All Forum Posts by: Larry Spradling

****UPDATE****

I spoke to the property management company yesterday. It's Fairview Realty Group if anyone knows anything about them. They took over the management last year from Growth Equity Group and he told me that he has several landlords in the same position. He has looked into the situation and confirmed that I was part of a scheme between GEG and Genesis 1, LLC. They sold the property to GEG for $70,000 and he said GEG sold it to me the same day for $100,900, and Genesis 1 became the lender. The whole intent was to sell me an upside down property that did not cashflow inevitably forcing foreclosure so that Genesis 1 would get the property back and then rinse and repeat for the next investor.

He recommended that I stop making mortgage payments and that he would continue to collect rent from the tenant on my behalf. He said that it would take 10-12 months to foreclose, so I could walk away with that much in rent money at the very least. He said that he could not deposit the rent money into my IRA monthly. He would have to keep it and then pay me at the end of the process. I'm not sure why he can't pay me monthly. That sounds fishy to me. I don't know who to trust in this situation, or if I can trust anyone. Can anyone here confirm that I cannot collect rent if I'm not paying the mortgage?

@Clayton Mobley, @Jay Hinrichs, @Andrey Y., I would especially be interested in your thoughts.

 Interesting.  Have you seen this work?  How do you know that the tenant wouldn't get evicted after the bank takes over the house?  I like this idea, but I wouldn't want the tenant to be out of lease money and a home.  Would love to hear more about how this works.

Thanks. How did this end for you? Or are you still working through it? At this point, it looks like my best option is to foreclose. I paid $100,900 for a home that's worth $50k according to 3 different CMA's. No matter how long I hold the property, it's not going to be worth more than what I paid for it. I also have a non-recourse loan, so I'm considering taking my $37k loss and moving on. Not sure what else to do.

 It's a non-recourse loan.  As I understand how that works, if it defaults, they take back the property and forgive the balance of the loan.  Do you guys know if that's accurate.  If so, then as bad as I hate to, it seems better to default and foreclose than to sell.  If I sell, I will owe between $15,000 and $20,000 to pay the remaining balance, assuming the house doesn't sell for more than $50k.  

 Sent you a PM

 Sent you a PM

@Steve Vaughan @Clayton Mobley @Jay Hinrichs @Caleb Heimsoth thanks for further educating me on this. I first learned about turnkey two years ago listening to Clayton Morris. My IRA had gained about 3% in 20 years. Given that retirement was less than 20 years away I was convinced to do something different and a SDIRA was discussed in his podcast. I went through his company and somehow ended up with Growth Equity Group. I have no idea how that happened, but given what has come to light with Morris Invest, it makes sense. I transferred my IRA which totaled around $65k. They convinced me to purchase two homes and take out a non-recourse loan, which I did. So I also own a home in Tennessee. It's not losing money, thankfully, but cash flow is low. The big issue I'm facing is that I have less than $7000 in my IRA, and with a limit of $6k annual contribution, I don't have enough in it to pay off the loan amount after the sale. That's where I'm stuck. When I dove in, I'd never heard about bigger pockets. Ive learned quite a bit since finding this site and the podcast. I typically have to understand everything before I jump into something. I failed to do that here and trusted the people I was talking to. Shame on me. The worst part about all of this is that's all the retirement money I have. I'm a pastor, so what I save for retirement is on me. My plan is to buy rentals with my HELOC to try and generate passive income that I can retire on in 15-20 years.

@Clayton Mobley, I’m on a waiting list for purchasing a turnkey through your company. Right now I’m just focused on trying to get out of this mess.

Thanks for all of the insight everyone has downloaded to me on this thread. It’s encouraging to see so many people who care about other investors and take the time to offer wise council. Just wish I had heard of this site two years ago!

 That's what I have now.

 Sent you a PM

No. It was through their partner, Genesis 1, LLC. I contacted them and they said they did not require an appraisal on the property. They approved the loan based on cash flow.