knows plenty of winners, too, he told DailyMail.com.

These people, however, tended to already have had real estate experience when they came to Sumrok's events, as well as the capital to absorb a few failed deals, Tate said.

Many have stuck by him.

Musician Neander Lima, who claims to own more than 750 apartment units, told The Wall Street Journal that his net worth grew from less than $1million to around $8.5million since joining Sumrok's program.

Others are more circumspect.

Charles LeMaire, a retired engineer and Sumrok student, told the outlet that even though he and his family members had made more than $4million in investing in apartment rentals, Sumrok should have warned his pupils about variable rate loans.

LeMaire said Sumrok had an incentive to keep students borrowing. His business model relies on students buying buildings to generate fees and membership dues.

Mattli points out that there are worse offenders than Sumrok, with others trying to replicate his success in syndication coaching without having any real experience of it themselves.

'I would say Brad is actually one of the better ones because he has actually done these transactions himself,' the finance executive said.

In a written statement to DailyMail.com, Sumrok said he was 'proud of my work helping my students become financially independent'.

'I teach that success is never guaranteed,' he added. 'I teach students about all financing options and present the advantages and disadvantages of each...

'I continue to firmly believe now is a good time to buy attractively priced assets in good markets.'

If Sumrok is feeling the pinch, he is not showing it. At around the same time he asked partners in a Dallas syndicate for more capital to pay off mounting debts, he posted this picture of himself next to a private helicopter at Mount Everest

A spokesman added there was no evidence to suggest that syndicators are doing worse than the rest of the market.

He also said that Sumrok was only a teacher and 'cannot ensure' his students make they correct choices. 

Tate, however, believes he must shoulder some of the blame.

The attorney said bringing together so many inexperienced investors and was 'a recipe for disaster for a lot of honest, hard-working people'.

'Sumrok was a huge catalyst for all these bad deals coming together,' he added.

'He drew in a lot of people who bought his vision of the American Dream and then left them to their own devices.

'But I do not think Sumrok is primarily responsible for the outcomes of the deals that some members of his group engaged in. 

'Deals went south primarily because of market conditions, underprepared syndicators, inexperienced operators, and an over-eager lending market.

'It's just about greed and wanting quick cash. That allure and temptation took over. Their noses were just sniffing green.'

As for Sumrok, he is already sniffing the next opportunity.

'Get ready for distressed deals galore!' read a post on his Instagram in May last year.

In a video alongside it, he told his almost 14,000 followers: 'There's going to be a lot of distressed deals coming down the pipeline.

'A lot of people got into variable rate loans of 3 per cent, and now they're 7 per cent.

'They didn't budget for the rise in their debt payments. They didn't budget for these short term loans becoming due and not being able to refinance.

'Everybody wants to do a cash out refinance. So there's going to be opportunity for those that are ready, prepared, and have their teams built, to buy some of these distressed properties.'

Tate believes little will change for the 'Apartment King'. 'Brad Sumrok is going to be rich no matter what,' he said.