All Forum Posts by: Eamon Conheady

I’m curious about this situation it seems awful and it makes me very hesitant about putting anything into techvestor. But I have a question you might know the answer to since it sounds like you were at the frontlines: It looked like Metallic Blue Development was a user of scout pads. Sief’s other company, Blue Orchid, invested in the development fund then when MBD failed, they forced it into chapter 7. 

I can see that Sief ran Scoutpads and also a company that invested in a major user of scoutpads. What was his direct involvement in the company that failed, metallic blue development?

http://ecf-ciao.cacb.uscourts.gov/kioskPDF/ER_031523.pdf

@Erik Estrada

The crazy part was that when I had spoken with the Self Directed IRA custodian, Equity Trust Company, they had given me a list of lenders clients had previously used. They didn't recommend or endorse any of them, but it seemed legit. Then it all fell through and of course had no backup from them since they aren't affiliated in any way.

Still wouldn’t have expected it to be such a failure like that.

Good lesson I’m not doing advance underwriting fees!

@Alan Nelson yeah! Good point - should have included that. It was Civic Financial - I’m not sure they do referral bonuses or anything but I can share a contact info if you needed someone. The main person I talk with just changed shoot me a DM if you want!

@Mike Hern yeah, I did but it just seemed like more headache and costs that I wasn’t looking to take on. It was unfortunate, but I ended up with solid lender and was able to close quickly with them. The property has done quite well and has appreciated nicely over the last couple of years as I’ve gone through and improved things unit by unit.

Just posting this in case someone goes through the forums looking for non-recourse or retirement account lenders. No one should have to be ripped off like that. I’m sure he feels like he earned that money because of how much time he spent going to different sources supposedly. But that wasn’t what the funds were for, they were origination fees - not prepayment for his time to go find a lender.

Cheers!

@Lyle M Smith

Being able to pull in $3000/mo in rent on a 239k property seems quite attractive, so long as it isn’t terribly far away from being able to actually support those rents.

Always important to check local market rent comps too, keeping in mind that values can vary street by street in some places.

Living in one would open you up to better financing terms, but if you’re able to obtain seller financing for a duration longer than your planned rehab and re-rent period, that’s usually quite attractive as it saves costs all along the way. You might even be able to get a fully amortizing loan if he’s looking to collect income over a longer period, with the ability to transfer the loan when you sell the property later. You could take a down payment of, say, $75k and then carry a second position loan yourself of $100k while passing on the first position, the current owner’s note.

Hopefully the property isn’t in too rough of shape and the numbers all line up for you!

Have had my eye on some of the OH markets. They definitely seem like appealing areas to do some nice value add and growth over time!

Make sure you have it under contract before sharing detailed info with others. 

But should probably at least give a little info on what you’re doing and or where it is - might even get people with local connections to make it even sweeter.

Would be interested in learning more though!

I was purchasing a multi family through an IRA LLC and was utilizing debt to finance it, requiring a non-recourse loan.

Was given the contact info for:

American Money Loan Services

and the person’s name, Tom Vanderlaan.

He ended up taking my underwriting/origination escrowed money and strung me along for six months, frustrating me, the realtor, the seller, and making my negotiation potential crumble.

Eventually, after finally admitting he could not obtain a loan, he failed to return my capital, and completely stopped responding just long enough until the banks were unable to reverse any payments.

His bank was in a state like Indiana, while one of his companies is in Wyoming, and just all sorts of weird sketchy stuff that accumulated over the period working with him.

Attempted to report him to state agencies but there was no clear jurisdiction.

Essentially ended up screwed out of a substantial chunk of retirement savings and left to find my own lender elsewhere to close the deal.

Do not use American Money Loan Services or Tom Vanderlaan.

Although, I must say, doing the IRA LLC method is a royal pain. It adds a LOT of overhead and stress, so unless you have a large enough retirement account where you can do it without utilizing debt, I'd probably steer clear of the added complexity. I've been considering doing a write up on the experience and hurdles just to add to the conversation around this strategy.

@Mike Zaven it’s been going pretty well! Ended up not partnering with anyone externally and just made it happen. Have done some nice value adds to the property and rents have slowly normalized. Tucson is a great market!