OfflineHello DG Family,
I want you all to be aware of how Jason and I were almost scammed by a potential private money investor.
Jason and I are in constant search of private money for our deals. Quite often we post on FB in regards to private money for potential deals that we have lined up. Well, Jason was contacted by an individual via FB and asked for more details on what we offer. Jason had the gentlman visit our website, he discussed how private lending works, what % we offer and what documents the private money lender will receive to secure his investment.
Initially, the investor asked great questions and seemed to be mulling the idea over. As Jason continued to talk to him over a month period, it seemed that the investor was indeed interested in being our private lender and offered $500k to start. This did not seem strange to us because we had already worked with another lender who gave us $300k.
To make himself seem savvy, he told Jason that he wanted to see our promissory note. We sent one over, he approved it and asked us to get it notarized. We did. Keep in mind there was no rush this took place over a 6 week period.
This is where it starts to get fishy. Jason asked for his contact information and he said that he was catching a plane to Limon to aquire a large food and beverage company via his company. He would return to the US on the 23rd of July. He reads emails daily and would continue to communicate via email. He asked to go direct to his bank at Fifth Third Bank and open an account. According to him all his money was with 5/3 bank and it would be easier to transfer. I called the bank and they said that they're only on the east coast and cannot let us open a business account because our LLC was established in CA.
After several emails back and forth regarding 5/3 bank, the investor tells us he just checked his 5/3 bank accounts and realized that he has spent more than he thought (he had just purchased an apartment building) and does not have enough money. He then told us no worries, he has a large bond that he can convert to cash, however, the bank is located in the United Kingdom.
At first, Jason and I didn't think anything of it. The guy seemed like an international traveler, talked a good game, and besides, he is depositing money into our account not taking out. So, he has his "portfolio manager" contact us via email. He has a sign a document allowing for deposit with account information. We call Wells Fargo (our bank) and they help us fill out the form. We email it back. The next thing we get is email stating that there is $850.50 in account fees and bond to cash conversion fees. So, I forward the email to the investor and basically say here are your fees and I don't know if you have already arranged the payment for this with your portfolio manager. The investor writes back and tells us to go ahead and pay it. He'll reimburse us when he gets back to the states.
No way! Red flag! The guy tells us that he just did this for a real estate firm in "Pitts." He gave them a $1mil and they paid $3k in fees. I politely wrote him back and told him that this scenario does not fit our business model, that we can wait until he returns to the States on the 23rd of July and no reflection on him, but his UK bank has a security warning out on email and internet scammers and that we have been advised not to proceed. Well, the investor wrote Jason and told him I had a negative attitude, Jason should just write the check now and send it because I will be ashamed when the money is deposited into our account. In addition, he is staying a few more days in Limon and then he will probably be stopping in Canada first before returning to the States. Needless to say we nixed the guy.
Some important points!
1. Don't ever pay fees on some one else's investments. You only pay your % and/or back end amount that you agree to.
2. Don't ever do a promissory note unless using a third party like a title company or attorney. This guy has Jason's signature.
3. After giving our account number, we immediatly went to Wells Fargo and canceled our LLC's saving and checking account and had them issue us another one.
4. This so-called portfolio manager used this product called Boxbe. It sorts your email accounts and it's free. If you are not on the recipients email book, then Boxbe pops up and asks for all your personal information. Thank God, both Jason and I were annoyed with the popup box and just entered our first and last name and email address. We did not fill out our address, telephone, etc. If we had, then the guy would have had our account numbers and our addresses. Not a good situation.
5. If you can't get the guy to talk to you on the phone then there is no deal. Looking back the guy did a great job of not giving out his information.
6. This guy is on DG's facebook page and other real estate guru pages, so watch out! He is hunting.
KimmyJ
Press on...
PS Jason email DG and he is looking into it! Thank you DG!
Like I always say it never hurts to check someone out. But at-least you new when it was time to bail.
Randy
www.adeptpropertiesllc.com
The U.K is another country where it runs rampant too. Good job at moving away from this.
Please mention his name. It is not Michael is it?
How scary!
I'm getting into private money and I have learned that the private lender should never be given any personal account information, and all monies should be deposited directly to an escrow account for the property I'm purchasing, not ever to me or my company personally. When they are ready to make a private loan, their money goes from their bank account directly to the closing agent (attorney or Title Company) in the form of a cashiers check or a wire transfer.
The real estate investor doesn't touch the money until after all of the funds have been properly secured by the real estate. The closing company will assure that this happens.
Thanks for the heads-up
“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light not our darkness that frightens us. Actually, who are you not to be? You are a child of God. Your playing small doesn’t serve the world. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We were born to make manifest the glory of God that is within us.”
- Nelson Mandela
This is scary Thanks for the heads up
I'm not on DG FB .
I'm doing Real Estate & I'm pretty honest with all my clients & explain to them that i can't Talk over the phone due to my Disability , but I do webcam chats & Mail . & I never ask for money cause the money suppose to come straight from the Ecsrow Company after everything Closes .
& I've been getting messages from The UK & Africa that I found fishy & Just delete them from my inbox cause I do not believe in doing dirty work its not worth it & its wrong .
Thanks for The heads up
I 300% AGREE with You , Thats Exactly were The Money should come from After closing , this Dude was trying to get these guys money .. which is Wrong
I've read Deans books the Money sent to you should only be sent after closing & From A Escrow Company ONLY . This is even when you do Assignment Deals , & finders Fees on Notes & BirdDog Deals .
SO I'm not sure WTF? this dude was trying to pull.
I'm getting into private money and I have learned that the private lender should never be given any personal account information, and all monies should be deposited directly to an escrow account for the property I'm purchasing, not ever to me or my company personally. When they are ready to make a private loan, their money goes from their bank account directly to the closing agent (attorney or Title Company) in the form of a cashiers check or a wire transfer.
The real estate investor doesn't touch the money until after all of the funds have been properly secured by the real estate. The closing company will assure that this happens.
thansk
Just stick with the company you done deals with in the past, just that simple. You'll never have to encounter this. Or better yet post it. If your HML can't process 2 loans at the same time they can always refer you to another sister company. And most times there reputation of doing business is on the line. So always stick with your old HML lenders before trying out new FB wanna be lenders or pre-tenders.
I thought it was a private money lender that was doing this. Was it a hard money lender?
Zion is correct that when you purchase a house all the monies is distributed directly to escrow not you. However, this was a unique situation in that this money was coming from a regular account not a retirement account. This private money lender wanted to open an account at 5/3 bank and add our LLC to the account. This would allow us to print our own POF without having to get him involved. In the "dream world" we would have had access to the account for verification purposes, but no monies could be removed and/or transferred without his approval. Can you see why this started out like it was on the up and up? Of course, it just went down hill from there.
KimmyJ
Press on...
What is the name of that individual? some of us here have a FB page and we do not want to get caught up with that crap.
PM me and I will send it to you.
Greetings KimmyJ,
I think that his information should be told to everyone on here so that NO one,seasoned and newbie's on hear would even respond to him. I am so glad that you have shared what you have. His infromation should be posted for evertone to see.
Wave
Well Kimmy I checked my friends list on Facebook and I do not have him on my list. How do you get all the good ones!?! LOL! He will scam the wrong person someday and find himself in a not so pleasant place called prison.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
I just spoke to an Investor friend of mine who just got his business off the ground & they have like 8 deals going on right now & I warned him of this PML scam since my friend is posting & looking for more Private funds like we are. Well, my friend told me they approached him also on FaceBook. I'm So mad that they played me for months until he started pulling the trigger on me. So be very aware because they're out there. I can totally see Investors having a deal under contract & when there looking for money & desperate to keep the deal alive, the scammers pull there stunt of
"I'm flying out of town so my broker will email you documents of funds transfer & there's a $800 dollar bond transfer fee but the funds will be transferred immediately to fund your deal."
Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
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Social networking has its downfalls, thats for sure! Thank you SO much for the heads up and providing the names.
I'm sure they just change the names & make new accts when they start getting exposed.
Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
LIKE my FB page http://www.facebook.com/JandBHouseSolutions