Private Investor Question?

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Private Investor Question?

Richard Gaston
Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes

Has anyone ever hear of a business called Phoenix FCE Capital Limited, they are suppose to be a private investor/Angel Investors. I got an email from them saying they can help me with 100% Financing, which sounded good. I was thinking of buying this one lead and figured an approximate 75% ARV on this one house, keeping the other 25% for a profit margin. Basically I tested the waters, they sent me an application via my email, very basic. I filled it out and sent it back asking for $175,000.00, you with me so far? I just got an email back from them saying I was approved for the $175,000.00 plus a 5% interest rate (btw, they said they will charge me 5% at the start, sorry forgot to mention that) which got me in a dather (confuse for some folks who don't understand) Here is my figures, see if I am wrong. $175,000.00 * 5% = $8750.00 which added in my total payout should be $183,750.00 They figured $175,000.00 with a 5% interest rate @$4,775.71 with a total payout of $179,775.71.

I don't mind the discount but there is something wrong here, I gave them my SSN, so if they did a credit check they would've known my FICO Score is 580, they did not ask for any property information, I was figuring an approximate value seeing that I did not get all the numbers in yet, but I figured an approximate value at $220,000.00 for the property with a 65% to a 75% Loan on the ARV which gives me some leeway and I got approved? Granted I have to pay the loan back within a year but I figured that, I asked for a year, figured I can do a fix and flip and sell the property before a year is up. They are even asking for monthly payments??? I could do that but I thought it would be the other way around, actually I figured once the loan got approved I close on the house, they give me an upfront draw to give to the contractor and a draw after each project was done until the job was finished. If the Hard Money Lender didn't do that I was going to do that myself, good way to keep a budget as well as keep the contractor honest, don't get the final payment until the job is done. Now does everyone see why I am confused?

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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y

I guess I would be concerned about someone getting your name, address, SSN, and copy of ID. Just giving someone those alone is like giving someone money up front because a scammer can sell that information.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    Oh and I am doing a Google Search on them right now but I can not find any information on them via my search. I am trying to be real cautious here. I could use the loan but I not to sure about this company, how does the old saying go? If it sounds to good to be true???? I question everything when it comes to MY business, I don't want anything ruining a good thing. They got my info (email info) from an Angel Investment site I am a member of, asking for a Loan to help with my business, I was looking for a Bootstrap Loan so I can get my business up and running, well running anyways lol, I did get it up and going lmao but I was looking for a bootstrap of $50,000.00 to get my business running, seeing I have decided to do fix and flips I need equipment, supplies, a pickup as well as a trailer to haul all the bigger stuff around. I will see what happens.

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  • Bob E.
    Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
    12y

    Approving a loan without knowing what property / condition? 100% financing? 5% interest rate? Sounds too good to be true. Probably is.

    I would check BBB and watch your credit report in case these are some kind of sophisticated Phisers.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    Look out for at some point in the process for big money from you. Then the calls back stop and you are SOL.

    I do not know this company and I am not referencing them here in any way.

    When you approach any so called lender there are those out there that promise the moon for below market rates and just take fees for a bait and switch.

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  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    sounds dodgy as hell to me

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Bob E. @Joel Owens and @Jean Bolger ; thanks for the quick response. I agree with all of you on that. Bob, I was suprised as to that, I know the basic of what I am told of the condition of the house, I am guessing about $50,000 to $60,000 in repairs if that says anything. I figured if I got approved for that amount that the budget would be really tight to fix the house, but at least the profit margin would be decent, not enough to get rich on but decent enough. And like what we both said, if it sounds to good to be true, it normally is. And that would be something new for a Phishing scam.

    Joel, I am still waiting for the ball to drop, I am still trying to figure out how they figured in the 5%, my math and theirs don't add up.

    Jean, that is what concerns me. Even I think it sounds dodgy, one the application was a very basic app, my name, ssn, address, how much of the loan, and how long to pay it back. As I said earlier I just asked for approximately 65% to 75% of the ARV seeing when I fix it up then sell it pay back the loan plus interest, closing costs etc. So when I saw the application, and not a mulitple page app I was suprise to say the least, but I did fill it out. As I said I was testing the waters, but when I saw where I had to put my SSN in I was a little suprised seeing most Hard Money Lenders loan on the house not the applicant, just not all the way suprised though (I somewhat expected it as well). What really got me suprised is the fact that there is no place to put in any information about the house, even I don't have all the facts or pics of the house, yet. I mean yes the loan can help out if I decide to buy the house outright and do a fix and flip but before I even considered the loan I was considering on flipping the contract, but my GC flaked out on me when I really needed him the most, to get me some numbers on what the actual repairs would cost, then I was going to figure in the ARV after doing some comps on the house, seeing that its now zoned as a multi-family unit I figured I could get anywhere from $220,000 to $250,000 on it from the numbers I got when I did a search in the Bremerton, WA area more then likely $230K after all the repairs are done including Landscaping. So I figured I should go ahead and fill out the basic app, I expected a more detailed application later as well as questions on the property and requests for pictures of the house etc, I did not expect an email saying I was approved for the $175,000 plus 5% interest. It caught me off guard to say the least. I have dealt with Loan Officers and Brokers and normally Loans take a bit longer then this.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    OK, did a search on the individual Alexander Dittmair and found out he is the Director with Phoenix Capital Limited, Investment Manager. Here is the kicker, the company is based in London, UK. Ok is overseas investment companies subject to Dodd-Frank?

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    oh and an update to that last post, I also put the ball in their court. Seeing he said I was approved, I sent him an email saying I am not comfortable giving my Bank Account Information over the internet seeing about internet scammers and all, but said I can take a Cheque or a Bank Draft which I can then put in Escrow. Lets see what he says.

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  • Bob E.
    Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
    12y

    @Richard Gaston Maybe the check will come from Nigeria and be for an excess amount? Please just send the overage back to us......

    I would suggest looking for a decent portfolio lender and I think you will be able to get decent rates etc. There have been several threads on portfolio lenders but if you don't find one in your area start a new thread and you are likely to get several suggestions near you.

    Good luck and keep us posted on how things go.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Bob E. I finally was able to locate not only the person who sent me the email but the company. They are located in the UK, not Africa and the person who sent me the email is also listed as one of the Principals there, so far it is legit as far as I can see but I am still doing due diligence, got a friend there in the UK and asked him to see if its Legit, getting a birds eye so to speak, on the ground seeing I am getting info over the internet, and from what I have read there is nothing negative about them. I just can not see a company in the UK who does Investments, willing to send me $175K just because I asked for assistance at an Angel Investment site, mostly I was asking for was a business loan to help out with the business. It takes money to make money and I was going to use the money to finance my business with needed supplies, equipment and tools. But as I said above he offered to help on RE Deals so I just threw him a number, did not think I would get approved seeing my FICO score is 580, not that great but still a little borderline fair, but I am still working on it. Getting a lot of the negative reports knocked off my Credit Report seeing that they are really old.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    To everyone here, seeing I was at an Angel Investment site and put in an ad requesting a business loan, and he said he was an Angel Investor I just sent a PM to the admin's of the site to see if they are a legit Angel Investment Group and if they actually help people like me. Will know more when they send me an email back.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    Update: Still waiting on the email from the Angel Investors group, but I did get an email from the gentleman. He said he will send me a Bank Draft, I expected that seeing Cheques have the account numbers on them great for scammers to get ahold of so good safe bet, no Account numbers. Second he asked me for a copy of my ID which I have no problem (also expected it, no business worth its weight don't ask for an ID to prove that you're who you say you are), its suspended lol (Traffic fines, being paid on right now). IF he does send me a bank draft, I am going to play it safe, just in case, instead of putting it in my Bank Account I am going to create another Account, more like an Escrow Account after the bank checks it out then let it sit, to make sure its not a forgery. In the mean time I will be still checking it out, I am still dubious about it

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    Why not deal with known lenders?

    Yes, Dodd-rank applies regardless of where the lender is, jurisdiction is where the property is as to the consumer loan aspects, other parts pertaining to lender issues may not apply, to a point but that's not really at the level you're concerned with. :)

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  • Jeff Rabinowitz
    Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
    12y

    Your concerns seem legitimate but Dodd-Frank should not be one of them. D-F comes into play when a loan or installment sale is made to an owner occupant. In your case your business is asking for a loan from a lender. D-F does not apply to this transaction.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Bill Gulley I would love to deal with known lenders but with my credit score the way it is the only lenders I would be able to deal with are HML's and/or PML's. Seeing I was looking for a loan to help with the business I went to Angel Investors as a best bet option.

    @Jeff Rabinowitz I forgot about that seeing the Loan is for the business, what I do with the money whether I purchase a vehicle or a house is on me, and seeing its an out of country lender I don't think D-F Applies, only to the lenders here in the US, am I correct?

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    Well, the very name implies they won't rape you if they do make you a loan, but I can't ever be certain as to what is in a name.

    Might start working on the credit issues, getting that score up so you can join the real world of RE investing. Good luck. :)

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    My main concern though is this a scammer, I mean it's an answer to my prayers and all where I can get funding to help in my business endeavor. I can make the money to pay it back, did it before can do it again. Just needed someone to give me a bootstrap loan for a leg up. @Bob E. if there IS an EXCESS amount then that tells me this is not a legit deal, I will send the Bank Draft back and cancel the loan, I have heard of the bogus check scams where a person was expecting XAmount and got more then they were expecting whereas the person sending the check said "Oops, my mistake, just go ahead and cash the check and send us the excess amount and keep the rest? And it winds up costing the person a lot of money as well as hurting their credit status, because the check was bogus to begin with and the banks want their money back. Bank Drafts (just in case some of the younger people are looking confused, lol, they are Cashier Checks purchased from the bank directly. I had to say that because I work at a 7-Eleven and I hear it all the time about cigarettes, where the customer are asking for a pack of Marlburo Lights, the young cashier looks confused and trying to find a Pack of Cigarettes that says Marlburo Lights, when they are now Marlburo Gold. Sorry bad analogy but its about the same, A name what us older generation calls some items has now been changed to another name lol) are a little safer bet then a check, but not by much. When I take it to a bank, I am sure they can tell if its bogus or not. Banks are now using watermarks in their Cashier Checks which can not be forged, to insure safety to the persons buying (as well as recieving) them. And I am sorry if my posts are a tad long :) ok wordy. Like someone posted in here, Bigger Pockets, about PML's one needs to get to know them build trust etc, this person who says he is Angel Investor didn't get to know me (and Visa Versa) so yes I am concerned, very concerned. And on that note I am going to stop before I wind up writing a book, plus I am having problems breathing again (Allergies) and need to call my pharmacy to see if I can get a refill of my meds (Inhaler) so I will keep everyone up to date as it comes along if that is alright? Gawd I hate Allergies lol...

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Bill Gulley am working with a Credit Repair Counsler right now, there are some issues on my Credit Report I needed addressing, some open accounts I didn't open as well as a couple of Alias's that I have never used, heck I never used an Alias lol. I think they are from Debt Collectors who saw the almost same names applied them to me saying its one and the same person, which it isn't so now I have to take them off, but the good news is my Credit Score is climbing back up lol, it was 545 now my FICO Score is 580, getting better lol...

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    The best way to avoid trouble is not to deal at all with those you don't know and trust in lending. You may not be able just to send the money back, commercial loans may not have rights of recession and you could incur fees since they held up their end of the allocation, providing funds. Don't go further with those you doubt, it usually doesn't turn out well. :)

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  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    I guess I would be concerned about someone getting your name, address, SSN, and copy of ID. Just giving someone those alone is like giving someone money up front because a scammer can sell that information.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Dawn Anastasi I am always concerned about that, but we all give that info out even to lenders we know and trust. When we go to a Resturant we give our Debit/Credit Card to the waitress, and it's not unheard of when one of them gets the info and starts buying products online. Which costs us hundreds if not thousands of dollars. Look at the Hack job that happened at Target Stores recently where almost everyone that shopped there who used their Debit/Credit Cards wound up being comprimised. But we still give out the information, there has to be SOME trust, even to Bankers as well as Lenders. If there isn't a little trust none of us here would be in business very long.

    @Bill Gulley I will have to agree with you but then I won't be able to get any kind of business done, I don't know any Lenders personnally which would be nice if I did, if any Lender knew me they would know when I say I am going to do something I will do it unless something serious happens to which I will give them a heads up, my Landlord can vouch for that, been here for 13 years lol and I always have been good at paying my rent not only on time but seeing I split my rent in half, I even pay half of it early which makes it easier for me to support my family.

    But because of my concern, I did talk to my bank and they are willing to help if I do get a Bank Draft from the person, we are going to open a seperate Escrow Account and basically lock it up for 3 weeks or so, I can not touch it and this is by my request, the bank will also make sure its all good as well, they will investigate to make sure the Bank Draft is Legit as well as the company.

    I got an email from the Angel Investment Site and they also understood my concern, said even though they investigate most Investors it is hard to Investigate EVERYONE so they gave me a heads up to avoid being scammed, one of which the scammer asks for a payment upfront to pay on the Loan, sometimes up to 3 months. When a person makes the payment as per request, the scammer gets the money and the applicant don't get the loan, which results in the person losing a lot of money. So if I get a request for payment before I get the Loan then I know its a scam. A legit lender will not ask for payment in advance, unless its the normal payment that is associated with doing a business transaction, ie: Payment for doing credit checks, application fees etc, and normally they will take that out of the loan in advance before giving the loan. Nobody should have to pay to get a loan is what I was told. :)

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    12y

    You're either incredibly naive, irrationally desperate, or are just treating this as a game, Richard. No credible lender, foreign or otherwise, is simply going to send you a bank draft for you to use as you will because you filled out a loan application. This is not how real estate lending works. I have a feeling you know that, but hope deep down that it's untrue.

    For any legitimate deal, you will fill out loan documents and the lender will invasively check you and the property out. Depending upon your state, your escrow or closing attorney will receive detailed instructions from the lender about how they want their funds handled. Funding will be by wire transfer to a title company for disbursement. This will go toward the purchase along with your down payment, minus any closing fees. You will not personally receive these funds and any overage or error would be wired back to the originating bank account.

    If you have a real deal, and some experience, I'm sure a reputable hard money lender, local to you, would be happy to review it. By focusing on the asset, they would not normally be concerned about your credit. If you have a real deal and no experience, partnering is another option.

    I find it strange that you provided no info here about this property and seem to have no idea about the terms of the loan or how it will be secured. Don't you wonder? It's likely your "angel" will overfund this loan and ask you to remit the difference, or some variant thereof. How do you know "3 weeks or so" is long enough to clear an international draft. Please say your bank is smarter than this.

    Most importantly, you have strangely rationalized bizarre reasons to give your personal information out and could have already harmed yourself and your family. Many people were potentially subjected to identity theft from the Target debacle and many more are scammed each day by restaurant workers who steal credit card information that's willingly handed to them.

    We could get into the legal requirement lenders have to protect your personal information (which are strangely few, at least in CA) but neither Target nor any restaurant received social security numbers or the detailed personal information normally provided on a loan app. You really didn't give all of that out to someone who sent you an unsolicited email, did you?

    I'll continue reading this thread with interest since it appears to me to be a real-world, slow-motion illustration about how Nigerian-type scammers seduce seemingly astute victims -- something I've occasionally wondered about. For your sake, Richard, I really hope I'm wrong. On the other hand, this is such a weird thread, maybe you're scamming us :-)

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Jeff S. Nope not scamming, just a bit concerned, but I don't think he wants to deal with me, gave him an expired DL, ah well.

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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    @Jeff S. maybe you're right. Maybe I am too stupid to play with the big dogs, I should just go back to doing my 3D art and keep studying more and not do anything until I am ready, thank you for the clarity.

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  • Robert Louis Jones
    Homeowner · Chicago, IL · Member since 2014 · 14 posts · 2 votes
    12y

    Did a search and found out that they are a company don't know if they told you they were from Japan, I think you said they said they were from the UK so there's an eyebrow raiser and the name differs;  but they are real and have been in Bloomberg Business week, so go figure.

    Snapshot

    People

    Company Overview

    Phoenix Capital Co., Ltd. is a private equity firm which specializes in leveraged buyouts, management buyouts, turnarounds, mezzanine, and debt-equity swap investments. Phoenix Capital Co., Ltd. was established in January 21, 2002 and is based in Tokyo, Japan.

    9th Floor Kishimoto Building

    2-2-1 Marunouchi

    Chiyoda-ku

    Tokyo, 100-0005

    Japan

    Founded in 2002

    Phone:

    81 3 3215 3260

    Fax:

    81 3 3215 3261

    www.phoenixcapital.co.jp

    Key Executives For Phoenix Capital Co., Ltd.

    Mr. Toshihiko Mimura

    Chief Executive Officer


    Mr. Takashi Kojima

    Managing Director


    Mr. Nakajima Yamamura

    Communications Personnel


    Mr. Shigeru Hiraoka

    Corporate Auditor

    Age: 44 Mr. Katsuaki Takiguchi

    Corporate Auditor

    Age: 73

    Compensation as of Fiscal Year 2014.

    Similar Private Companies By Industry
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  • Richard Gaston
    OP
    Investor · Lakewood, WA · Member since 2014 · 119 posts · 8 votes
    12y

    I also did a search as well, must be another company. The one I was looking at is based in the UK and the name of one of the principal members is the same as the one that sent me an email. BUT in doing a complete search though I found out that someone is actually using the person's name and scamming people. The principal member of the business did not know about any loans being offered and is a bit miffed that someone is using his name as well as the name of the business to scam people into thinking they are getting loans, in order to get a loan from this scammer he asks that you send $300 USD to cover costs etc, then you don't see your money anymore nor do you get a loan. Quite a few people fell for the scheme. Just not me, I really wanted to make sure I wasn't being scammed so I did a really good search and found out the info. The funny thing is even though InterPol has been contacted about this person, he is still at it (the scammer).

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