Growth Equity Group - How 170+ investors were scammed

Andrey Y. · 2019-01-04T14:21:31-08:00

In 2014-2015, more than 170 investors purchased 2 and 3 bedroom condo units from Growth Equity Group. This company specializes in investment properties in a self-directed IRA. More than 85% of their sales are bought in this fashion.Business was solicited mainly at investment conferences (Las Vegas a popular site), and some here at BP. I was one of those people who fell for their marketing.I was sold a condo in a neighborhood in Virginia (specific details to be disclosed later). They sold me the condo for almost $90K. The property value was however, at best, $65K. They came with sweet talk, a personable friendly nature, like a predator (although I didn't know it at the time.) They only allowed an appraisal to be performed through them. One can see why, a legitimate appraiser operating legally would not appraise these condos for what they were selling for.Growth Equity Group sold units to more than 170+ investors. 3BRs went for $96K, 2BR for $86K. Of course, they also used an "in house" lender specializing in non-recourse loans. They wouldn't allow you to use your own lender. It sounds fishy looking back at it, but not when they present it in a such a welcoming and favorable way. The rate would be 5%, which would balloon to 9% in 4 years!I see three main issues with what transpired:1. Sales. Growth Equity Group knowingly sold condos which were valued at $60-65K, for $85K-100K. They did this with open eyes and a smile. They even rushed me to sign on the dotted line.2. The Appraisal process. Appraisers in the past have been fined and jailed for falsifying numbers, for elevating the appraisal amount. If the appraiser is on the payroll of the company who is selling you a property, or they are getting business or money from the company who is selling you the property, this is a major conflict of interest.3. Financing. Industry standard for a non-resource loan is - during the balloon period, the interest rate cannot go up more than 0.5% per year or more than 2% total, no matter the interest rate environment. Growth Equity Group again used a lender that they were "working with" and did not let you use your own lender. Their loans carried an interest rate of 5%, which immediately jumps to 9% at the 4 year mark.

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

I have been in touch with the property manager who manages this condo complex. She has had dozens of investors who own units in this complex reach out to her. All of them were purchased from Growth Equity Group in the manner I detailed. Everyone is underwater, and the balloon payment is coming up this year or early next.

People are angry, frustrated, and furious. All were sold the same sweet story how great it is to invest with this company, their appraiser, their lender, in your self-directed IRA.

Of course, there advertised rents were a lie as well. GEG's only mission was to get you to sign on the dotted line.

Let me share my personal story a but more. I bought a condo from Growth Equity group in the manner I detailed above in early 2015. I put $45K down, with a purchase price of $86K.

This was all of the money I had in my Roth IRA, and 75% of my life savings.

Admittedly, since this was done through a retirement account, money that I theoretically wouldn't see for decades, I didn't do the due diligence on Growth Equity Group and the property that I should have.

The property will rent for 2-3 years if you are lucky. They you may get an eviction, 4-5 months of lost rent, and a $3000 turn-over bill at the end of that. So you can see, you won't make any money. The worst part is, I payed $90K for a property that is worth $65K if I am lucky, and this is exactly what it was worth when GEG sold it to me.

Growth Equity Group never thought for once the lives and families that will be affected by this. Many investors like myself will lose $20-40K after dumping this property. According to the property manager I am in touch with, some will have been scammed to be out in the six figures.

What gets me the most is, a lot of the people who invest in self-directed IRA are elderly folks in their 50s-60s-70s. Its a common investment among this age group. Not a lot of them are sophisticated investors.

Group Equity Group approaches these elderly folks, or someone like myself in my 20s who has been saving money in an IRA, and feeds them this story. We are given the asking price, their in-house appraiser at the ready to appraise the property exactly what they ask for in the contract, not the true market value.

Since the balloon payment is coming up, dozens of investors are in an uproar. We don't know what to do :( We are forced to sell the property at a 20-40K loss. I only purchased one property through them. Many investors bought two.. or five properties!

I am a positive person and I like to see the best in people. But what Growth Equity Group did here was wrong. It wasn't just to one person. As I am hearing, it was done to a lot more than 100 well-intentioned people who trusted GEG with their family's retirement and future.

7 Reply

Dean Letfus

Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes

7y

The saddest part of this is how gullible the investors were. Nobody who did even 5 minutes due diligence would ever deal with any seller who doesn't allow an independent appraiser or outside lender. It is 101 scam alert material. It will be a good education for those 170 plus. They kind of deserve it.

47 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Dean Letfus:

The saddest part of this is how gullible the investors were. Nobody who did even 5 minutes due diligence would ever deal with any seller who doesn't allow an independent appraiser or outside lender. It is 101 scam alert material. It will be a good education for those 170 plus. They kind of deserve it.

Ok, fine, I deserve it. Are you trying to throw salt into the wound?

14 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

This wasn't my first deal. I think the fact that it was within a Roth IRA and the way they presented it didn't make the seemingly obvious things click in my mind.

It's hard for me to imagine that a group of people would get together to form a company, with the intent of ripping off so many other people instead of running a legitimate business.

if this had happened to just five or six people, I could see what you are saying. But clearly, they must have had systems (and marketing) in place that swayed all these investors to purchase within the same complex and with similar terms.

2 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

7y

@Andrey Y. Yup i remember these guys and the projects well.. could never get a straight answer out of them how they did the financing.. however

If i was betting dollars to donuts they or an affiliate held the paper.. or it was private money.. not subject to any firm rules only what was agreed upon in the note.. so they could do whatever they wanted with the interest short of violate usury.

there are many that have sold properties in this manner.. Myself with my background in private lending I pretty much called them out and they did not want to deal with me.. :) not that i was interested in buying one.. I was curious how they were financing them.. so when it was their appraiser their lender it was I have no doubt either them financing them or someone very close to them.. i suspect your lender is an LLC.. not a bank. and your note may have been sold .. that is common actually I have bought a lot of this kind of paper over the years.. Its good paper when the buyer puts 50% down.. So good deal for lender not such good deal for owner.. Thats why i pretty much stay on the debt side of these deals not the ownership side

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18 Reply

Dean Letfus

Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes

7y

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

23 Reply

Lauren B.

Asheville, NC · Member since 2017 · 170 posts · 242 votes

7y

@Andrey Y.

I’m so sorry this happened to you.

I would comment further but I got stuck at the part where you refer to people in their 50’s as elderly.

61 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Jay Hinrichs:

@Andrey Y. Yup i remember these guys and the projects well.. could never get a straight answer out of them how they did the financing.. however

If i was betting dollars to donuts they or an affiliate held the paper.. or it was private money.. not subject to any firm rules only what was agreed upon in the note.. so they could do whatever they wanted with the interest short of violate usury.

there are many that have sold properties in this manner.. Myself with my background in private lending I pretty much called them out and they did not want to deal with me.. :) not that i was interested in buying one.. I was curious how they were financing them.. so when it was their appraiser their lender it was I have no doubt either them financing them or someone very close to them.. i suspect your lender is an LLC.. not a bank. and your note may have been sold .. that is common actually I have bought a lot of this kind of paper over the years.. Its good paper when the buyer puts 50% down.. So good deal for lender not such good deal for owner.. Thats why i pretty much stay on the debt side of these deals not the ownership side

You know, we talked about each others' lives and families with George, the main investor relations / vice president. The fact that someone can put up that kind a smile and front while knowingly swindling investors is really crazy to me.

I am getting a list of names together. It seems that everyone in this complex bought from Growth Equity Group. The frustration level is high and it will only get worse because of the financing terms that their buddy lender / LLC with the 5 to 9% balloon payment coming due.

Is there anything we could do? Take legal action, warn others about this company. I am willing to spend any amount of money (just not an infinite amount of my time) to expose this company and what they were (and still are) doing to hard-working investors and families.

2 Reply

Jai Reddy

Edmond, OK · Member since 2012 · 456 posts · 270 votes

7y

@Andrey Y. Thank you for sharing your story. Lesson learned for us all. On a personal level, you are young and you van recover. Keep your head high.

8 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

7y

Originally posted by @Andrey Y.:

Originally posted by @Jay Hinrichs:

@Andrey Y. Yup i remember these guys and the projects well.. could never get a straight answer out of them how they did the financing.. however

If i was betting dollars to donuts they or an affiliate held the paper.. or it was private money.. not subject to any firm rules only what was agreed upon in the note.. so they could do whatever they wanted with the interest short of violate usury.

there are many that have sold properties in this manner.. Myself with my background in private lending I pretty much called them out and they did not want to deal with me.. :) not that i was interested in buying one.. I was curious how they were financing them.. so when it was their appraiser their lender it was I have no doubt either them financing them or someone very close to them.. i suspect your lender is an LLC.. not a bank. and your note may have been sold .. that is common actually I have bought a lot of this kind of paper over the years.. Its good paper when the buyer puts 50% down.. So good deal for lender not such good deal for owner.. Thats why i pretty much stay on the debt side of these deals not the ownership side

You know, we talked about each others' lives and families with George, the main investor relations / vice president. The fact that someone can put up that kind a smile and front while knowingly swindling investors is really crazy to me.

I am getting a list of names together. It seems that everyone in this complex bought from Growth Equity Group. The frustration level is high and it will only get worse because of the financing terms that their buddy lender / LLC with the 5 to 9% balloon payment coming due.

Is there anything we could do? Take legal action, warn others about this company. I am willing to spend any amount of money (just not an infinite amount of my time) to expose this company and what they were (and still are) doing to hard-working investors and families.

Andrey other blasting these guys on social media.. I suspect it was willing buyer willing seller. and if they sold 170 of those units they established their own comps.. this is quite common out in the mid west.. and or lower value areas were homes are 120k and under and mainly sold for rental purposes.. since very few are sold to homeowners.

I went through a deep dive in this when I first started HML out side of the west coast and actually in Detroit.. were values can be 10k and the house next door sells for 100k.. Cant recall the appraiser but he had a very good dissertation why the values can vary so much.

Rentals have income risk its just a fact.. the market almost always prices for risk.

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4 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Dean Letfus:

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

Believe me, I have the same questions. I guess the guys are good salesmen? For some reason I didn't really think of it as real tangible money since it was in a Roth IRA and I know I cannot touch it for a while. I don't think we all are that stupid since clearly a lot of investors we're sold the same story and pulled the trigger.

I'm ashamed at myself because I've done well with other deals and like to think of myself as relatively sophisticated based on the results so far.

Not sure, quite honestly. I was in medical residency in Hawaii having the time of my life and I guess I was in a very positive mindset and was swindled by their sweet talk. I contributed to Roth IRA for at least seven years to build up enough money to pay these scammers for this deal.

I was talking to a realtor who is dealing with dozens of these investors who bought from them in the same complex. He sad that this sounds exactly like something from American Greed or a movie what we are going through.

I don't know at what point does George and Morris sit back, look in the mirror, and admit to themselves how many people's livelihoods they screwed over.

0 Reply

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

7y

Hey Andrey. Sorry to hear about this. I don't have any solutions...just replying so my colleagues can see it and to keep the post active. You may want to bump it on Sunday or Monday evening. The weekends can be tough for replies.

3 Reply

Dean Letfus

Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes

7y

Very sad @Andrey Y.. I doubt there's much legally you can do. You were offered a Pinto for the price of a Bentley and you bought it. You haven't been "scammed" in the classic sense as you do own an asset.

7 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Lauren B.:

@Andrey Y.

I’m so sorry this happened to you.

I would comment further but I got stuck at the part where you refer to people in their 50’s as elderly.

Don't be stuck there. That small line is not relevant to the gist and point of the post. In fact, I wrote 50s-60s-70s because this is generally the time people start accessing/using their IRAs and are the main targets for Growth Equity Group. Personally, what I would consider elderly is on the far end of the 50s -> 70s. Anyway, I do appreciate it.

1 Reply

Account Closed

Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes

7y

Originally posted by @Dean Letfus:

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

On a more realistic note, how is what you did any different than investing in the stock market with your 401(k)? People have no idea what intrinsic value a particular stock has or is worth or will be worth in 5 years. They don't do their homework or understand their investment. Then, If they are lucky, they get an actual piece of paper that says they own "shares' in something, whatever that means. Brokers lie all the time. You have undisclosed fees with mutual funds that you have to know to ask about. You at least got a tangible asset and a valuable lesson. Not that it makes it any easier but investing is risky. Better to learn that at a young age. By the way, when you reach 50 elderly is "80" and when you reach 80 I'm sure it must mean 100. ;-)

15 Reply

Dean Letfus

Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes

7y

@Account Closed, that's exactly why I would never invest in the share market. It's speculating not investing unless you educate yourself on each company you invest in. And even then the risk is exponentially higher than real estate with historically lower returns over time on average. If you don't understand it don't do it IMHO.

5 Reply

Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

7y

Originally posted by @Account Closed:

Originally posted by @Dean Letfus:

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

On a more realistic note, how is what you did any different than investing in the stock market with your 401(k)? People have no idea what intrinsic value a particular stock has or is worth or will be worth in 5 years. They don't do their homework or understand their investment. Then, If they are lucky, they get an actual piece of paper that says they own "shares' in something, whatever that means. Brokers lie all the time. You have undisclosed fees with mutual funds that you have to know to ask about. You at least got a tangible asset and a valuable lesson. Not that it makes it any easier but investing is risky. Better to learn that at a young age. By the way, when you reach 50 elderly is "80" and when you reach 80 I'm sure it must mean 100. ;-)

Wow, not cool Mike.

This situation has nothing to do with the stock market.

Andrey is trying to warn other investors about a real life company that preys on under educated investors and keep them from making the same mistakes he made while possible getting some advice himself, not turn this thread into yet another tin foil hat debate about how RE is SOOOO much better than stocks.

@Mike Dymski found a candidate for #4 on your list, not the commercial financing one.

12 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Account Closed:

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

On a more realistic note, how is what you did any different than investing in the stock market with your 401(k)? People have no idea what intrinsic value a particular stock has or is worth or will be worth in 5 years. They don't do their homework or understand their investment. Then, If they are lucky, they get an actual piece of paper that says they own "shares' in something, whatever that means. Brokers lie all the time. You have undisclosed fees with mutual funds that you have to know to ask about. You at least got a tangible asset and a valuable lesson. Not that it makes it any easier but investing is risky. Better to learn that at a young age. By the way, when you reach 50 elderly is "80" and when you reach 80 I'm sure it must mean 100. ;-)

Thanks for your comment. I don't buy the "tangible asset" in this case.

Okay, say I have a tangible asset that I was charged $25K above market value. Fine, I am following you there. But I hope you read the full story. Since, owning a crappy asset that you payed too much for is painful, but its tolerable. The kicker is, the "in-house financing" which is another method this company uses to fleece money off of you. They could have used reasonable terms that a standard non-recourse lender would use, and still have made money.

Instead, they chose the worst possible financing terms. So now you have dozens and dozens of investors, who have no choice. If you own an asset which is depreciating is one thing. Now, we are faced with a $250 mortgage payment that will jump to $360 overnight. So if before you were breaking even, now you are definitely done.

They lied once already. Why continue to look us in the eye and knowingly create heartaches which happen on Day 1, then again at year 4. Now, they got their $90K payday, their fake appraiser and bootleg lender was payed, and we are stuck with an asset that is bleeding cash. They could have screwed us once and that would have been bad enough, but that wasn't enough for these greedy individuals. They don't understand the this is money we worked hard for. These are family's retirement plans not play money.

This $25K+ that I will certainly lose could have been donated to something like "A Hero's Home" @Jay Hinrichs, but instead it goes to line the pockets of these unabashed criminals. Just selling an asset wasn't enough for them. They had to affect over 100 lives in this way.

3 Reply

Victor S.

WorldWide · Member since 2016 · 1k+ posts · 1k+ votes

7y

Andrey it sucks, and thank you for posting this, but if Clayton can pull off his scams in the wild (still), I don't see what can be done about these guys. Have there been other posts of this nature before? Can you not refi this condo at all? What is the rent on it that you can't even break-even at $360 pmt?

3 Reply

Joel OwensBusiness Member

Moderator

Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

7y

Putting other items aside. Did the mortgage note say it would reset in so many years and go to 9%? There are usury laws in every state. You might want to see a litigation attorney for a review. Were proper IRA investment procedures followed? Some, all, or part of the note may be deemed invalid if proper steps were not made to create it and service it. You might could try and get the note discounted where you sell at breakeven for current market value to preserve your down payment or force the original sellers to buy back the property at what you paid for it.

I do not know this situation and talking in generalities. Basically the attorney would be looking for any angle of attack where the seller did not give proper notice or structure to the deals they were selling for recourse.

No legal advice given.

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9 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

Originally posted by @Victor S.:

Andrey it sucks, and thank you for posting this, but if Clayton can pull off his scams in the wild (still), I don't see what can be done about these guys. Have there been other posts of this nature before? Can you not refi this condo at all? What is the rent on it that you can't even break-even at $360 pmt?

The rent is $780. this property has actually been cash flowing most of the time. However, the property manager is telling me that the average turnover cost is about $3,000. $3,000 for the paint and carpet? I'm not sure about that but that is what she is telling me.

The biggest issue is this refinancing bit that I spoke about. If the PI payment jumps from about $250 to $360 per month then for sure this property would not be worth it. The fact that a tenant may stay one or two years and there is a $3,000 turnover cost, that is also an issue. I think if you can get along turn tenant it may be okay.

However, I've contacted three non-recourse lenders who are national lenders and they will not do a refinance unless the property is worth $85,000 or more. This is to say, the non-recourse loan amount has to be $50,000 or more. My loan balance is about $42,500 or so.

0 Reply

Andrey Y.

OP

Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes

7y

If someone knows a private or other lender that is willing to refinance this note for me I would be eternally grateful. I know most of them have to be 50% or 60% loan-to-value tops. However, if I have to put a $40,000, $45,000, or $50,000 loan on this property to do the refinance that is definitely possible that I could do a refinance and see if the next tenant stays a while.

I just realized I forgot to add some of the city and state monikers so people can see this. I think it would be beneficial for loan officers and attorneys in the case that they can help me.

Newport News

Virginia

VA

0 Reply

Account Closed

Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes

7y

Originally posted by @Bill F.:

Originally posted by @Account Closed:

Originally posted by @Dean Letfus:

@Andrey Y., no not at all. BUT the fact is people who don't do any homework are speculating and gambling and often motivated by laziness and greed. There is no excuse for being so naive in the 20th century.

Of course it's sad but it's completely optional. This wasn't a complex or sophisticated scam it was dishonest people selling something for more than it is worth and manipulating people.

When your first red flag came up why on earth didn't you walk away?? This wasn't your first deal so why would you not walk away when they said you couldn't use your lender or appraiser. if you had taken 30 seconds to ask any investor you know or here on BP you would have been told to "Run Forrest run".

On a more realistic note, how is what you did any different than investing in the stock market with your 401(k)? People have no idea what intrinsic value a particular stock has or is worth or will be worth in 5 years. They don't do their homework or understand their investment. Then, If they are lucky, they get an actual piece of paper that says they own "shares' in something, whatever that means. Brokers lie all the time. You have undisclosed fees with mutual funds that you have to know to ask about. You at least got a tangible asset and a valuable lesson. Not that it makes it any easier but investing is risky. Better to learn that at a young age. By the way, when you reach 50 elderly is "80" and when you reach 80 I'm sure it must mean 100. ;-)

Wow, not cool Mike.

This situation has nothing to do with the stock market.

Andrey is trying to warn other investors about a real life company that preys on under educated investors and keep them from making the same mistakes he made while possible getting some advice himself, not turn this thread into yet another tin foil hat debate about how RE is SOOOO much better than stocks.

@Mike Dymski found a candidate for #4 on your list, not the commercial financing one.

Hi Bill. Get off your high horse. There are various investments and he chose one over the other. It is FAIR to compare investments. YEEEESH! Besides, by his own admission: "this property has actually been cash flowing most of the time"

Seems to me he ain't got no argument. Time to grow up and take responsibility for our actions. That's all I'm sayin'. In fact, I'm betting he went with in-house financing because it was "easy". Easy ain't always cheap. If he didn't like the financing he could have said "no" and found an investment he liked better. (No offense meant @Andrey Y.) ;-)