All Forum Posts by: Kathy Fettke

@James Wise Oh MY! Can you really sue someone for interviewing other people about their experience? How is that different than a Yelp review or any review for that matter? 

I was going to interview some people who got burned by Growth Equity Group, owned by Preston Despenas and Brett Immel and wondered if it would be libelous - but then I thought, digging for truth is done every day in the media. That's what investigative reporting is! Albeit, everyone seems to have their own version of what's true. 

I'm so sorry you're getting sued. I would think that would get thrown out immediately.

With that said, I do believe Clayton is in a tough position because he can't really talk details if he's in the middle of lawsuits. I imagine his attorney has said not to discuss it. It would be nice to hear his point of view. If he's reading this and would like to give his side of the story, I'd be happy to interview him on the Real Wealth Show. :-)  

I'm still hoping that he's innocent and didn't know what was happening. I'd rather believe in the integrity of our colleagues in real estate, at least until there's hard evidence of the opposite. God knows, I've been burned by contractors, lenders, turnkey providers and even attorneys - and I didn't know right away until it blew up in my face. 

@James Wiseundefined

The cheapest money you can get is on your primary residence. I've always felt it was better to refi at today's low rates and invest those funds. If you borrow at 4%, you should be able to invest those funds elsewhere for a minimum 3% spread. Much more if you are savvy. 

The key is making sure those funds are in low risk investments - secured ideally to real estate at a low LTV.

Plus, having a loan against your primary is one way to protect it, along with good insurance. A home paid off looks very inviting to a litigation attorney. Someone might just like to slip and fall "accidentally" in your home. If there's a loan and less equity, it's not as interesting. 

No preferred and a target of 6%? Yikes

@Kenneth Mooney That is an excellent point! An investor should probably talk to the PM first to see if they will work with that particular home warranty company. Thanks!

Thank you, Dave! What a great group. So honored to be the keynote here. Can't wait to hang out at the speaker dinner. :-)

Someone called me today (probably his wife) and said Preston has been trying so hard to clean up his image and was upset by this post. She said he didn't know what Brett was doing at the time and is innocent. I asked how could he not have known? Brett was his partner.

You can't clean up your reputation by running away.

Preston got to reap the rewards when the money was flowing at GEG. Now he needs to participate in the payout to investors who lost money when the properties they bought through GEG were never renovated, even after they paid for those renovations.

I will be contacting the SEC and FTC so they can take care of it.

@Kenneth Mooney its for my properties but also for our members at Real Wealth Network who buy rental properties out of state

Hi all,

Wondering if you've worked with a home warranty company that actually paid for items in need of repair.

Any suggestions would be very helpful!

Kathy

Hi everyone, 

I really should know the answer to this. The obvious answer is to sue when someone has committed fraud. Unfortunately, that is an expensive time-consuming process. And when the company you're suing has shut down and apparently has no money, is it even worth the effort?

I happen to know that Preston Despenas, one of the partners of Growth Equity Group, is still doing real estate in Texas. I also heard Brett Immel was still doing business in Iowa, though I read an article that says he has been busted for lying during a bankruptcy hearing and may go to prison for 5 years.

Would it make sense to contact the S.E.C.? Any other government agency?

Basically, what these guys did to some of our Real Wealth Network members allegedly is:

- GEG showed RWN some of the properties they had renovated and leased out to prove their business model

- They told our members via a webinar that they buy, renovate and sell rental properties below market value to investors with 8% cash flow

- They said they offer non-recourse financing at 50% LTV

In reality, GEG sold properties that were not always renovated - even if the price point reflected a renovation. The non-recourse lender was actually the original seller who was financing - GEG was the middleman making a HUGE markup. GEG gave investors inspection and appraisal reports. (Unfortunately, the investor fell for this gimmick and did NOT get their own 3rd party inspections, appraisals or even visit the properties they were buying, against our best efforts to encourage proper due diligence and follow our check list for their own protection.)

So now some people are stuck with properties worth half what they paid (not all RWN members), with no renovation done, and constant repairs and vacancies. The problem is, they never got their own inspections or appraisals so how do they actually know if the renovation was done or not? 

I threatened GEG that we would go very public with this if they didn't fix the situation, and they said, "Go for it. We did nothing wrong." They claim the repairs were done and that the properties were worth more at the time of purchase but that the area has deteriorated since then.

Any help on this subject would be greatly appreciated!

@Account Closed Thank you for presenting your viewpoint. Consumer confidence is a trailing indicator in my opinion. It can change on a dime. A lack of reserves to this level, combined with low manufacturing numbers and potentially lower interest rates does not sound like a booming economy to me. :-) Sound like desperation and more financial engineering. We've come to think all this manipulation is normal, but so were no-doc loans last decade. I think it's most important to conduct a gut check and ask "Does this actually make sense? Like, common sense..." 

Either way, I am moving forward cautiously...