Timeline of S2 Capital’s Financial Unraveling

Scott Everett hadn’t yet closed his first fund when he said four words that would come to haunt him.

“Fixed-rate is for suckers,” he said, parroting the words of a Starwood Capital director on Chris Powers’ podcast, which aired on April 5, 2022.

At the time, Everett was flying high. He wasn’t yet 35, but he’d built a multifamily empire, acquiring 40,000 apartment units worth $4.5 billion and delivering blockbuster returns.

Everett launched S2 Capital at 23 with a compelling back story: the community college dropout and teenage father was waiting tables and using food stamps when he decided to try his hand at real estate. He got into the industry as a house flipper before becoming a value-add multifamily investor and founding S2.

Interest rates were low, everyone was moving to the Sun Belt, and S2 took off. It was the country’s 14th-fastest growing private company in 2016, according to Inc. Everett was named an EY Entrepreneur of the Year in 2018.

S2 kept telling its success story long after rising interest rates and unfavorable fundamentals stopped value-add peers in their tracks. Everett got creative in his effort to hang on through the seemingly interminable economic cycle, as he launched the largest private REIT to save his distressed deals.

Equity wipeouts for S2’s REIT and $400 million first fund have turned “fixed-rate is for suckers” into a jeering refrain for angry investors and #RETwit users who’ve watched the whole thing unfold.

Here’s a timeline of how we got here:

2012:

Everett, 23, co-founds S2 Capital with Harold “Skip” Bird. They launch the company with the intention of purchasing old or distressed apartment buildings, renovating them, raising rents and selling them at a profit. According to local news reports, “a wealthy entrepreneur” Everett reached via cold call provided the equity for his first deal, which he did in 2012.

August 2016:

The accolades start coming in. The annual Inc 5000 list names S2 Capital the fastest-growing private real estate company in the country and the fastest-growing company in Texas. S2 says in a release that it saw a 9,646 percent growth in sales over the previous three years.

2017:

Timeline of S2 Capital’s fall from grace

S2 surpasses $100 million in revenue for 2017. The company, which has 250 employees at this point, reaches $1.6 billion in deal volume. So far, the deals are in Texas and Florida.

April 2020:

At the start of the pandemic, Everett started offering small business loans out of his own pocket after learning that area businesses were struggling to get loans through the Paycheck Protection Program, the Dallas Business Journal reported. He offers loans up to $200,000 per company and says he’ll loan between $2 and $3 million.

2021:

S2 acquired 10,000 apartment units in 2021, surpassing Blackstone as the most active multifamily buyer in Dallas-Fort Worth over the prior five years, according to data from Real Capital Analytics.

“You have to be bullish about a market with record in-migration, a business-friendly climate, household income growth, manageable inventory levels, and strong housing demand. We are very excited about the future of Dallas,” Everett told D Magazine.

September 2022:

S2 comes out swinging with its first fund. Aiming for a $250 million raise, S2’s Multifamily Value-Add Fund I closes at $400 million a few months after it launched. The raise marked the firm’s transition to third-party fundraising; Everett said he wanted to bring investors in other asset classes into multifamily.

Summer 2024:

Though S2 seems solid compared to floundering syndicator peers, the firm and Everett become favorite targets of anonymous #RETwit troll “LPWhisperer.” The account’s brief but memorable reign of terror, ramped up in June before getting suspended from the platform by September.

In its own words, the account claimed to be “protecting LPs from GP grifters offering nonsense investment scams.” LPWhisperer accused Everett of failing to pay LPs and vendors and using fees to fund his lavish lifestyle.

“This is where your money is going right now,” LPWhisperer taunted, captioning screen grabs of Brittany Everett’s account in which she showcased opulent vacations and sported designer duds from Dolce & Gabbana and Bottega Veneta.

Fort Capital’s Chris Powers, another LPWhisperer target, tries to get the FBI involved and delivers a cease and desist letter to Jacob Kostecki, the man believed to be behind the account. Everett sues Kostecki for defamation. In May 2025, a judge issued a default judgement against Kostecki and awarded Everett $2,000 in damages.

November 2024:

Everett pooled nearly 10,000 apartment units across a slew of joint ventures and folded them into the largest private REIT in what was billed as a possible blueprint for multifamily syndicator survival. To do so, S2 convinces investors to convert their equity into REIT shares.

The REIT mixes distressed deals with well-performing ones in an effort to allow S2 to access debt with better terms. It seems to work: S2 folds $1.4 billion in senior debt into the REIT. It refinances the floating-rate portion of that debt into a $500 million Fannie Mae credit facility at a five-year, fixed-rate term.

December 2024:

S2 capitalizes on its resilience vis-à-vis struggling syndicators to act as a white knight for Alan Stalcup’s GVA. S2 takes over a 1,700-unit GVA portfolio, coming in as a general partner in a $60 million recapitalization of the properties.

June 2025:

The first hint of trouble for S2 comes in the form of a foreclosure. S2 defaults on a $36 million loan from CBRE for Preslee Apartments at 2504 Ivy Brook Court in Arlington and kicks back the keys to the property at a foreclosure auction in July.

July 2025:

Whispers of distress in S2’s portfolio are drowned out by the news that the firm had closed its second multifamily fund. Launched in March 2023, the fund raised $373 million, Private Equity Real Estate reported. It fell short of its $600 million goal.

At the time the fund closed, 60 percent of the capital raised had been invested in 14 properties across the Sun Belt.

August 2025:

Taking down Kostecki isn’t the last time Everett and Powers collaborate. S2 buys Powers’ Fort Worth-based value-add industrial firm Fort Capital. At the time of the merger, Fort had an 11 million-square-foot portfolio and a pipeline of $350 million in targeted acquisitions, S2 said.

January 2026:

At the start of the year, the vehicle S2 built for its struggling deals was running out of gas. The REIT needed a $70 million cash infusion, Everett told investors, according to a report from The Promote. Without the funds, the firm would have to sell off properties at an estimated 5.5 percent cap rate, meaning investors would lose between 60 percent and 75 percent of their equity.

May 6, 2026:

Everett raised about half of what he asked for. The Promote broke the news that the $30 million raised would provide a “short runway to complete an orderly wind down of the REIT,” according to Trinity Investors, the feeder fund that helped launch the REIT.

Trinity warned, “equity investors should expect a full loss of capital.” According to the fund, S2 would shift focus to “maximizing value for mezzanine investors,” per The Promote.

Everett called the update “old news” in an email to The Real Deal: “We notified LPs of this in November,” he said.

Late May 2026

The cascade of foreclosures began with a $79 million loan tied to a property in the Dallas suburb of Garland. S2 faces foreclosure on The Republic Apartments, at 241 East I-30 after allegedly defaulting on the loan from Benefit Street Partners. Everett told TRD in an email that the property is under contract to sell in the next 30 days.

At the same time, a big chunk of S2’s CMBS debt gets flagged for special servicing. The underperforming debt totals $560 million, per the Dallas Morning News, and includes the $92.2 million loan tied to The Kace in Grand Prairie and the $84 million loan tied to The Weston Medical Center Apartments in Houston. According to Morningstar Credit, each property failed to maintain net cashflow at the level for which the loans were underwritten.

July 1, 2026:

In a letter dated July 1, Everett announces that S2 is dissolving its $400 million first fund, which closed in 2022. The letter explains investors will receive “no return of capital.”

Everett blamed the “exceptionally challenging environment” for the fund’s troubles, citing the rising cost of debt, cap rate growth and record supply. The fund’s 20-property portfolio saw an average 16 percent increase in expenses and 50 percent increase in the cost of interest while rents dropped an average of 24 percent across the portfolio, Everett detailed in the letter.

He also outlined a plan to save the fund’s viable properties: S2 will purchase the debt on these assets and then sell the properties into a new investment vehicle after restructuring the debt. The company is also seeking to raise $100 million for this new investment vehicle for the good assets. The bad assets will go into foreclosure or be sold at a discount.

July 4, 2026:

Everett’s wife Brittany posts photos of the couple vacationing over the Fourth of July in either Cali or Cabo, as denoted by the caption “Cali X Cabo.” They’re in swimsuits lounging on the beach wearing hats that say “USA 250 years of freedom.” In another photo, Brittany is behind the wheel of a six-seater golf cart.

X user Kyle Mitchell posts the photos: “Scott Evertt absolutely nuked $400 million of investor capital and his wife is just flexing on Instagram a trip they are at in Cabo. Those GP fees must be pretty nice.”

The post makes the rounds, spurring discourse. Everett brushes off the criticism. When a user posted a screenshot of an old Everett tweet, he responded, “It’s the Fourth of July. Go touch some grass with friends.”

July 6, 2026:

Five days after informing investors about S2’s first fund, S2 shares news of its latest purchase: a 31-building industrial park in Fort Worth. It plans to rebrand the 590,000-square-foot property as Panther City Industrial Park.

Everett celebrated the buy with a July 8 post on LinkedIn: “We’re excited to get to work!” In a stark contrast to the tone of discourse on X, the nine comments are all positive.