Anyone experienced with Lee Arnold's system

[Thomas Malone]

I read on Lee Arnold system . com that joining the inner circle gives access to up to 100% financing on residential loans including Property Purchase Price + Closing Costs + Rehab Costs if that amount is 65% of the after repair value (ARV) as determined by a third party appraiser. Has anyone had experience using this financing, or can recommend a similar financing alternative without the overhead of joining an inner circle?

[Bill Tyler]

@Thomas Malone As a fairly inexperienced real estate investor, I have not had any dealings with Lee Arnold or his inner circle.  A quick internet search led to quite a few complaints by people claiming to be ripped off, had deals fall through, or simply getting the run around each time.  A big question is do you have the $25,000 to gamble?

[Bob B.]

Thomas, you don't need to join an inner, outer or any circle to get 65% of arv.   Find a deal that meets that criteria and talk to local hard money lenders.  Spend the $25,000 on a deal not a consultant.

[Cecelia Redmond]

Where do you find "local" hard money lenders? Most I have found are never local.

[Jack Turner]

I am currently dealing. I think I have been taken for a ride. They say as I have just seen they will loan money. And there was no limit. Well I just brought them a portfolio for $3.4 million worth $6.5 million and now they don’t do this kind of a deal. Marc Mosseau was the leader at this Oklahoma City funding tour I went to and said contact me with my first deal. Well no return phone calls. I am about to lose my car my place to live basically my life. And no help.

[Cheryl Warner]

Oh no, I just signed up for this!!! What do I do to get out of it? Can I just try to cancel the card? It may be too late.

[Jay Hinrichs]

Originally posted by @Cheryl Warner:

Oh no, I just signed up for this!!! What do I do to get out of it? Can I just try to cancel the card? It may be too late.

yup stop payment.. also for future reference if you cant pay cash for these kind of educational events don't do it.

how are you going to do business if you have to charge this to even get started.. this is the very thing that really bugs me about the real estate education sector in the US>. talking people to go into credit card debt when they know full well only 10% or less of folks that try this or any kind of wholesaling / flipping/ notes / lending etc will do anything .. and especially if you have no capital. REAL Estate in any form takes capital.. don't let anyone tell you different 

[Chris Seveney]

Jack Turner have you tried posting this deal and see if you can get other partners. If it is as good as a deal you say there will be people out there

[Carmen Severson]

Try COGO funding, as this is their funding...go straight to them maybe?

[Pamela Rickey]

I should have answered this question when I saw it five years ago. However, at the time, I was so raw from my experience with Lee Arnold I couldn’t talk or write about it. It is very embarrassing to admit that a woman who has been an entrepreneur, taught college, and accomplished a few things in life, could be so totally taken in. Even now, I am having a hard time writing this, but I am forcing myself to do this in hopes that it will save someone else from becoming involved with Lee Arnold’s organization. Forewarning: This is going to be long and detailed.

How this started:

When we were young, we would buy a house that was livable, but in need of rehabbing, move into it (which allowed us to get a low interest residential mortgage), then rehab it, using contractors for what we couldn’t do ourselves. Then, we would move on to another house and repeat, either keeping the former house as a rental, or selling it on a lease with option to buy arrangement. It was a plan we came up with ourselves (no Internet back then) and it worked for us. We made money. Eventually, we did get tired of being landlords, and as our children came along and started growing up, we stopped doing it. However, nearing retirement, with our past experience in mind, we decided to try it again, this time just rehabbing one house to flip.

So, I set up a self-directed IRA so we could use the retirement money we had left after the recession, and bought a foreclosure house that needed a lot work. We had enough money to get it done and It should have been a good investment. But I had the misfortune of receiving a mailer about a real estate investment seminar, and believing there is always more we can learn, I went.

It was a Lee Arnold seminar. They told us they could provide funding for our real estate business, and having owned a business, I knew it was good to have lines of credit and other money than our own. So, after the one-day seminar, I spent a few thousand dollars to go to the 3-day seminar in Austin, Texas. I knew before I went that if we decided to invest in the “Inner Circle” it would be expensive, but would give us access to 100% funding within 72 hours, or so they said.

It turned out that Lee Arnold is an ordained minister, so on Sunday morning of the 3-day seminar in Austin, he held a church service and preached a very convincing sermon. If you were raised in church, as I was, and taught to hold ministers in high esteem, it is hard to believe that a “man of God” could be so duplicitous. But, of course, the Bible does warn us about “wolves in sheep’s clothing.”

It ended up costing us $35,000 (I found out later that some people in the Inner Circle class only paid $20k) to be in Lee's Inner Circle, which I joined for the sole purpose of having funding. A short time later, I found myself on a plane to Spokane, Washington, to attend an Inner Circle class which was taught by Lee Arnold personally. During the class, Lee told us repeatedly that as Inner Circle members, we could obtain funding up to 100% ARV of a property within 72 hours of completing the paperwork. He talked about it being possible to pocket money at closing. (That didn't seem farfetched because my husband and I had done that ourselves more than once—although we put it into rehabbing the house, not our pockets). He took the class to a closing on a property he was buying and showed us the check he got back. We also went to an auction so we could learn the ins and outs and know how to be able to buy and be able to get the funding from his company within the 72-hour time period auctions sometimes give you to pay.

We also were taken to see Lee Arnold’s finance company (COGO) headquarters, in Coeur D’Alene, Idaho. It does not take long to drive from Spokane, Washington, where our class was held, to Coeur D’Alene, Idaho . At the time, it never occurred to me that if you want to swindle people it is difficult and expensive to take legal action against a company that is incorporated in a different state than where they do business. I don’t know for sure, but I would guess they don’t hold any seminars, or do any business in Idaho.

I also was introduced to my personal Mentor, Chris McIntosh. Having a mentor was part of the $35k we paid. Chris is a realtor in. In addition to being my mentor, Chris had been asked to take the class on a “funding tour”. This would give us a chance to buy a house, funded through Lee Arnold’s company, which would be rehabbed by Lee Arnold’s contractors in a completely turnkey operation. When it was sold, we would get our profit. Everyone at the conference in Austin had also been taken on a funding tour in Austin and some people, who were already Inner Circle members, were there and bought houses, so I already knew something about how it worked. During the “funding tour” in Spokane, besides the ones we could buy, we were also shown a couple of houses in progress, purchased by people in previous Inner Circle classes, and one house that was finished, ready to sell. They looked very nicely done.

On the tour, Chris steered me towards one particular house. He said he had an option on the house so it had to be closed on by Friday. That was about five days away, so the 72-hour funding window should have been enough time. I asked Lee if there would be any problem with getting the funding, including the rehab costs, by Friday. He assured me several times there would be no problem. I also asked him to look over the paperwork Chris gave me to see if I was getting a fair contract. By this time, I realized Chris was wholesaling the house to me (unlike the other houses on the tour) and charging me to manage the project. Lee assured me it was a fair deal and assured me again I would be able to get the funding by Friday. I filled out the paperwork immediately and had it turned in within 24 hours, with time to spare for the 72-hour funding window.

Thursday came, and no funding. I reminded the loan officers that I was a member of Lee's Inner Circle. That didn't seem to matter. I told them we were told that, as members of the Inner Circle, we could get 100% of ARV within 72 hours, and that Lee had personally assured me that I would have the money in time. They said it didn't matter what Lee Arnold, the owner of the company, told me, the money wasn't available yet. I didn't get what was going on, but I still trusted Lee Arnold and Chris McIntosh so I thought it was some kind of fluke. I ended up postponing rehabbing the house I had bought in Indiana and forking that money over to meet the deadline on the house in Spokane. Boy, was I stupid.

The house in Spokane was supposed to be finished in three months. Chris kept having reasons for delays, blaming it on the contractor. In the meantime, as part of my contract with Lee Arnold’s company, Chris flew out to Indiana to mentor me and look at the house I was going to rehab.

When I mentioned I wanted to come out to Spokane to see the finish of the house out there and be there for the open house, he started insisting that I totally demo the entire house in Indiana. I didn’t think the downstairs needed it. It had some good architectural features that people loved, and the original plaster walls downstairs were in great condition, not even cracked. But he insisted that it all needed to be torn out. He was the “expert” and I paid a lot of money for him to be there. He made me promise that I would get the demo done completely before I came out to Spokane. I realized later that was a delaying tactic. One that cost me a lot of money. Yes, the upstairs needed it, but tearing out the downstairs not only cost a lot that was not in my budget, but also greatly added to the cost of the rehab.

I kept asking Chris when the Spokane house was going to be done; he told me he needed more money. The contractor had done things wrong and he had fired him. He had hired another one. The house would be done in a couple of months but it was going to cost more money to redo the things the first contractor had done wrong. I sent another $20k, per the cost spreadsheet Chris sent. By this time, I had to take out a loan on the house.

Six weeks later, I got a call from the original contractor. He asked me if I knew the other contractor had not even started on the house. I said no, it was supposed to be finished in two weeks. He told me I should come out.

It took me about 10 days before I could leave, but I drove to Spokane. The day before I arrived, I had no choice but to text Chris and ask him for the lockbox code. I guess that tipped him off that I, or someone, was coming, because the new contractor got a call from Chris. The next morning the contractor (Joey) came in for the first time and tore up everything the first contractor had done. It couldn’t be coincidence that he finally started work, the day after I asked for the lockbox code. By the time I arrived in the evening, everything was torn up—floors, walls, plumbing. The next day, Chris gave me another spreadsheet for what was supposed to finish everything for another $8k. As I found out later, that couldn’t even come close to what was needed, and Chris knew it.

The next two weeks consisted of frenetic work by the second contractor and his crew of three. I tried to stay out of the way, but I had to stop several things from being done wrong—spaces between kitchen cabinets that were too small by at least an inch for the appliances to fit, a walk-in pantry being built that was too narrow for anyone but a child to get into. Then, after Joey (the contractor), extorted more money from me, he, or his crew, stopped showing up except for a couple of hours every few weeks. I guess so they could tell Chris (who seemed to be travelling all the time) they were still working.

I met with the original contractor, the one that had told me to come to Spokane, and he explained that he had slowed down the work because he wasn’t getting paid on time. Chris would tell him I hadn’t sent the money when Chris actually had gotten money for the rehab at closing, plus extra that I sent for change orders (which had not been done). There were some things that some of his crew had done wrong—the kind of things that you list in walk-throughs, like paint spatter. Also, he knew one of his guys had done a bad job on the kitchen tiling and was planning to redo it. But Chris fired him so he wouldn’t have to pay him for the rest of the work. He said the house had looked way better before the current contractor started, which was confirmed by neighbors and other people who had seen the house. They all said the original contractor’s work had been fine—even the tiling was far better than what the 2nd contractor did as a redo.

I heard later that Joey, the 2nd contractor was spreading it around town the reason he hadn’t finished my job was because I was slowing things down by changing everything and, also, that I owed him a lot of money. Actually, I had paid him more than what he should have been paid based on the percentage of work done. I found that out because strangers that he was doing work for started to stop by to talk to me because they had doubts about him. Weeks went by.

I talked to liaison at Lee Arnold’s company. She talked to Lee who said I should have let him know sooner and that he would send his contractor out to look things over. I hadn’t seen Joey or his crew for weeks, so what a surprise-- two of his crew showed up shortly before Lee’s contractor showed up, and started working hard—and left right after. Lee, or someone, had tipped Chris off, and just as Chris had arranged for Joey to be working the day I arrived, he also made sure someone was working when Lee’s contractor came. I never could get any information about what Lee’s contractor thought about the whole situation. He couldn’t have missed some of the very obvious code violations, or the very sloppy work. Apparently, Lee only wanted a report for himself, not for any reason that might help me. He also asked me to detail, in writing, everything that happened, which I did. After that, the lady who was my liaison at Lee’s company stopped having any contact with me.

I cannot tell you how bad of a mess the 2nd contractor made. One night, about 4 a.m., Joey was using a nail gun on the kitchen subfloor. He then laid tile so badly that everyone who walked into the house couldn’t help commenting on it. When I went down to the basement, I discovered Joey had put nails in the subfloor that came through the basement ceiling and were so long they hung down about three inches below the ceiling. And there were hundreds of them about ¼ to ½ inches apart, so basically all the wood was perforated. That was when it occurred to me he was probably on meth. On top of that, he was supposed to replace support beams under the enclosed back porch section and he spaced them wider than 36” apart. Supporting the area under where the washer and dryer were supposed to go, there were only two 1x2s held in place by one nail at each end. I could go on and on.

By email, I asked Lee Arnold about leveraging the house in Indiana and using the money to finish the Spokane house and then do the Indiana house after the Spokane house was gone. We had covered, in class, levering one house to rehab another. Lee told me that was exactly what I should do and to contact the loan department.

I made an appointment, drove to Coeur D'Alene and sat down with a loan officer in person. He explained they could not do that. They could only loan 60% ARV (if I remember the % correctly). That was fine, because I didn't need the 100% ARV. But then he said they had to have a contractor's estimate on the Indiana house and the money would be doled out as things were completed, so could not be used in Spokane. That is not how leveraging works. Also, he told me loans were never done in less than six weeks minimum. Of course, I brought up again what we were told, as Lee's Inner Circle members—100% ARV, 72 hours to get the money. Not true. That never happens for anyone, Inner Circle or not. Apparently, it was all a huge lie. And that lie was the only reason I paid all that money and that lie was how I was sucked into all the rest.

I was there a long time with the loan officer, explaining the whole situation and listening him tell me how the process worked (completely different than what Lee Arnold tells his Inner Circle students). Later, I talked to him on the phone. Apparently, Lee Arnold had gotten on him about my “wasting” so much of his (the loan officer’s) time. Of course, Lee had not expected me to come in person and find out the truth about everything. He knew the loan would not be made. Usually, things are done by mail and they can just keep postponing or making excuses.

After I got rid of Joey (along with my money), I slept on an air mattress in one of the bedrooms for ten months and worked on the house as much as I could, sometimes paying for help. However, nothing was going to pass building inspection without completely starting over again. I finally gave up and listed it on Craig’s list. I got an offer the same day from an investor and got enough to almost pay off the debts, although we recovered none of our money. And I finally went home to my husband.

Last summer, we finally decided we weren’t going to be able to afford to rehab the house in Indiana and we were tired of driving an hour every time the grass needed mowing. Thanks to Chris, gutting it had made it more expensive to rehab and also worth less than what we originally paid for it. We sold it at a substantial loss, but at least recouped some money.

Analog:

I did get a lawyer, but he finally decided it was too expensive to sue a company that does business in a different state. Also, Joey’s contracting company is actually in his sister-in-law’s name, also in Idaho, a different state.

Chris McIntosh stopped by at one point and apologized to me for not believing me about what was going on--which he could have seen for himself, if he hadn’t dropped out of the picture. It wasn’t until Joey cleaned out a joint bank account and got Chris for $25k that he realized Joey was not a good guy. I found it hard to be sympathetic. He sent someone over for a little while to help with the work, but it was too little, too late.

Chris was also miffed that Lee Arnold didn’t pay him the $5k he was supposed to get[PR1] [PR2] for being my mentor. Chris made $5k from wholesaling the house to me, and another $10k for mis-“managing” the project, so I can’t say I am sorry. But Lee Arnold certainly should not have gotten to pocket the money I paid.

Chris started a REIT organization in Spokane and heads it up. He owns a large building in Spokane Valley where he conducts classes in person and online, and does deals with his students. I hear a few have made money with him, but many have lost.

I heard Joey was arrested for drugs, but haven’t heard much else. Don’t know if he is still a contractor. He pretty much burned his bridges with a lot of people.

There was one good thing that came out of all this. Once I realized I couldn’t fix things and that I was going to be in Spokane for more than a couple of weeks, I got down on my knees and asked God what He really wanted me to be doing in Spokane. I found a church and made some friends. Not long after, two of the many homeless people stopped by and asked if they could do some yard work for me. One thing led to another. It wasn’t easy dealing with thieves and drug users, on top of everything I was already going through, but I can say that there are several formerly homeless people who changed their lives and still stay in touch with me. One of them was a young woman in her late twenties, who had been on the streets since she was 16. She now has a home, husband, and children. There are others, also, who are now leading happy, productive lives. I thank God that He gave me the opportunity to have a hand in that. It is hard to say it was all worth it, but for that, it was.

[PR1]

[PR2]

[Robert Freeborn]

@Pamela Rickey

Thank you for sharing that Pamela. It’s right out of the crazy scammer text book, and what’s so scary about it is that each step makes sense at the time. We want to believe that those we meet are truthful and trustworthy. I’m sorry it was the exact opposite for you.

[Krysta Englestad]

Good to know. I never buy into these just watch and learn that is it. Sounds so appealing but it can all be done without any Guru!!! Hard work and knowledge and drive. A lot of people/companies give money!!!!

[Robin Miller]

Right now, Arnold is peddling the Capital Syndicate(CS) program for folks to pay $97 to get his system which shows you how to find investors for "private money." Supposedly, the CS program has you find folks looking to get their deals funded and as the CS "broker" you get to charge the buyer a % which gets paid at closing. I'm wondering if the investors that the "broker" sends to Arnold for funding are then made to join the Inner Circle in order to get that funding.

[Robin Miller]

The "private money", btw, is supposed to be Arnold's own money from one of his three "private equity firms." Curious.

[Terry Bean]

Did you ever get an answer to this question?

[Nate Marshall]

I have a lot of experience with Lee Arnold and COGO and found it very helpful. They have always been there when I needed to ask a question or work on a deal for a client. Their education and support gave me the confidence to expand my business and now have my own fund and growing membership

I have found that the majority of complaints from students of any education focused company failed to take any action and failed. It isn't the fault of the education company but of someone who would have likely failed no matter what.

[Nate Marshall]

Originally posted by @Robin Miller:

Right now, Arnold is peddling the Capital Syndicate(CS) program for folks to pay $97 to get his system which shows you how to find investors for "private money." Supposedly, the CS program has you find folks looking to get their deals funded and as the CS "broker" you get to charge the buyer a % which gets paid at closing. I'm wondering if the investors that the "broker" sends to Arnold for funding are then made to join the Inner Circle in order to get that funding.

Nobody is forced to do anything. They only offer their programs at the Funding Tour events they do. Those are 3 days, involve a bus tour and more. Not the typical 2 hour hotel room seminar with high pressure sales reps asking for credit cards etc. 

As for $25,000.00 I believe that is quite high. Their Master levels all offer 100% funding with Tuition reimbursement after 4 deals. They fly people to their office in Idaho and put on a pretty good deal. 

As far as I know they are the only education company with its own funding. 

[Tom Benton]

I have just started in a 3-day training for the Lee Arnold broker certification program and thus far just completed the online material required for preparation. It seems to be focused in being a broker of COGO Capital loan programs or other private lenders within the Capital Syndicate network. The training is pretty thorough focused on lending hard/private money to other fix and flip investors, or for my own deals for which I could pay myself as the loan broker. No requirement to be in the inner circle other than to get the 100% funding up to 65% of ARV, otherwise it is 90% of acquisition cost + 100% construction costs up to 65% of funding. There is no requirement to use them as mentors for doing the rehab projects as described in the horror story above, but they do their own underwriting so they will be investing themselves to assure the deal makes sense and is successful to assure they get their payments and interest. All which they cover in the training. The initial online material is $97 and the 3-day certification is $1,495 (after $1,000 discount), all which will be reimbursed with first few deals. I'll update this post once I see how that goes!

[David Robinson]

@Thomas Malone I have not read or hear of Lee Arnold but interested in this discussion to find out more.

[Wayne Roberts]

The Lee Arnold system of real estate is a big ripoff and should be shut down. Stay away from them. I have spent about $45,000, Was promised 100 % financing without any word of a percentage of ARV. LOTS of programs out there better and LOTS cheaper than Lee Arnold.

[Tina Mendoza]

I have tried to block this fraudster so called Real Estate Investor/agent/ broker, but instead of refunding me the $5.091 I has taken from me without any results he keeps charging me. He just charged me another $99 after I just disputed $99 on 03/02/2022, but today he charges me another $99 after I have repeatedly asked him for a refund, I even blocked his hundreds of emails, but the charges still came through! He claims to be Christian Based, but only rips poor customers like myself. I'm a severely disabled senior of 79 and caregiver for my severely disabled son. This so-called investor trainer keeps charging me but ignores my requests and contacts. I blocked his 100s of marketing emails, but he still managed to put a charge through I'll dispute again. He is also giving me a bad reputation with my bank. For a so-called Christian hosting a Christian Ministry and makes us get up at 6am on Sundays for his sermons, he sure doesn't practice what he preaches, but instead is a cover up for getting rich. He even tells us not to do business with seniors on Social Security or with newbies, but he has no qualms of ripping me off on Social Security and a newbie! If I block my card it'll take at least a week to be able to use it! I  called my bank today, to blocked him from charging me further.

[Tina Ramone]

It pays to do your own research before you signup for any deals. I thank all the people who shared their experiences with Lee. I am deeply sorry for those ones who have been taken for a right. I pray you get back more than what has been taken away from you. I am looking for legit hard money lenders. Does anyone know of any? 
You all stay safe. God loves you all.

[Eugene Kolea]

Quote from @Tom Benton:

I have just started in a 3-day training for the Lee Arnold broker certification program and thus far just completed the online material required for preparation. It seems to be focused in being a broker of COGO Capital loan programs or other private lenders within the Capital Syndicate network. The training is pretty thorough focused on lending hard/private money to other fix and flip investors, or for my own deals for which I could pay myself as the loan broker. No requirement to be in the inner circle other than to get the 100% funding up to 65% of ARV, otherwise it is 90% of acquisition cost + 100% construction costs up to 65% of funding. There is no requirement to use them as mentors for doing the rehab projects as described in the horror story above, but they do their own underwriting so they will be investing themselves to assure the deal makes sense and is successful to assure they get their payments and interest. All which they cover in the training. The initial online material is $97 and the 3-day certification is $1,495 (after $1,000 discount), all which will be reimbursed with first few deals. I'll update this post once I see how that goes!

 Hi Tom. Do you an update? I have signed for the exact same program last month but they eem to hire disrespectful Frat jocks as employees who insulted me a fee times and get mad at me. I asked for a refund outside the 3 days (ridiculous time frame to give to clients but it tells you everything you need to know about the company just didn't realise on time) but I told them I didn't receive the login until the 4th day and that I am the one who requested so I would still be missing the login of wasn't for me that didn't seem to make sense to Kevin the manager there who by the way called me a week later. Just incredible bad business practices. Just a scam from where I stand. I would love to hear you story.

[Victor Genel]

Thank you so much for posting this. I spent two days talking to Layne Stevens and listened. I was excited about these possibilities and at the same time skeptical. At the end skepticism won over. Started my research which included this post. I have yet to read a positive feedback. Just saved thousands but so disappointed. It sounded so good.

[Lathanza Williams]

Quote from @Tom Benton:

I have just started in a 3-day training for the Lee Arnold broker certification program and thus far just completed the online material required for preparation. It seems to be focused in being a broker of COGO Capital loan programs or other private lenders within the Capital Syndicate network. The training is pretty thorough focused on lending hard/private money to other fix and flip investors, or for my own deals for which I could pay myself as the loan broker. No requirement to be in the inner circle other than to get the 100% funding up to 65% of ARV, otherwise it is 90% of acquisition cost + 100% construction costs up to 65% of funding. There is no requirement to use them as mentors for doing the rehab projects as described in the horror story above, but they do their own underwriting so they will be investing themselves to assure the deal makes sense and is successful to assure they get their payments and interest. All which they cover in the training. The initial online material is $97 and the 3-day certification is $1,495 (after $1,000 discount), all which will be reimbursed with first few deals. I'll update this post once I see how that goes!

How did this turn out for you? Just curious to know if you had a good and profitable experience.

[Laura Byers]

RUN AWAY FROM DEALING WITH THIS COMPANY!!!!! They lure you in with promises of coaching and training. In addition of initial investment, many fees are required for multiple forms. 
I invested 20,000 in good faith. Unfortunately they would not refund any of it because I requested a refund outside of their 3 day window, even though I didn’t actually attend their training sessions, nor use their pay-for-use-apps. 
BEWARE! Seriously, not a good company unless you have real estate experience.