Morning - I don't have the time at the moment to respond to everything contained in this thread and would suspect that it will be taken down at some point shortly when the lawyers start to get involved. That, incidentally, at this juncture, won't have a thing to do with me. I could care a less if the thread stands out here until the end of time. BP, to me, is all about educating and sharing with fellow investors...although it's really about selling books, products and seminars....it's still a great idea. I do appreciate the many calls of support and contacts I've received from BP'ers as a result of this nonsense.
There are lot's of lessons to be learned here, some of them painful to the participants, some laughable, some expensive and some downright scary. To me, there is no point getting into all of the other deals mentioned in this string. I'm happy to do that elsewhere if it proves to be enlightening to others. However, Spring is doing very well and will be a success story for my group. Lester was tracking that way before it got derailed by some of the "meddlers" writing here. Someone here actually contacted my JV partner on Lester and told him "no work" had ever been done. Totally not the case at all and a total misrepresentation but this string is full of that. He's thousands of miles away and had never seen the property so he panicked. It's absolutely amazing to me what people will say and do on a computer! Some here actually took it many steps further.
BP has some incredibly knowledgable contributors - some of them writing on this particular string. Some write simply to help others, some write really to subtly or not so subtly market their products, turnkeys or other services. Many of you are first time or not-yet investors who visit here for knowledge and contacts. It's a great place for that. If you go back through my comments on other posts, I've mostly come here, like some of you, to learn, share and take a break from everything else I am involved in. I love contracting and real estate and enjoy trying to help others. I have no need to troll through BP like some you pitching products and trying to land investors. I did a little bit of that through marketplace posts but that was over 2-years ago. Of all my investor partners, only 2 came through BP, Jon Pruner and one other. The rest are from other places or personal contacts and not BP'ers. In fact, some have come to BP at my suggestion and that's actually how I originally found out about this particular string. A couple of my investor partners told me about it.
It's amazing that a few people would take it upon themselves to try and "police" an online forum. To those I say, get a life or get busier in business! I'm not perfect and my halo is surely dented in a number of places but I have always had the best of intentions. However, before you start maligning a person's name and reputation, you best be in full possession of the facts and stick to those. Some of the folks in this string are likely to be looking at some litigation which is sadly why we have so many lawyers. I'd been advised by my counsel to ignore the whole string which is exactly what I've been doing. I'm sick of it.
The first lesson is simply that I never should have done this deal with Jon Pruner. He's a great guy when you get to know him. He let me know that he had a great job but had gone through an expensive divorce and had 3 kids to support. At some point after the deal got started, he let me know that he was driving for Uber to raise extra cash. It was the first red flag that he was struggling but we were already in the deal. I will let you draw your own conclusions from what he's posted here. He contacted me about the program and we had several at length conversations. As I did with Jay, I told him that we were just starting to put together the shared housing program but that this was the first round of deals in the program. Incidentally, Jays' deal was the first one in the program and he knew that before we did the deal. It was a gamble at some level and everyone involved knew that. Anytime you do something different, it takes time to work out the kinks and we're still doing some of that today. Remember at one point in time the world WAS flat.
Jon only explained part of his situation in those initial conversations. I told him as I tell anyone here....only invest what you can afford to risk...PERIOD. The week Jon and I decided to JV on Avon we had a contract come in on it for $46k cash. My real estate agent can corroborate that for those so lacking in life or business that they wish to examine every minute detail here...have at it! I had well over $100k in the property as I have been involved in it for years. It's a great little house in a rougher, transitional area with a ton of hope...but that hope has been perculating for nearly 2 decades now with blips of life here and there. I decided to try the program on it and see how we did. I sold the property to Jon for $18k, $10k down and $8k I would carry. He paid off some water and tax liens as well but I don't have that number in front of me. Jon never paid any money to me as a contractor or towards the rehab....not a dime though it's been stated differently here.
With Avon, as with Jay's deal, we planned on renovating, renting and selling it off to a foreign buyer. Unfortunately for us, that particular market in atlanta dried up during the course of the deal. The australian and canadians had been very strong in atlanta for sometime but most had been burned by single family rentals....and burnt badly. Atlanta is a tough rental market....not hard to rent but hard to collect the rent. Th eproperty managers often churn the property to get 1st month rent repeatedly. We thought our program which essentially creates multiple streams of income within a property would make more sense to them. It did but for a variety of reasons, alot of the small foreign investors evaporated from our market. With Avon, we never really got that far.
On Avon, Jon and I were initially planning to sell one of my own properties to raise the capital to renovate it. The house had sat unmolested for a few years and I had originally renovated it to live in it. While a rough area, I lived in the area for over 5 years so I know it well....better than most. We eventually decided to use Groundfloor as a crowdfunding source. We did so through our JV agreement and all of the emails back and forth between us will support this. We never did a $60k loan anywhere....we raised $25k through GF and I expected to put in the rest, if any.
The property was always secured with the exception of a rear bath window that was broken into occasionally probably by someone looking for a place to get out of the weather. The only theft at that point was someone had snipped the wiring at the electrical panel, taken the copper from the hvac and some holes in the walls. This was all done by the last "free" tenant I had put in several years ago. Back then, a local church asked me to help a family out and they ended up robbing the house. We went down and started some repairs, made sure the property was secured and got set to get the electrican started. Rick gave me the contact for the electrician he uses....someone I had actually worked with years before.....and he gave me a quote of $6k to $8k after going by the house....incidentally not the price Rick puts in the thread above. At his prices, if he is available, I may want to have him renovated one of our places. We went with someone who agreed to do the work for $4,800 with risk of loss on us. We had decided to completely rewire the house to make it a total electric house and bring it up to current codes. The outside meter base had been vandalized by previous tenants and had to be replaced....and actually relocated per the city to either the front or other side of the house.
GF asked to put a sign in the yard and we thought that would be fine. The electrician got started with his work. I was told that he pulled a permit but never confirmed that. I paid for a permit but he apparently never pulled it. I never checked nor would I....we hired someone else for that purpose. The following week, the electrician called to say that someone had robbed most of the new wiring. Someone had broken out the rear bath window again and we just assumed that the sign had triggered some activity. We had a working arrangement with Tony, who lived 2 doors down from us, to keep and eye on the place, keep the yard mowed and clean the gutters. He'd help us on other projects off and on for a couple of years. I prepaid him every quarter for keeping Avon moved and gutters cleaned. This arrangement pre-dated the deal with Jon. I sat on Avon for years but I tried to keep the yard up and we'd never been cited for it before.
We replaced the front door in our first round of work. The electrician reroughed his wiring and we got hit again. This time they smashed out the dining room window, took the new front door and the existing dishwasher. We checked with the neighbors and no one saw anyone around except for Tony, the neighbor who worked with us. We thought it best to take the sign down and wait a couple of weeks to do any more work. Without power, we couldn't really secure the property with a security system or much else really. The electrician had a meeting with the city inspector. I wasn't a part of the meeting. He invited me down but wasn't sure of the time...just that the inspector would come by to see him during the day. He gave him a window and the electrician planned to wait for him. I let the electrician handle his business as he had the relationship with the city. Back when we were turning 10 to 40 projects a month in the city, I had good relationships with most of the inspectors but I hadn't done anything in the city for a number of years.
At this point, we had done the second draw on our loan. GF was aware of what work had been done and had taken a look at it. GF does this on every draw. They either get pictures or someone comes out and takes a look at the project. We did the same thing on Spring & Lester. We told GF about the theft and that we were going to have to redo the work. The electrican told me that we would need to have the furnace in place, along with the stove, dishwasher and water heater so he could fast-track getting a rough & final at the same time to avoid further theft. There was a huge discussion about the risks and making sure the hvac didn't get stolen. The plan was to have it there, get the inspection and immediately get it out of there. The equipment was moved in the night before the inspection and the electrician waited all day on the inspector. The inspector came out the second day and, by then, the house had been hit again. Again, the rear dining room window was broken out, the security bars removed and the wiring taken....plus the front door, some interior doors and the appliances.
Pretty much beside myself at this juncture, I threw up my hands and walked away for a bit. We patched up the dining room window and secured the building. Jon was made aware of all of this as we went along. He offered to send us more money so that work could continue. At this point, I knew he didn't really have extra funds and I turned him down. If I'm the crook some of you clowns want to paint me to be, I would have said sure send it on. I really wasn't sure what to do with the property. I decided not to take another draw on the property and to just try and finish it out of pocket. In my mind, I was too far into the project to walk away and we already had renters lined up for all 3 rooms. We just had to get the systems done. The house sits directly across from the bus stop so it's a great spot for renters. All the same, I took a break from the property. As far as I knew, we still had Tony taking care of the yard and checking on the building. It was secure as far as I knew.
After a few months of sitting, I got a call and email from Jon that he had received a criminal citation for the property. He'd also had contact from Rick and some other BP'ers about the condition of the property and offers to buy it from him. I assured Jon that it was news to me and that I would handle it. Once a property in atlanta gets placarded for violations, it's a criminal process but it also takes the property owner showing up at code enforcement to get the placard removed. While the property is posted, no one can be inside working on the property or inside for any reason.
We got down to the property and found it completely wide open. The front door had not been replaced after the 2nd theft but we had a locked outer security door in place which was now wide open. The yard was 12" to 2' tall in places. It was then that we discovered that Tony's house was burned down, almost to the ground. It then made sense to me that this is probably who was robbing us. Tony knew I had lot's of housing and, if he wasn't guilty, he would have called me to give him a place to live. I never heard from him after the fire and can assume that's where our furnace, wiring, lights and other items went.
Either way, we made repairs the next couple of days and resecured the property. We replaced the front door and locks for the THIRD time and despite Kristen Poe's comment here, that picture IS of the replaced front door after it was installed. The door is still in place and in use for anyone who wants to wander on by. While there, my brother and the crew bolted the rear doors and windows. The pictures Jon posted were all sent by me via cellphone while we were doing work on the house for several days. All of that work was done on my dime as my intention was to see the project through.
I met with the code enforement officer who is a super nice guy doing a tough job. The irony was that Tony's house has been sitting burnt out and is still burnt out but the property has never been cited. Yet our house, which looked great from the street aside from the high grass, was the one with a placard! Part of this arose from a new mandate via the mayor to crackdown on slumlords or folks with unsecured or abandoned property. If you have followed what's gone on with Rick Warren in atlanta then you know the deal. The other reason, in my mind for the placard, was for someone to buy the house cheap. They saw an out-of-state owner and were unaware of my involvement or the JV agreement. We don't record the JVs or liens we might have to safeguard our JV partners. If they want to take the property back, they can with notice and they take it back subject to any construction loans.
I got the property squared away and Jon was panicking over the criminal summons which was served to him personally. He was advised by some of you to fly down here and handle his business. I didn't wash my hands of it but instead took it upon myself to handle it. I ended up in court, had the summons transferred to me personally and negotiated an $800 fine which I paid. I may be off in the dollar amount but all the same the issue was resolved without Jon having to come to atlanta. I've never had anything like this happen with a property and hope to never experience it again.
Jon was still anxious about the property and being fed good and bad information via this thread. Somewhere along the line, two separate investors called me about this thread and I hit the roof about it. It was actually before the criminal case. I called Jon and told him he must be out of his mind why would he put all of this information online....for one, he looks like an idiot, which I assure you he is not, two it just clouds the address for what we are trying to accomplish. I decided to stick with the project and see it through. On all of these deals, I only get a big hit when the property turns. On Avon, I would never see a dime in profit no matter what I did.
I suggested to Jon that we just redo the JV, he could quitclaim the property back to me and we'd put a lien on it to protect his money in the deal. It made perfect sense to me and the police had already stopped by and warned me about working on the house with the placard in place. Somewhere while we were hashing this out, Jay decided to reach out to Jon and two others about the bad experience he had on a project with me. We can address that one on Jay's thread and I will supply you with the names and phone numbers of the tenants at that time so you can hear the details from them if you wish. Either way, I may disagree with Jay's methods but I still like the guy and have no interest in trashing him as some of you have done with me. From what Jon told me, Jay suggested he list the property with Erica who is a part-time real estate agent posting here on BP. Jay also put her in touch with two of my other JV partners....one listened (lester), one did not....again, from what I have been told.
Again, in the midst of hashing out with Jon on what to do with Avon, I received a near hysterical call from Jon that he had been told that I had fraudulently purchased a $5k tax lien against Avon shortly after we did our deal. I was told that this came from a particular person here on BP but I won't bother dropping the name here. It's totally idiotic.....I have never purchased a tax lien in my life and, here, I would have just paid the damn tax bill. That was the last conversation I had with Jon and I have never heard from him since...aside from knowing that Erica had listed the property. I haven't had much to do with the property since that last call and was planning to let GF foreclose and then buy it back from them. Bear in mind, that I had tried to contact Jon repeatedly without success before surrendering.
We just found out that the property has in fact been sold for $17,500 and hopefully the buyer has title insurance. I am told that the agent represented herself as being a partner in the property but it may be that she had a POA to sign for the deal. She and Jon never disclosed the JV or the loan with GF. I'm a pretty well educated contractor with a law degree but I have no idea how that will all shake out. For my purposes, the buyer is a guy from the neighborhood who is trying to start over and live in the house with his child. I have no interest in getting the property back. Deals like mine are being done all over the country via JV agreements and crowdsource funding. I had no idea that the property had been sold until I came across it here.
That is my side of this particular deal. I reached out and called 3 of the biggest posters on this thread to have a chat and give them my side of it. I never heard from any of them. If you care to reach Kristine Poe you can catch her at . The rest have numbers posted here so feel free to contact them.
Realize that our markets change quickly....it's one thing we can count on. I believe in what I am trying to do and will continue to do so. Shared housing is a smart option and provides housing for many who could not otherwise afford it. It minimizes our risk of loss and fix up expense while maximizing the revenue. But it's a tough model to work. Bear in mind that Jay & Jon were the first two deals running through this program. We've done shared housing for decades but never as an investment model We now have a handful that are getting ready to turn and cashout. King, Spring, Lester and Avon were the only inner city houses we've tried. Any of you can always call or text me and ask whatever you want. I usually video the houses and work as we go along so most of what we do is heavily documented.
If you are doing inner city work, it's risky...it just is. You have to know the neighborhoods AND the people. Avon wasn't robbed by the neighborhood but by someone on our own team. I'm not sure what else I could have done different except let the project sit...but then the expenses and taxes go on. Plus, we had the GF loan to pay on it.
JV partners are just like dates.....some go great and lead to marriage and, some, you just wish you'd never met. We structure the deals so our partners can take them back if they aren't happy. While I have my detractors, I have my fan club as well. It's just like a sports team, when the next round of properties turns over at 20% to 30% returns for those JV partners, my stock rises once again and there is no end to the stream of partners headed our way.
As to GF, they run a great program showing good returns. Will there be some hits here and there....sure. In terms of an opportunity for investors...especially newbies or passive investors, you can get those returns anywhere else. They thoroughly vet their projects and inspect the work as it goes along....but there is still risk. We got robbed of all of our plumbing, the furnance and a chunk of wiring at Spring but we were still able to get it renovated and rented. We didn't get to do everything we wanted with it but as it cashes out, we will get to it. GF was able to meet those renters and we had them before the project was even close to finished. Just to show you the demand. Some of you have taken some shots at GF and for what purpose, only you know. At least one of you, called them and tried to lecture them on how to structure deals. I'd say try to know all of the details about what you are talking about before opening a pie hole that might get filled with expensive pie. Just a thought.
As to BP, I will continue to post and share what I can with some of you and, in turn, learn from you. We all have something we can learn from someone else. I also would caution you against rushing to judgment on someone without knowing the full story. Any of us, including those jammering against me have had multiple failures. Some learn from it and some don't. With most of what is here....something old, is something new again. I love the networking and sharing that goes on here. My motive is very simple I believe that shared housing is an opportunity to earn good by doing good. Our renters benefit from it greatly as most would either not have a nice place to call home without us or be in an over-priced extended stay. Some renters pay 75% or more of their monthly income on housing. My intent is to one day bring this program nationwide. If I should fail at it.....at least I tried and this life, to me, is all about the journey. All of us are on borrowed time....all of us....I can make a ton of money doing other things with much less headache. I choose this path because I personally think that this is the difference I can make in the world. It hasn't been easy and it probably never will be. We will keep you posted on the other projects as they close out.
As to those of you stirring a pot, continue posting but I say shame on you. Some of you tried to profit from this saga....worse, others of you intentionally put other investors on a path by offering advice and telling them what to do.....and then abandoning them like yesterday's trash. If you want to help...then do so.....what a couple of you have done here is simply offer to "rescue" someone and then dump them without another word.
I've said this many times......if you are going to deal with an agent in buying or selling real estate, deal with full time people experienced in that market. I can sell houses myself but I always hire the best whenever I do....including one agent I can't stand but she gets it done! Happy Thanksgiving and best wishes to you all.
On a last note, when something is told to me confidentially, I keep it that way. I am often difficult to reach...it is what it is, running the businesses we do. I've been a busy contractor in metro atlanta for over 20 years.....add in all the other stuff plus family matters and it can be tough to be me. Jon was confidentially told of my Ex's health issues and it was never meant to be shared.....especially online. She has suffered 4 strokes in the past 12 months and I now take my kids half-time & every vacation. My kids did not know anything about it and we planned to keep it that way. So much for that plan. Show some respect. I can't have a lot of respect for someone who would toss that into an online forum but maybe you do.
