I had an interview with a representative of this company today. Here’s a summary of our conversation:
1)Investment options
a.)Invest $7,500.00 (one-time fee) for profit sharing opportunity of 25% (for the investor) and 75% (for Wealth 212). They will cover all costs, purchase and rehab, here after. Just sit back and collect commission check!
b.)Invest $13,500.00 (again, one-time fee) for 50%/50% profit sharing opportunity.
c.)All profits should be up to and/or surpass $50,000.00 per flip.
d.) Purchase prices cannot exceed $600,000.00 and renovation cost cannot exceed $100,000.00.
2) Every investor will be assigned to a specific geographic area that no one else “can farm in”.
3)The company was looking for “motivated and hungry” investors in my area to open new markets.
4) My questions that went unanswered or not satisfactorily answered to clear my doubts:
a.) How can I verify that your claims are true?
Answer: “I don’t have any more proof than what I am telling you. You should remember that our industry is heavily regulated and, besides, you will be protected by your credit card company if you thought the offer we are giving you was not what it is.”
b.) Am I going to manage approved projects once renovation starts?
Answer: “No, but you’d need to be present while we obtain 3 contract bids from 3 separate contractors. You might also need to check on the renovation projects from time to time. But we have well experienced project managers who will supervise all rehabs.”
c.) Do I need to put deals under contract before submitting for funding approval?
Answer: "yes"
d.)What is your rejection rate for submitted deals?
Answer: “I don’t know. But say you submitted 10 deals, it is possible that we’d approve all 10 deals. Big profits for you, right?” I answered “yes, sure”.
e.)If I understood you well, did you say that I do not need to pay for any appraisals and inspections on any approved deals? Financing both purchase and renovation costs 100%?
Answer: “You’re a fast leaner, my friend! Yes, we finance everything 100%, and you’d make 25% or 50% profit. Depending on what level you’d commit to today.”
Conclusion:
I politely informed the guy (I think his name was Brandon) that I was not convinced from what he’d explained. So I would rather continue to flip one house at a time to build my cash base overtime. His approach changed a bit upon hearing my decision. But he quickly reduced the required investment to $3,000.00 with no additional details about what is expected from a new investor. I simply declined and opted to look into the company more until there’s evidence that they are legit.
Disclaimer:
I do not intend to say that Wealth 212 or Keystone Funding Network is a scam or fraud. I simply refused to invest with them because I did not believe the sales person on the other end of the line. In fact, I might invest with them in the future if I find someone who has done profitable deals with them. For now, I’d pass.
