How a Ponzie loss turned into an apartment investment gain

Getting burned by a ponzie scheme inspired me to grow a successful real estate portfolio.

Just after the turn of the new Millennium back when everyone was worried about Y2K and loss of their company data and how it was going to effect their business, I was researching how I was going to invest a settlement I received into my future.

I ran into friends who were making money in an investment of bridge loans from a broker in Long Island NY. When I first heard about it, my gut instinct was that it sounded too good to be true. I learned that they were making about 14% per deal and each was about 30 days long depending on the loan. They would sign a contract that would say something like their money was guaranteed up to 99% of their investment. How can you go wrong? Yea. How can you go wrong. Well I didn't want to risk it and I still preferred my money in the bank.

At the time I was fresh out of my divorce for a couple years and had a chunk of change and didn't have my exwife talking me out of stupid things. It took several years of watching friends buying million dollar homes and 150 thousand dollar cars before I became more interested. And that was the beginning of the most stressful time of my life. I just didn't know it was coming. So against my better judgement I took a small amount of my savings and decided to let it ride. So I went to my local ponzie scheme broker, a guy who used to work for my brother and trusted because he seemed harmless and offered him 50 G's to invest in a bridge loan. He's currently doing 5 years and his associate 20 years.

So the way it worked was you invested in a construction loan tied to a piece of property that was waiting on a conventional mortgage. Worse case you would only loose one or two percent if it failed and would have to wait for the company to sell the property in order to get your money back. On the upside you made some great returns.

So I rolled my money into a couple cycles, that on paper seemed pretty good. So I did as any other skeptical person may have done and pulled all of my money out to see if there was a problem getting it back. It was that easy. Little did I know that it was part of their game. They knew as soon as I pulled it out I was thinking of how much money I was loosing by putting it in a savings account.

So there I was, money in the bank and access to an investment that neighborhood kids were making millions. Boy was I with the "in-crowd". It didn't take long before I went and got certified checks and mortgaged my home and bet everything on red to let it ride. Before I knew it friends were asking how and I was opening the door and letting them in.

After two years of watching my money grow it was the end of 2008 and the beginning of 2009 and the depression that was bigger than the Great Depression took everyone's money including mine. Bernie Madoff was just exposed and his victims were dropping like flys. I remember thinking I'm about to loose everything. I went to the main office in Long Island and ask the guy running the investment to please give me some money so I can survive. Unfortunately there was a long line. Hundreds of thousands of my own hard earned money, gone in an instant. I lost everything and didn't know how I was going to pay my bills. My house was going into foreclosure and my bills were falling behind.

I remember pacing back and forth from my kitchen though my living room and dining room and into my bedroom. I'm surprised there's not an impression in the floor. I was mentally and physically ill. I can probably do a blog on this alone. There is so much I can talk about but I'd like to focus more on my inspiration.

I always thought how this man was able to take the trust of people and telling them he was investing their hard earned money into a quality investment, when he was actually gambling it away in the stock market. He could have actually taken their money and really invest it in real estate and actually feel good about what he was doing for people. So I always wanted to take what he did to me and turn it into something good. Since then I have been investing my hard earned savings and buying income producing properties on my own. Recently I have taken on a couple of partners and have done my first successful flip and are making a nice profit.

My goals would be to find passive investors to invest in what I do best. My background is in real estate and construction, they go together very well and have been making great returns for me, and now I am sharing my expertise with investors and creating a win win situation.

Thank you for reading my blog. From here I would like to get into some of the properties I have acquired and bring some helpful tips to the table. Welcome aboard.