Fraud with our Birmingham turnkey property

Fraud with our Birmingham turnkey property

Investor · Houston, TX · Member since 2014 · 128 posts · 87 votes

In March 2015, we worked through Maverick Investor Group to purchase a property in Birmingham, Alabama. The Seller was Birmingham Income Properties - owned by Brad Lewis and Bryan Conwill. Property Management would be done by their other company, Arbor Trace Real Estate.

There were many difficulties during the rehab and purchase process. Most importantly, about two months after closing on the purchase, we discovered there was not a tenant in the property.

According to our contract, the house would be fully rehabbed with new plumbing, electrical and appliances and have a tenant in place before closing. We were also promised a paying tenant in the house at closing; a specific rental amount; a specific cap rate; and told that if the rental rate was not met, the sales price for the house would be lowered to maintain the cap rate. All of these stipulations were promised jointly by Mr. Lewis and Maverick during a webinar in March.

Problems started during the rehab process. Timelines kept getting missed. The Seller claimed work was done that wasn’t and frequently lied about issues. Fortunately we hired an independent inspector who helped us hold them accountable for doing the promised work. The inspector pointed out an old water heater that the Seller claimed was new, among many other issues. We often discussed these issues with Maverick; their response was to praise our due diligence and repeat the promises we had been given.

The Seller told us a tenant was lined up, but at a lower rental rate than promised. We mentioned up the rent guarantee. The Seller refused to lower the sales price, and eventually told us the tenant had agreed to the original rent amount. Shortly before closing the Seller sent us a copy of a signed lease. We closed on the purchase in July, and hired Arbor Trace for property management.

Almost two months passed and we did not receive any rent or owner’s statements. We contacted Arbor Trace to ask about the situation; we discovered the companies were collapsing in dramatic fashion. One staff member told us the house we had bought was not occupied. We called the electric company and verified that there was no power at the house. The lease we had been shown in order to get us to close at the agreed price was a fraudulent lease!

At that point, we reached out to another PM group in Birmingham. They helped us secure the house (which was empty) and get the lawn cut (there was a city citation on the door about the overgrown lawn).

We are not convinced that this drama is over yet. But so far, we have:

  • Bought a house that will cash flow for $200 less a month than promised
  • Dealt with a fraudulent lease
  • Had to find a new PM company
  • Had to spend at least $1000 to get the house rent ready
  • Paid a $500 bill to the electrical company to cover an unpaid bill
  • Been sent one check by the Seller to cover some costs – the check bounced (twice)
  • Received no substantive support from Maverick – they completely failed on their due diligence

Knowing how BP folks feel about turnkey properties in general, I want to say that we are not against the approach – we are in the process of closing two other turnkey properties with two different companies.

Our warning – stay away from the groups and people mentioned here and always do your due diligence!

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Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
10y
Thanks for sharing. My biggest issue with TK is that it never made sense to me. Your goals are not aligned. I always figured that if a TK provider could deliver what they claimed to offer consistently and over a long period of time... they would either keep them or have huge corporate buyers gobbling up as many properties as they could deliver. The fact that they constantly have to hunt for small time buyers is one of many red flags for me. I don't understand why somebody would do all of the legwork to secure properties below market, fund and manage a rehab, lease up and then hand over a great cash flowing property to a stranger while retaining the management headache. That is all the heaving lifting. It is like running the first 26 miles of a marathon then handing the bib off to somebody else that gets to sprint across the finish line to kiss your wife and hug your kids. None of it makes sense unless their one time rip and ongoing management fees are a better deal than the true monthly cash flow. When I go into any type of business arrangement or partnership I try to make sure our business interests and goals are 100% aligned. With TK investing, it simply can't be. More repairs and management fees from turnover equals more money for the TK provider and less money for the investor. Every extra penny they spend over engineering a rehab to avoid future maintenance issues is coming off their bottom line. Then they have no skin in the game if the property underperforms. It's like a perfect recipe to get screwed over. If you want relatively hassle free out of state investing, a commercial syndication deal makes much more sense to me.
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  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y

    @Alex Craig

    Quality answer, makes sense to me.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y
    Originally posted by @Gautam Venkatesan:
    Originally posted by @Ben Leybovich:

    @James Wise care to respond to Ben's statement? I know you market what Ben refers to as PIGS so how do you manage your client expectations with respect to quality of tenant base, CapEx, economic losses??

     I was asked this question when the PIG thread came out. See my opinion on the topic in Ben's PIG thread

  • San Francisco, CA · Member since 2014 · 345 posts · 281 votes
    10y

    @Ann Howell

    How much money were you going to put into this deal and how much did you think you were going to make annually?

  • Investor · Alsip, IL · Member since 2013 · 34 posts · 12 votes
    10y

    This sounds like a nightmare. As I read on and on, it was like reading a best selling thriller: my stomach was in my throat. But as a new investor, I really appreciate when people share horror stories and are completely transparent about success and failure. Believe it or not, it is very encouraging. This wasn't a complete fail, but the reality is the although no one WANTS to, we do sometimes loose money in REI.

    Thanks for sharing and I hope all goes well. Im just curious...are you new to turnkey? Or did you just come across a new company the did you wrong?

  • Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
    10y

    This has nothing to do with the provider. The model itself is flawed to hell.

    That is correct. Anyone purchasing property for 15 to 30k and expecting $600-$700 rents to flow like manna from heaven is in for a rude awakening. There have been (and continue to be) several outfits operating in Columbus operating exactly like the one described by OP. For a while, we managed property for one of them (before we figured out exactly what they were doing). The clients they handed off to us (after the property sold) have universally and without fail lost money. They have all either sold their property or call us monthly with sob stories and accusations as to why they are not making money. All we can do is gently explain the financials.

    Do not purchase property (or anything else) from slick-talking investment groups with webinars and cruises and hyped-up marketing and literature. Do not purchase property that comes with any sort of "guarantee". These companies come and go like thieves in the night, and you'll be left holding an empty shell of a property that you paid 2x market price for.

  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    10y

    FYI everyone.  Hang on to that bad check.  It's your ticket to a little bit of redemption from the bad actors. Bad checks can be much easier to prosecute and potentially more lucrative. And they can also fall under criminal penalties.  Eliot Ness got the bad guys.  You can too.  

    The 1031 Investor5137 Reviews
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    10y

    Hello everyone,

    Loving the heat on this thread.

    Just chiming in quickly to throw my name out there and wish everyone a successful week.

    Keep the dream alive :)

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Peter Lohmann:

    This has nothing to do with the provider. The model itself is flawed to hell.

    That is correct. Anyone purchasing property for 15 to 30k and expecting $600-$700 rents to flow like manna from heaven is in for a rude awakening. There have been (and continue to be) several outfits operating in Columbus operating exactly like the one described by OP. For a while, we managed property for one of them (before we figured out exactly what they were doing). The clients they handed off to us (after the property sold) have universally and without fail lost money. They have all either sold their property or call us monthly with sob stories and accusations as to why they are not making money. All we can do is gently explain the financials.

    Do not purchase property (or anything else) from slick-talking investment groups with webinars and cruises and hyped-up marketing and literature. Do not purchase property that comes with any sort of "guarantee". These companies come and go like thieves in the night, and you'll be left holding an empty shell of a property that you paid 2x market price for.

    My own experience is that the tenant pool paying $600 rents is flawed, doesn't matter what you pay for the property.  A $600-700 housing payment in many, many parts of the country and for many households is a clear sign of poverty level income and/or or lack of income that requires government assistance.  Poverty is a not an indicator of the personal qualities of the tenant.  It's an indicator of the stability of their finances.  Tenant finances impact more than their ability to pay rent. If they can't pay for utilities or have no cash to deal with even the smallest cleanliness or upkeep requirements, or move their non operational vehicle from the yard, that's going to directly affect your property. There are of course exceptions to this, and many people live in rural areas where housing and rents are cheaper and not an indication of poverty.  

    The TK model is attracting buyers that would not otherwise dare to buy a $50-75K house in Dayton or Detroit or Indianapolis.  It's not just the acquisition and rehab of the properties.  It's the level of removal from the tenant pool.  If you never go and drive the neighborhood, your TK provider does the rehab, and you hire a PM, you never have to deal with your product or your customer.  TK has taken this to a whole new level in the low income rentals.

  • Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    10y

    @Ben Leybovich

    There is a reason in most other investment or gambling markets there are very clear rules about what you can and can't sell and to whom. There are actions bought every day about that. The reason is because many people don't know better and considering the real lack of reliable information, unlike in say the equity markets, it is a very hard thing to "know" with any certainty as you may know because you do teach people in your courses. 

    Much like in other markets I think most people likely know one or two people who made money in the asset class and thus assume they can too.    

    I am not saying I know the answer to this debate about "PIGS" I do not know and this debate has been had elsewhere to death but clearly when you combine a tough asset class with bad operators who also seem to have done things they should not have there is a recipe for disaster. 

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Peter Lohmann:

    This has nothing to do with the provider. The model itself is flawed to hell.

    That is correct. Anyone purchasing property for 15 to 30k and expecting $600-$700 rents to flow like manna from heaven is in for a rude awakening. There have been (and continue to be) several outfits operating in Columbus operating exactly like the one described by OP. For a while, we managed property for one of them (before we figured out exactly what they were doing). The clients they handed off to us (after the property sold) have universally and without fail lost money. They have all either sold their property or call us monthly with sob stories and accusations as to why they are not making money. All we can do is gently explain the financials.

    Do not purchase property (or anything else) from slick-talking investment groups with webinars and cruises and hyped-up marketing and literature. Do not purchase property that comes with any sort of "guarantee". These companies come and go like thieves in the night, and you'll be left holding an empty shell of a property that you paid 2x market price for.

    My own experience is that the tenant pool paying $600 rents is flawed, doesn't matter what you pay for the property.  A $600-700 housing payment in many, many parts of the country and for many households is a clear sign of poverty level income and/or or lack of income that requires government assistance.  Poverty is a not an indicator of the personal qualities of the tenant.  It's an indicator of the stability of their finances.  Tenant finances impact more than their ability to pay rent. If they can't pay for utilities or have no cash to deal with even the smallest cleanliness or upkeep requirements, or move their non operational vehicle from the yard, that's going to directly affect your property. There are of course exceptions to this, and many people live in rural areas where housing and rents are cheaper and not an indication of poverty.  

    The TK model is attracting buyers that would not otherwise dare to buy a $50-75K house in Dayton or Detroit or Indianapolis.  It's not just the acquisition and rehab of the properties.  It's the level of removal from the tenant pool.  If you never go and drive the neighborhood, your TK provider does the rehab, and you hire a PM, you never have to deal with your product or your customer.  TK has taken this to a whole new level in the low income rentals.

    I have never read anything from you that I can disagree with. This post takes the gold. $600-$700 in an SFR in Mid-West cannot make money by definition. It takes $1,000+. Apartments can do well at $600 - $700, but only if you are the manager and manage the hell out of them. It's a tenant class issue, resulting in excessive economic losses, coupled with increased R&M and CapEx.

    Everyone wants the magic pill. Good luck :)

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Peter Lohmann:

    This has nothing to do with the provider. The model itself is flawed to hell.

    That is correct. Anyone purchasing property for 15 to 30k and expecting $600-$700 rents to flow like manna from heaven is in for a rude awakening. There have been (and continue to be) several outfits operating in Columbus operating exactly like the one described by OP. For a while, we managed property for one of them (before we figured out exactly what they were doing). The clients they handed off to us (after the property sold) have universally and without fail lost money. They have all either sold their property or call us monthly with sob stories and accusations as to why they are not making money. All we can do is gently explain the financials.

    Do not purchase property (or anything else) from slick-talking investment groups with webinars and cruises and hyped-up marketing and literature. Do not purchase property that comes with any sort of "guarantee". These companies come and go like thieves in the night, and you'll be left holding an empty shell of a property that you paid 2x market price for.

    My own experience is that the tenant pool paying $600 rents is flawed, doesn't matter what you pay for the property.  A $600-700 housing payment in many, many parts of the country and for many households is a clear sign of poverty level income and/or or lack of income that requires government assistance.  Poverty is a not an indicator of the personal qualities of the tenant.  It's an indicator of the stability of their finances.  Tenant finances impact more than their ability to pay rent. If they can't pay for utilities or have no cash to deal with even the smallest cleanliness or upkeep requirements, or move their non operational vehicle from the yard, that's going to directly affect your property. There are of course exceptions to this, and many people live in rural areas where housing and rents are cheaper and not an indication of poverty.  

    The TK model is attracting buyers that would not otherwise dare to buy a $50-75K house in Dayton or Detroit or Indianapolis.  It's not just the acquisition and rehab of the properties.  It's the level of removal from the tenant pool.  If you never go and drive the neighborhood, your TK provider does the rehab, and you hire a PM, you never have to deal with your product or your customer.  TK has taken this to a whole new level in the low income rentals.

    I have never read anything from you that I can disagree with. This post takes the gold. $600-$700 in an SFR in Mid-West cannot make money by definition. It takes $1,000+. Apartments can do well at $600 - $700, but only if you are the manager and manage the hell out of them. It's a tenant class issue, resulting in excessive economic losses, coupled with increased R&M and CapEx.

    Everyone wants the magic pill. Good luck :)

  • Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
    10y

    @Ann Howell...Sorry to hear about your experience.  Birmingham is a great market for 20% return.  Keep it moving.  Let me know if I can help.  

  • Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
    10y

    Screen, Screen. Screen...It's not a perfect MODEL!!!...

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Charles Worth:

    @Ben Leybovich

    There is a reason in most other investment or gambling markets there are very clear rules about what you can and can't sell and to whom. There are actions bought every day about that. The reason is because many people don't know better and considering the real lack of reliable information, unlike in say the equity markets, it is a very hard thing to "know" with any certainty as you may know because you do teach people in your courses. 

    Much like in other markets I think most people likely know one or two people who made money in the asset class and thus assume they can too.    

    I'm not so sure about that.  I think most people entering TK or low income rentals today probably know one or two other people who entered the market in the last few years and haven't been burned yet.  I really doubt that too many know people who've been in the asset class for 10+ years and made real money. Those people don't walk around talking about it.  You'd never have to go out-of-state to find such investors.  There are investors in every town, whether it's Santa Monica or Boston or NYC or Buffalo that have made money in lower income rentals.  Most didn't buy TK.  

    I used to have mixed feelings about protecting newbie investors from themselves.  Didn't want someone to lose their little retirement, but didn't think government should interfere.  Now I think that maybe interference might be needed to protect both the tenant and the investor.  

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Ben Leybovich:

    I have never read anything from you that I can disagree with. This post takes the gold. $600-$700 in an SFR in Mid-West cannot make money by definition. It takes $1,000+. Apartments can do well at $600 - $700, but only if you are the manager and manage the hell out of them. It's a tenant class issue, resulting in excessive economic losses, coupled with increased R&M and CapEx.

    Everyone wants the magic pill. Good luck :)

    Interesting.  I have my own number for SFHs in CA markets, and it's definitely more than $1K.  The capex issue with $600 rents is huge.  That kind of rent does not make any sense when it comes to a roof or main line or new HVAC.  Or all three that could happen in a 10 year period.

    The newer TK operators have no long term performance data so it's just marketing right now.  Some don't have any direct PM experience or are not connected to experienced PMs so have real numbers on rents collected and maintenance.  To be clear I'm not against TK. Just the lack of understanding of the risk in rentals in general, and in low income rentals in particular.

  • Ozzy SmithPro Member
    Specialist · Dayton, OH · Member since 2014 · 352 posts · 265 votes
    10y

    I'm not sure how this got started but sounds like something went wrong and now the blame game is going on.  Someone also stated that you can't take 15K-30K properties and turn them easily into $600/m rents.  I can tell you from experience that yes you can... I do it constantly.  That leads back to the first.  It all comes down to a matter of due diligence on YOUR part as the investor.  It's not anyone's job to find you a good deal but your own.  So then you say but that's what I hired the TK for or the property manager to do.  Yes that is true but maybe you should have researched that company a little better before you hired them.  Maybe you also hire an independent contractor that specializes in rehab to do a thorough walk through of the property and incentivize him to find as many things wrong with the property that he can factually back up.

    The issue with people investing with TK's is I call them lazy investors.  That is not meant negatively in anyway.  I love you guys because that is how I designed my business model to make money and someday I want to be a lazy investor as well.  It simply means that you are more willing to spend your money than your time.  That is the fantasy world where all of the problems start.  It always takes some time involved to manage YOUR business.  If you don't watch your money someone else will and never be as careful with it as you are.  The same thing goes for real estate.  Sure you can buy from a GOOD TK but finding a GOOD TK takes a long time to find.  Same thing with property managers... there are about 9 shady ones compared to 1 good 1.  Everyone is in business to make money and if you don't like what you get shop at another business just like you would for a car.  If you think the salesman is shady talk to someone different.  If you think the car is over priced shop till you find a cheaper one.

    I find very often (especially on sites like this) that people like to jump on the band wagon.  If someone tells a horror story about TK's then they all are bad.  If someone bought a city block in Dayton and retired early my market will be flooded with investors and my phone will ring off the hook.  We need to realize that this is MY BUSINESS and if it doesn't make money it is because of something I DID WRONG!  Not because the price of the house was wrong or the TK or the contractor or whatever screwed me.  The greatest thing about a capitalist society is that price dictates what is fair.  If everyone would do their own homework and discover the truth then prices will drop or bad companies will go out of business.  Bad business is paid for by those who didn't take the TIME to do the research and the due diligence to know they were being over charged.

    I tell everyone there is 1001 ways for me to make money in RE and even more ways to lose money.  My philosophy as cliché as it may sound is if I can help enough people out I will get what I want.  Constantly I am told I talk to much when I sell or when I'm talking with investors about my projects.  I'm told that I take to much time and give to much info.  I will assure you this... when I'm done with whomever I'm talking to they know exactly what my position is, what I can and can't do, and they KNOW ME.

    Lets stop generalizing things.  We get exactly what we pay for most times and our due diligence or lack there of gets us typically what we deserve.  I know I probably didn't make a lot of friends with this one but hey that's what facebook is for... BP is about making money!  If you care to disagree have at it I can take it.  If you agree or would like to learn more about me and my philosophy and how I do what I do send me a connection with a little about you and I will talk with you more.... happy hunting! 

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    10y
    Originally posted by @Account Closed:
    Originally posted by @Ben Leybovich:

    I have never read anything from you that I can disagree with. This post takes the gold. $600-$700 in an SFR in Mid-West cannot make money by definition. It takes $1,000+. Apartments can do well at $600 - $700, but only if you are the manager and manage the hell out of them. It's a tenant class issue, resulting in excessive economic losses, coupled with increased R&M and CapEx.

    Everyone wants the magic pill. Good luck :)

    Interesting.  I have my own number for SFHs in CA markets, and it's definitely more than $1K.  The capex issue with $600 rents is huge.  That kind of rent does not make any sense when it comes to a roof or main line or new HVAC.  Or all three that could happen in a 10 year period.

    The newer TK operators have no long term performance data so it's just marketing right now.  Some don't have any direct PM experience or are not connected to experienced PMs so have real numbers on rents collected and maintenance.  To be clear I'm not against TK. Just the lack of understanding of the risk in rentals in general, and in low income rentals in particular.

    Completely agree! Serge and I wrote this a few months ago and we came up with around $260/month CapEx replacement: http://www.biggerpockets.com/renewsblog/2015/03/03/why-you-cant-make-money-on-30000-houses/

    I am sure we missed a bunch of things, but a $600-$700 SFR rental certainly cannot support that. And coupled with no value add, a characteristic inherent to TK, the IRR is not possible.

    To your other point, having reporting and restrictions similar to Reg D PPM would completely stifle this marketplace. I sure do think that folks need protection from themselves...

  • Property Manager · Birmingham, AL · Member since 2015 · 1 post · 0 votes
    10y

    It's one thing to post about your experience, however, it's another to post about someone that was back stabbed by a partner and then in turn all clients of shared company tarnish an owner. In sense I can speak from experience and personally that 1 owner of BIP and another owner of BIP were not on equal ground. Before you, @Ann Howell point fingers. Make sure you are pointing them in the right direction. 

    On a side note: There is ALWAYS a risk when investing in TK properties. Everyone should do their homework and make sure ALL checks out the way you want it to. Come see the properties yourself, ask for the Rafter if you have a Section 8 tenant. Ask for a copy of the HAP, ect. These documents are owed to you as an investor. 

  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    10y
    Originally posted by @Account Closed:

    It's one thing to post about your experience, however, it's another to post about someone that was back stabbed by a partner and then in turn all clients of shared company tarnish an owner. In sense I can speak from experience and personally that 1 owner of BIP and another owner of BIP were not on equal ground. Before you, @Ann Howell point fingers. Make sure you are pointing them in the right direction. 

    On a side note: There is ALWAYS a risk when investing in TK properties. Everyone should do their homework and make sure ALL checks out the way you want it to. Come see the properties yourself, ask for the Rafter if you have a Section 8 tenant. Ask for a copy of the HAP, ect. These documents are owed to you as an investor. 

     Welcome to BP. I would assume you created an account to defend BIP ?  As a professional, no doubt that you are aware that in a partnership all of the partners are 100% responsible regardless of whether they are on equal ground. Your second post is right on about the purchase of any property whether it is a TK or not

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Ozzy Smith:

    I'm not sure how this got started but sounds like something went wrong and now the blame game is going on.  Someone also stated that you can't take 15K-30K properties and turn them easily into $600/m rents.  I can tell you from experience that yes you can... I do it constantly.  

    Nobody in this thread said you can't turn a $15K-30K house into a $600/mo rental. You absolutely can. I've done that, even in CA. 

    What was said is that the $600/mo rent is problematic in the SFH portfolio. Your profile says you started in 2006, took a few years off and are now busy with your current business. Please report back in ten years on the properties in your portfolio that are currently getting $600/mo rents. You'll have real numbers on vacancy, maintenance and capex.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Account Closed:

    It's one thing to post about your experience, however, it's another to post about someone that was back stabbed by a partner and then in turn all clients of shared company tarnish an owner. In sense I can speak from experience and personally that 1 owner of BIP and another owner of BIP were not on equal ground. Before you, @Ann Howell point fingers. Make sure you are pointing them in the right direction. 

    On a side note: There is ALWAYS a risk when investing in TK properties. Everyone should do their homework and make sure ALL checks out the way you want it to. Come see the properties yourself, ask for the Rafter if you have a Section 8 tenant. Ask for a copy of the HAP, ect. These documents are owed to you as an investor. 

    You can't be serious.  Partners aren't employees or business associates.  Absolutely you will be implicated by any business partner's actions.  Absolutely your reputation is the line. Word of advice:  you don't live it down by accusing your critics of not having facts.  You suck it up and take full responsibility for your alliance with a bad actor.

  • Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    10y

    @Account Closed

    I certainly did not mean to imply that there should be more regulations I was simply pointing out that in other markets (including parts of the real estate market such as lending) it exists because at some point it was determined (rightly or wrongly) that certain parties needed protection and that at times blame also needed to be placed at the selling parties door. 

    As to how hard it is to find someone who has made money in that asset class (or says they did) I am from NYC so I certainly don't know many people playing in that space here but all anyone else reading this would have to do is go to any of the Ben PIG threads or $30K house threads (probably among the most popular on here) to find tons of people defending that asset class as making them money. I have a hunch you are correct about the 10 year time frame but I think it is hard to find many people with that much experience in general esp after the crash. 

  • Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y

    That is a good point that seems to get missed or maybe glossed over by some marketers. 

    "All real estate is extremely high risk. ... Examples include vacation rentals, low quality properties in bad areas, college rentals, etc" Forbes 

    TK cash flow speculating is no exception. Jay, Anish and some others always say you need volume and or quality to help minimize risk. Buying one or two random sub 100k TKs far away is about the same as rolling dice maybe. I doubt many TK buyers are very aware of this as I get the impression they are thinking these are conservative investments. Some numbers I have seen presented and guarantees are nearing the edges of what is likely legal with most other investments.

  • Mobile Home Park Investor / Licensed Indiana Real Estate Broker · Chicago Area, IL · Member since 2015 · 262 posts · 135 votes
    10y

    Terrible!  Thank you for sharing.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y
    Originally posted by @Charles Worth:

    @Account Closed and @Ben Leybovich

    I I have a hunch you are correct about the 10 year time frame but I think it is hard to find many people with that much experience in general esp after the crash. 

    Nah.  Lots of  B&H people had experience before the crash.  And sense.  They did not buy stupid nor refinance stupid during the Bubble.  I have buyers who didn't buy a single thing between 2004 and 2009.  They're way slowed down right now too.  Hardcore B&H people don't play appreciation games, even in California.  

    You should look at some ownership data, even for Manhattan neighborhoods.  You'll be amazed at the number of 10+ year owners with multiple properties.  Not empires, just performing holdings, just regular old buy and hold mom and pops.  But like I said, they don't go around talking about it.  

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