I am new to this site and just organizing my LLC to launch into investing so i am reading all of these blogs - very educational. I have not seen anything on Pinnacle but will do some research this week - but after reading all of these responses my initial impression is that this is a business designed on a PARAMID SCHEME. New money comes in and pays the old investors. The classic failure of the typical pyramid scheme is that there was no investment attached to the scheme - money came in and money went out and pretty soon all of the new investors or backers as they are often called get stuck because no new money was coming in. Seems like these guys have tied in the pyramid scheme to real estate investment. They are using the investors money as cash flow to their investment - the benefit to them is that they are using other people's money and as long as they could get new investors and quickly turn over the properties they are acquiring investors might get what they are promised. So i guess the classic operational formula for them is
NEW INVESTMENT MONEY + RETURN ON INVESTMENT has to be Greater than LIABILITY DUE INVESTORS so we can see the potential of failure.
But like any pyramid scheme the the skeptics always say too good to be true and sit by the sideline and see other people getting the returns promised (like MZH) -
but MZH are the lucky ones because they entered early and got the returns promised - i dont think MZH is promoting Pinnacle as he has been accused of but it here trying to convince himself whether to now go back and invest his retirement savings. That is another trait of the typical pyramid scheme - many of those who get stuck holding the bag when it crashes were winners in the early days and were sold on the idea so they invested a lot more.
Granted Pinacle has reduce theri risk of failure by doing a number of things the typical pyramid scheme doesn't usually do:
1. They have tied in an illegal scheme to a legitimate investing business
2. They have expanded the life of the scheme by prolonging the payout time to investors - most of the typical pyramid scheme return investors promised amount in a lump sum in a shorter period of time thereby giving out more cash and increasing the cash stream problem.
3. Pinnacle actually invests and make profits on the investors money and thus bring in new money through interests.
But ultimately, like all pyramid schemes, the source of failure will be too many investors jumping in for the promise of free money with perceived minimal risks and when those liabilities cannot be met by the quick turn over of investment by Pinnacle then we will get the negative press that some of you cant find now.
My advice to MZH is to take your money and enjoy it and go on to something else - the fact that since you entered the payout time has been increased from 45 days to now 60 days is a sign that there is already a cash flow strain at pinnacle.
For me and my wife we will stick to our self flipping enterprise.......... Good luck.
