Matt Motil Cleveland Private Money

31 Replies

Hi all, has anyone else here loaned money to Matt Motil in Cleveland? We have a note coming due on May 1, but haven’t received April payment and have not heard from him in a probably 2 months. Just seeing if anyone has another way to get in contact with him. Thanks

Originally posted by @Kyle Collette :

Hi all, has anyone else here loaned money to Matt Motil in Cleveland? We have a note coming due on May 1, but haven’t received April payment and have not heard from him in a probably 2 months. Just seeing if anyone has another way to get in contact with him. Thanks

 This thread caught my eye as about 2-3 weeks ago as I had an out of state investor reach out to me asking my advice on the same situation. According to this investor him and several of his colleagues loaned money to him and he'd stopped paying them all and completely disappeared. Sounds like you as well as them are in a tough spot. A lot of people like to tout that private lending is this risk free business alternative to owning your own investment properties. Definitely not the case.

Originally posted by @Kyle Collette :

@James Wise More than I’d like ha. Was my first time investing with him, so decided not to go super high, but still a decent chunk of change

 Well the good news for you and anyone else who's stuck in a jam like this is that assuming you are the first lien holder you shouldn't have too rough of a time doing a foreclosure on any of the properties you hold a mortgage on. I do not believe there are any Covid related moratoriums going on right now that would prevent the foreclosure of an investment property.

Originally posted by @Geoff DelGrosso :

@James Wise can you please share your info with me as well.

The notes payable to me are not RE related...

 What happened? You gave him a signature loan or business loan of some sort and he ran off on you? 

My info is all in my BP profile. In addition, I'll shoot this thread over to the investor who originally reached out to me seeking help for the money he loaned out to him. Perhaps he can chime in or get with you fellas. Strength in numbers type of think. Putting alleged victims in touch with one another did wonders for those caught up in the Clayton Morris / Morris Invest scam. Perhaps it can help you dudes out in your predicaments.

Originally posted by @Geoff DelGrosso :

@James Wise ill email you tomorrow...

It pertains to another business that he operates

 Ahh lemme guess. You loaned him money for Alpha Legends Gym?

@Kyle Collette @Geoff DelGrosso He holds a real estate license in Ohio. If he wishes to continue operating as a real estate agent this could be beneficial for you two. It is a license violation for an agent not to pay off a court judgement. So my recommendation for you two would be to get into court as fast as you can and present your case in front of a judge. If you win, that'd be all the more incentive for him to pay you your money.

If you end up getting to that point, below is where you'd want to go to file a complaint with the Ohio Division of Real Estate.

https://www.com.ohio.gov/docum...

Originally posted by @Geoff DelGrosso :

Already to phase 1. I doubt he's an active agent anymore. 

 On the Ohio Division of Real Estate website his license is showing active atatus with EXP Realty. 

I also lent money to Matt back in February of 2020. He was paying until February of 2021, but that's when he went dark. He won't respond to any of my messages. 

He sent out a mass email with all investors bcc'd at the end of March that claimed he was going to start selling properties to service the debt, which made me hold on getting a lawyer involved. But I haven't heard anything yet and this thread is making me think it may be time. 

Originally posted by @Kayla V. :

I also lent money to Matt back in February of 2020. He was paying until February of 2021, but that's when he went dark. He won't respond to any of my messages. 

He sent out a mass email with all investors bcc'd at the end of March that claimed he was going to start selling properties to service the debt, which made me hold on getting a lawyer involved. But I haven't heard anything yet and this thread is making me think it may be time. 

 Sorry to hear about that Kayla. In a situation such as yours, the smartest move is to lawyer asap. You want to get in there and try to recoup as much of your damages as possible as soon as you possibly can. 

In the majority of fraud or Ponzi Scheme cases the common theme seems to be that the money is mostly gone, and whatever is left runs out before a large portion of the victims are made whole.

Originally posted by @James Wise :
Originally posted by @Kayla V.:

I also lent money to Matt back in February of 2020. He was paying until February of 2021, but that's when he went dark. He won't respond to any of my messages. 

He sent out a mass email with all investors bcc'd at the end of March that claimed he was going to start selling properties to service the debt, which made me hold on getting a lawyer involved. But I haven't heard anything yet and this thread is making me think it may be time. 

 Sorry to hear about that Kayla. In a situation such as yours, the smartest move is to lawyer asap. You want to get in there and try to recoup as much of your damages as possible as soon as you possibly can. 

In the majority of fraud or Ponzi Scheme cases the common theme seems to be that the money is mostly gone, and whatever is left runs out before a large portion of the victims are made whole.

Sounds like the majority are first position mortgage holders.. this is super simple find an attorney that specializes in mortgage foreclosures and file. there is a federal law that went in post GFC that requires lenders to give a 90 day notice before they can file and I think it pertains to any loans on any 1 to 4 unit properties  the assets that Dodd Frank was designed to regulate. 

once the 90 days is up you file your foreclosure  in OHIO its a mortgage state so it cost more  money than a Deed Of Trust with power of sale state.  and takes at least a year . In the meantime the borrower will just rip the rents if Any.. Now if you read your mortgage small print you might have Assignment of rents clause  ( when i was lending I put that into all my security docs).  Then some tenants you can bluff and will send you the rent and you credit towards your interest payments.. others wont they are afraid of being evicted.  other wise you have to have a judge give an order ( again money) so most folks don't go that route. 

But for sure have an agent that is local do a drive by snap some pictures and give you a price assessment to see where your at.  Market in Cleveland is pretty robust but if this guy is just going to Ghost you your probably a good year or more away from getting your collateral back 

If its abandoned as the lender you have the right to secure it.. I have even moved tenants in myself  LOL.. kind of a grey area there but Hey its me against that them. 

I just took back 10 props in Cleveland and was there last week.. 3 have issues the others i can sell and recoup no problem. but I don't loan I own them so no foreclosure necessary.. I personally would never do a loan in a mortgage state ONLY deed of trust state with quick foreclosure time lines.   

People are paying some good money right now and some hedge funds as well. I just sold one of my OREO in Jackson MS.. 1 year ago as a vacant house needed full rehab I might have gotten 25k from a local for it.. just went into contract last week with a hedge fund for 71k NET to me they pay all costs and back tax's.. so something is in the water.  I think Cleveland might be in the same situation to some degree.

 

Originally posted by @James Wise :
Originally posted by @Kayla V.:

I also lent money to Matt back in February of 2020. He was paying until February of 2021, but that's when he went dark. He won't respond to any of my messages. 

He sent out a mass email with all investors bcc'd at the end of March that claimed he was going to start selling properties to service the debt, which made me hold on getting a lawyer involved. But I haven't heard anything yet and this thread is making me think it may be time. 

 Sorry to hear about that Kayla. In a situation such as yours, the smartest move is to lawyer asap. You want to get in there and try to recoup as much of your damages as possible as soon as you possibly can. 

In the majority of fraud or Ponzi Scheme cases the common theme seems to be that the money is mostly gone, and whatever is left runs out before a large portion of the victims are made whole.

JIm,  you know this guy  Dr. Motil has a pretty impressive resume' I can see where folks would lend to him  .. I wonder if you had a little robbing peter to pay Paul going on and the eviction moratorium and non payment of rent upset the apple cart.. JUST  spitting in the wind on that one. 

One thing is for sure certain Ghosting lenders/ investors is about the worse thing you can do as a sponsor even if your communications are bad news.. You need to communicate .. 

 

Originally posted by @Kyle Collette :

@Jay Hinrichs

Amen!

YUP  when the GFC hit I had 450 loans out from my company in the mid west cash flow states from Chicago to Atlanta.. over 200 of them went into default over the course of the year.. I learned then that mortgages on these fix and flip deals for me are to be avoided at all costs. 

Landlords were dropping like flies.. I ended up owning about 250 of these.. and having to sell them off taking loss's virtually everyone of them it was a blood bath for us HML in 08 to 2010.. and not anything I want to ever repeat.. those that started lending HM post 2011 have had the rising tide great market situation but even with the good market people fail all the time for various reasons.

Hopefully Dr. Motil will start communicating his plan for you guys and at least will offer you deeds in Lui .  But if he has a bunch of junior liens or judgements etc  then you have to run the foreclosures to clear those from title.  But a sophisticated borrower who might have 100 of these or more and they are rented can just stop paying rip rents and then wait for the foreclosures .  Now if there is a big group of you maybe and its a big Maybe   you might be able to push them into an involuntary BK and then the trustee can grab all the cash collateral. We are in a case with another bigger turn key guy that turned turtle and thats what the BK court did they snagged all his cash flow.. but he filed chapter 11 voluntarily .. And the trustee could see that the chapter 11 was not sincere so they basically took everything and are liquidating the assets through auctions. 

 

Originally posted by @Kyle Collette :

@Jay Hinrichs

Amen!

Also I could be wrong but I think to legally lend in OHIO one needs to be state licensed and NMLS registered.. again could be wrong but I know we are setting up a very narrow niche lending platform there for foreclosing buying and I got recruited because they need my license to be legal.

Now for the private folks who only do a few loans and don't hold themselves out as lenders like you obviously do there is usually a carve out. But if the license is required and its a flaw on the lenders side you can bet the borrowers attorney will raise that.. 

I have seen that In Oregon were folks did not know they needed to be licensed for 1 to 4 unit loans no matter if it was for commercial purposes.. some big HML missed it.. Borrowers were able to push back and get all their interest paid credited to principal and that just in pre trial negotiations who knows how a judge would have ruled.. Just throwing that out there.

And I could be wrong on the Ohio lending Licensure issue but the guys I am dealing with wanted the state license and the Federal registration that I have.

 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you