Complete US Social Housing Bond 3-5 Yr. 14% Guaranteed
Real Estate Consultant · Brighton, MI · Member since 2013 · 607 posts · 251 votes
Complete US Social Housing Bond 3-5 Yr. 14% Guaranteed
Most Popular Reply
Dion DePaoliPro Member
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
@Annette Hibbler
Any misleading I may or may not have are derived from the material on the website of Colonial Capital. Anyone can follow this LINK to the website and bring up the brochure on the right side of the page and find what I found. In the brochure the specific example and language (text) is used.
It so happens I am fairly familiar with pooled investments. It also so happens I am familiar with pooled investment strategies that may qualify for tax exemption under Portfolio Tax Exemption law. It also so happens and related there to I have some understandings of requirements set forth by FINRA and SEC.
The first, a bond is a security. Securities require registration and license in order to be sold to the public. That is a US law. So the origin of the company does not create exemption from registering the company nor is exempt from requiring it's bonds be sold through a licensed professional. For you to sell a person into this program you would need a license issued by FINRA of Series 7 or higher. I am guessing you don't have one. I did look on FINRA and the company issuing is not registered. I will admit, my the post I assumed you don't a license since a licensed bond trader would not post what you did nor in the manner you did.
Now I hate to be a bit of a jerk, but you don't seem to know much of what you are talking about or doing regarding this solicitation nor your response to my post.
Any foreign investment, is subject to specific tax with holdings within the United States. The treaties, specifically define allowable investments but do not create any tax exemption. For UK, the withholding would be 30% for US sourced income. There are indeed ways for a UK investor to reclaim or credit withholding taxes paid, but again that is not the same as tax exempt and it is for the sake of taxation within their country not here in the US.
Further, a foreign investor raising funds from US residents where the money moves offshore (to the UK) and then back to the US (Chicago) where money is made is actually creating an excessive tax burden or at the least excessive tax administrative burden to obtain the proper tax rate for the US based investor.
The exact text from their material of "No need to register or pay US taxes" is not misleading it is completely and unconditionally wrong. It is hard for me to imagine a firm which could miss such a problem statement. Further, the same company has seemingly given you some type of initiative to offer this program for sale, a person with no license to actually sell.
If you follow the link you published, it has an astounding statement too:
"Properties purchased are refurbished to HUD standard. Typically, properties will increase in value by up to 150% once out of foreclosure and fully refurbished."
Really?? 150% appreciation??? That is a load of crap. I don't even want to address it further than that.
I also glanced at the example under "Property Example". Honestly, that entire post is a lie.
That property was foreclosed and reverted to JP Morgan Chase on 7/13/12. JP Morgan sold it to BLASHILL NICHOLAS and PATTERSON MICHAEL on 9/18/12 for $46,000. Those two guys, who doubled THEIR money sold it to REFLECTION PROP US LP on 11/16/12 for $94,500.
The website says this about the same property:
Purchased September 2012
Price $ 49,000
Refurb costs $19,000
Total Cost $ 68,000
Annual Rental Yield $ 32,400 (49%)
Sold October 2012 $103,000
It appears that not one bit of information in the website post, which is supposed to be a live example of this Colonial Capital investment strategy is true in even the remote sense. I will give them credit, they got close on the purchase price but were still off by 7%.
Well, I think this speaks to the other points I have already made. This firm is a complete scam. You seem to be blindly supporting them, likely under the idea that somehow from all of this you get paid. I can understand perhaps they have duped you into believing the story and sales pitch.
At this point, anyone can duplicate what I have done in research and verify the information. Clearly, I have actually put the time in to disprove the post and back up my original statements. I recommend you do the same and get yourself out of harm's way before it shows up at your door. If you "sell" this program to someone and they are harmed financially, that can and likely will implicate you into the scheme. That said, I am not giving you any legal advise, do as you wish. I would touch this investment with a pole that could reach the UK if I had one.
Good Luck.
38 Replies
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
Are these "Mark to Market" HUD deals ? Is it an IDB tax deferred? I'm a tad leery of English banking after the LIBOR matter. :)
- 12yDion DePaoliPro MemberReal Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
This has scam written all over it.
Colonial Capital does not appear to be a FINRA member firm. I am guessing the OP is not a licensed broker either. Also investment programs which use the word "guarantee" are pretty huge red flags as any SEC/FINRA attorney in the world is going to say, never use that word.
The post wants to imply this is a HUD sanction program, but it is not. The rental income in majority is hoped to come from section 8 housing. The investment process fails to give notice for an investment prospectus, it says fill out a form and send your money, not a good sign. It asks for wire to be sent overseas, not a good sign.
The program example given in the material on CC website:
Purchase Price = $35,000 Duplex
Rehab Cost = $30,000
Gross Rent = $26,364 (seems high)
The document then refers to this idea of Gross Rents divided by Total Cost so ($26,364 / $65,000) to equal an "unleveraged yield" of 40%. Sounds fantastic but there is no mention of vacancy or expenses. A bit misleading.
Further, the information then supposes the same property can simply be sold for $100,000 which will produce a similar "unleveraged yield" of 26.4%. So, sale price, less cost ($100,000 - $65,000) is $35,000 (that is 53.8%). It doesn't mention what happens with the other $17,000 to reduce the ROI down to 26.4%. Granted some of it must be for closing costs but details are missing.
The same ideas applied here get scaled up for a triplex with 1- 2 bed and 2- 3 beds only the numbers are described as "even better". Well yea, money free of expense is always better when you get more.
Further the bond program calls for an investment then remittance on the bond is semi-annual. First payment is six months after issue. So that seems to suppose the purchase and rehab will occur almost simultaneously. Far from reality, a vacant property gives no income. A property under construction has not tenants.
The next set of stuff is really AWESOME and I quote all of the following:
a) "No need to register or pay US Taxes"
- yea, my mouth dropped too when I read that. They actually typed in in their pamphlet.
b)"Secure alternative investment managed by one of the largest title insurance companies in the US"
- when did title insurance companies get in the business of securities and property management??
c) "No worries about maintenance or refurbishment issues"
- well, yea, cause they are not doing them
@Annette HibblerI realize you are not the creator of this program but you seem to be promoting it. Let me not mix words. Stop what you are doing with this is complete garbage and fraudulent scam. You are going to get yourself is some serious problems one of which could be conspiracy on wire fraud or alike. This firm has disguised ripping investors off into some crazy real estate investment scheme which any real estate investor that spends 5 seconds looking at it will tear it apart. When the house of cards comes down, hopefully you are not in or around it.
- Real Estate Consultant · Brighton, MI · Member since 2013 · 607 posts · 251 votes12y
Hi Dion.
Thank you for your response.
There seems to be some misunderstandings here on how the Investment Bond Works. In simple terms its a pooled investment in property. The total rents received by the investment plus any property sales is what guarantees the return of 14%. Trying to calculate each property in the bond doesn't work as you have tried to do.
Secondly this is a UK company selling this bond and they are regulated by the UK Financial Authorities to allow this investment to be held in a UK Pension. There are very strict guidelines for funds held in a UK Pension.
All rehab is completed by the company and Section 8 approved, tenanted and property managed. Therefore, the investor doesn't have to deal with any of it. You can view the "investment strategy". Perhaps, you should take some more time to carefully review every piece of information before jumping to false accusations. We'd be happy to address your concerns and find out more information for any investor.
The comment about no need to pay US taxes is misleading, I agree and we need to clarify this on our website. It is referring to UK investors. As you may or may not know there is a Tax Treaty between the UK and USA so that if taxes are paid in one country they do not have to be paid in the other. However, for USA based investors, clearly they need to pay tax otherwise they would be breaking the law.
I hope this helps with your concerns.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes12y
Annette, see if you can clarify something please.
Under the MPI, Guaranteed 14% Returns tab that your link leads to, it shows exactly one property example: 2158 South Millard with the following info
Purchased Sep 2012 $49,000
Refurbish costs $19,000
Total Costs $68,000
Sold October 2012 $103,000
This implies a "profit" of $35,000 to MPI/Colonial I presume?
2158 South Millard-Deed transfer History as per Cook County Recorder
09-18-12 $46,000 JP Morgan TO Nicholas Blashill and Michael Patterson
11-16-12 $94,500 Nicholas Blashill and Michael Patterson TO Reflection Properties US LP
Note: Reflection Property US LP is based out of Canada
Question: Exactly where is MPI/Colonial and their profit with this property?
Is Reflection Property US LP part of, or associated with MPI?
- 12yDion DePaoliPro MemberReal Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
@Annette Hibbler
Any misleading I may or may not have are derived from the material on the website of Colonial Capital. Anyone can follow this LINK to the website and bring up the brochure on the right side of the page and find what I found. In the brochure the specific example and language (text) is used.
It so happens I am fairly familiar with pooled investments. It also so happens I am familiar with pooled investment strategies that may qualify for tax exemption under Portfolio Tax Exemption law. It also so happens and related there to I have some understandings of requirements set forth by FINRA and SEC.
The first, a bond is a security. Securities require registration and license in order to be sold to the public. That is a US law. So the origin of the company does not create exemption from registering the company nor is exempt from requiring it's bonds be sold through a licensed professional. For you to sell a person into this program you would need a license issued by FINRA of Series 7 or higher. I am guessing you don't have one. I did look on FINRA and the company issuing is not registered. I will admit, my the post I assumed you don't a license since a licensed bond trader would not post what you did nor in the manner you did.
Now I hate to be a bit of a jerk, but you don't seem to know much of what you are talking about or doing regarding this solicitation nor your response to my post.
Any foreign investment, is subject to specific tax with holdings within the United States. The treaties, specifically define allowable investments but do not create any tax exemption. For UK, the withholding would be 30% for US sourced income. There are indeed ways for a UK investor to reclaim or credit withholding taxes paid, but again that is not the same as tax exempt and it is for the sake of taxation within their country not here in the US.
Further, a foreign investor raising funds from US residents where the money moves offshore (to the UK) and then back to the US (Chicago) where money is made is actually creating an excessive tax burden or at the least excessive tax administrative burden to obtain the proper tax rate for the US based investor.
The exact text from their material of "No need to register or pay US taxes" is not misleading it is completely and unconditionally wrong. It is hard for me to imagine a firm which could miss such a problem statement. Further, the same company has seemingly given you some type of initiative to offer this program for sale, a person with no license to actually sell.
If you follow the link you published, it has an astounding statement too:
"Properties purchased are refurbished to HUD standard. Typically, properties will increase in value by up to 150% once out of foreclosure and fully refurbished."
Really?? 150% appreciation??? That is a load of crap. I don't even want to address it further than that.
I also glanced at the example under "Property Example". Honestly, that entire post is a lie.
That property was foreclosed and reverted to JP Morgan Chase on 7/13/12. JP Morgan sold it to BLASHILL NICHOLAS and PATTERSON MICHAEL on 9/18/12 for $46,000. Those two guys, who doubled THEIR money sold it to REFLECTION PROP US LP on 11/16/12 for $94,500.
The website says this about the same property:
Purchased September 2012
Price $ 49,000
Refurb costs $19,000
Total Cost $ 68,000
Annual Rental Yield $ 32,400 (49%)
Sold October 2012 $103,000It appears that not one bit of information in the website post, which is supposed to be a live example of this Colonial Capital investment strategy is true in even the remote sense. I will give them credit, they got close on the purchase price but were still off by 7%.
Well, I think this speaks to the other points I have already made. This firm is a complete scam. You seem to be blindly supporting them, likely under the idea that somehow from all of this you get paid. I can understand perhaps they have duped you into believing the story and sales pitch.
At this point, anyone can duplicate what I have done in research and verify the information. Clearly, I have actually put the time in to disprove the post and back up my original statements. I recommend you do the same and get yourself out of harm's way before it shows up at your door. If you "sell" this program to someone and they are harmed financially, that can and likely will implicate you into the scheme. That said, I am not giving you any legal advise, do as you wish. I would touch this investment with a pole that could reach the UK if I had one.
Good Luck. - 12yDion DePaoliPro MemberReal Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
@Wayne Brooks ... you beat me!!!
I'm not sure why the bonds are being offered on this site, the disclaimer on their site is pretty clear…
"This offer of investment originates outside the USA and is being made under regulation "s" of the securities act 1933. The bonds have not been registered under the US securities Act 1933 and may not be offered or sold or resold in the United States or to any US residents."
I know this company very well and I don't believe there is any scam involved. I've completed about 8 properties for them in the past 6 weeks. What they do with the properties after I hand them over is none of my concern. I can tell you that every project I've been involved with has been sold to an investor overseas.
On a side note, I have been offering a very similar business model to my local investors for years. Buy a property, rehab it (new hvac, appliances, cosmetic, etc..), rent it, put a management company in place and then use the necessary formula (75% of rent) to calculate the price of the property in order to give the investor a 14% ROI. The other 25% is put towards management fees, taxes, vacancy rate, misc repairs).
- 12yRoy N.Pro MemberRental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
This reminds me a bit of League Investment Services / League Financial Partners ... a duo behind a web of interrelated companies who finally got their comeuppance this autumn after making similar solicitations to grandmothers and grandfathers across Canada for 5(ish) years. When you scratched deeper then the glossy brochures, the looked more and more like a ponzi scheme - new unit sales were funding the published returns to existing holders. Finally the security regulators woke-up and took notice.
In the end, a lot of people to whom such an enterprise should never have been sold were hurt and lost monies they could not afford to loose. One of the duo has gone missing and the other has gone silent.
@Roy N. I'm not connecting the dots. This company uses their own funds to purchase and they use their own funds to rehab. Their all in budget is $80k for a 2 flat. After they get the building tenanted (section 8) they sell the property to an investor in China, the Middle East, etc…for an average of $110k-$130k. That's pretty straightforward.
I honestly don't know where the disconnect is here. I'm not pushing anyone to buy their bonds because that's illegal for me (or anyone else in the US) to do. However, I won't sit back and let their name get drug through the mud, I've worked closely with them and have seen the profits they make in order to get their bond holders their return.
- Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes12y
@Mike B. @Dion DePaoli and @Wayne Brooks outline a number of very specific issues with this offering. If you don't want their name drug through the mud you should tell them to clean up their materials. They have made their own mudhole.
@Jon Holdman I believe most if not all of the issues are with the MPI site offering bonds in their name, guarantees, etc... It clearly says on the Colonial Capital site that they will not sell said bonds to a US resident and they make no mention of the MPI "guarantees". All I'm saying is one has to be separated from the other.
- 12yRoy N.Pro MemberRental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
Originally posted by @Mike B.:
@Roy N. I'm not connecting the dots. This company uses their own funds to purchase and they use their own funds to rehab. Their all in budget is $80k for a 2 flat. After they get the building tenanted (section 8) they sell the property to an investor in China, the Middle East, etc…for an average of $110k-$130k. That's pretty straightforward.
I honestly don't know where the disconnect is here. I'm not pushing anyone to buy their bonds because that's illegal for me (or anyone else in the US) to do. However, I won't sit back and let their name get drug through the mud, I've worked closely with them and have seen the profits they make in order to get their bond holders their return.Mike,
Dion & Wayne nailed it in their responses. The link provided at the top of this thread is selling this 14% guaranteed return "bond" - they are not registered. The information and example provided do not align with a quick check made to external sources.
If Colonial Capital is on the up-and-up, one would have to presume they are unaware of the above solicitation and the referenced marketing material.
Since you have an existing relationship with them, perhaps you should make them aware of this thread and invite them to come and clear the air?
@Roy N. I don't want anyone confused on my stance on this. What I'm saying is this MPI company and Colonial Capital are two different companies. The link goes to the MPI site.
The disclaimer that I copy and pasted (below)
"This offer of investment originates outside the USA and is being made under regulation "s" of the securities act 1933. The bonds have not been registered under the US securities Act 1933 and may not be offered or sold or resold in the United States or to any US residents."
was taken directly off of the Colonial Capital site. They do not solicit buyers in the US. period.
Everyone's analysis regarding MPI seems to be dead on. That was never my issue.
If the opportunity presents itself I will bring this up to them. However I'm not going to call my multi million dollar hedge fund client and tell them they need to come on an internet message board and defend themselves.
- 12yDion DePaoliPro MemberReal Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
I understand your point about them being two separate companies. After coming back and reviewing further I see the two links provided by OP are for MPI.
I did however, pull the brochure from Colonial and commented on that. However, I also note, that I had read MPI's landing page and kept that in mind which implies it is a US based affiliate of Colonial which made all of the Colonial commentary problematic. Colonial with no US based business would not have the same problems with statements.
Example, a UK company telling a UK investor No US Tax would fall under Portfolio Tax Exemption in US so it actually would be proper, subject to UK tax laws which I don't know. So, put my torch down for Colonial but they should address this MPI relation.
I suppose, what you can do is let your friends at Colonial know, they just went through the mud because of this MPI which has copied text from their site, uses their logo and brochure.That said, @Annette Hibbler who the heck is MPI what is your affiliation with them and why does it now seem you are using Colonials program with what seems to be no permission. I see you have 183 posts here on BP and I don't believe you have posted something like this before. So I would suggest you clear the air about your affiliation with MPI too so you don't loose integrity here on BP. If you were sold a bag of goods by MPI, it is what it is, you are not the first nor the last person to suffer such fate. It does make the manner in which you attempted to defend my commentary a bit misplaced but that can be just a mistake. It would seem though, a logical next move is also to disassociate yourself from the MPI company so if the ship burns you don't go down with it.
- 12yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
All the analysis, especially by @Dion DePaoli , is very enlightening and thorough. I use a much simpler analysis though: if I need to go through a foreign company to invest in U.S. property, it's probably a scam!
- Real Estate Consultant · Brighton, MI · Member since 2013 · 607 posts · 251 votes12y
To ALL BIGGER POCKET INVESTORS:
My name is Richard Hibbler and I am the CEO of MPI Group.
I have asked Annette if I may respond to this post directly.
It’s interesting to see that most of the postings on the 14% Investment Bond seem to be by one or two individuals who seem to have nothing better to do with their time than to accuse MPI Group of running a scam. They have no evidence to back this claim up, of course. To have evidence and then accuse is one thing but to make up a whole concoction of slanderous statements based on what Dion and fellow cohorts think is entirely another matter.
Let me put a couple of things straight.
MPI sells Internationally. We are a USA based company and have our own representatives in the UK. We attend property shows in Europe promoting and selling US properties. Our Portfolio Range has been put together to widen the investment opportunities for our clients wishing to invest in the US property market. We have done this by partnering up with a number of UK and other European companies by becoming affiliated with them. WE ARE AN AFFILIATE OF COLONIAL CAPITAL having signed up with COLONIAL CAPITAL UK to promote their investment bond to our investors worldwide.
On our website we publish material from Colonial, it’s their facts and figures not ours and we have never tried to say otherwise. Their name is on the material not ours! As an affiliate, money invested with Colonial by one of our clients does not touch our hands it goes straight to Colonial. We believe this bond is a very good deal for investors and it’s offered by a reputable company. Thats why we got involved.
This particular bond we have verified with Colonial today, is not available to US citizens. That was a miscommunication between us and Colonial. We put our hands up and say yes we messed up by indicating it was available to US investors. Investors worldwide can invest in it but not if they are US citizens. It will be put right on our website.
It’s a shame Dion didn’t have the diplomacy to private message us so we could have avoided this situation, however, I am aware that there are lots of people who like their one minute of fame and who like to shoot first and ask questions later.
Its a real shame that Dion didn’t simply ask some questions directly to us rather than immediately jump on MPI and accuse us of running a scam. I have to question his motive behind this approach. We at MPI Group aim to be open and transparent in everything we do, we listen to suggestions, answer questions and will admit when we get it wrong.
We invite potential investors to come and meet us and many have and I have spoken to many Biggerpocket investors personally on the phone. I put my name behind everything MPI does. People can see who I am, can look me up on the internet, I publish my phone number and email on the MPI site so anyone may contact me.
It seems Dion on the other hand approaches things very differently. I’ve checked out Dion’s company website. He is meant to be CEO, however, I could not find his name anywhere on the site or phone numbers to call. MPI attempts to put everything out there in the open.
I invite anyone on Biggerpockets to contact me personally regarding this or about any other issues or questions you have have regarding MPI Group.
Richard Hibbler CEO MPI Group
USA +1 908 399 7039
UK +44 20 8144 0522
- 12yDion DePaoliPro MemberReal Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votesReally? That is the response?
Let me get this straight...
- "WE ARE AN AFFILIATE OF COLONIAL CAPITAL having signed up with COLONIAL CAPITAL UK to promote their investment bond to our investors worldwide."
- "As an affiliate, money invested with Colonial by one of our clients does not touch our hands it goes straight to Colonial. We believe this bond is a very good deal for investors and it's offered by a reputable company. Thats why we got involved.
- "This particular bond we have verified with Colonial today, is not available to US citizens. That was a miscommunication between us and Colonial.
So, you became an affiliation of said company to promote something which they are not and you can not legally be promoting in the US?? (It makes sense now)
The post is in the BP Marketplace and is frankly subject to public scrutiny and I would say suggesting that a security can be sold when one does not possess such licensing requirements is a fairly big deal and does more of a public good for the BP Nation, who I clearly care more about than the CEO of a company advocating such things and who defends his company through a third party post once a questionable act has occurred.
Further, I am sorry I pointed out that thing that got in your way. Those bothersome securities laws, always getting in the way while protecting the public. But...who is splitting hairs?
Then, somehow I am the bad guy. Annette, you know the rules for the marketplace and if you don't, you can go read them.
As to the implied accusation that I don't have an affiliation with my company, which I started and own and operate I guess is a public opinion fate I am more than happy to suffer through. It could be tough and quite laughable, but I think I will make it. I am here on BP with 1,300+ posts which can speak for themselves open for scrutiny not through third party and in front of my colleagues, followers and peers. I didn't get the memo that required me to put my name on my company website, I only like to be vain in the mirror not the web.
If me pointing out a very well known violation of securities laws is considered me seeking some limelight than "yes", I am in the light buddy! Here I am. If you want to scam people in some private message internet space, then I suppose you should go find that space on your own as it does not appear to be in a public forum here on BP.
I will admit though, he closed well...we opened with being affiliated to offer the investment, moved to being "misinformed" and he can't offer the investment (aside from FINRA/SEC standards) and closes with "this is a legit thing we actually do".
Well played sir, well played.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes12y
Annette, I know very little about the security laws here, but can you have Richard explain how the sample property transactions above, which was the sole sample on MPI's website, relates to Colonial Capital's operation?
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes12y
So, I bet these are not HUD "Mark to Market" projects then. @John Cory ! :)
- 12yRoy N.Pro MemberRental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
Originally posted by @Annette Hibbler:
To ALL BIGGER POCKET INVESTORS:
The evidence was the information posted to BiggerPockets by Annette Hibbler and the related content presented on the MPI website which was linked from that post. The resulting scrutiny levelled by Dion DePaoli and and others was based upon the information provided. There was no slander. If you feel the conclusions were incorrect, then updating your marketing information to address the matters raised here and dispel any ambiguity would be a productive response.
Are you certain this is correct? I looked for the registration of this bond for sale in Canada and did not find it. This could easily be an oversight on my part, would you be able to provide the registration information? Additionally, after reading the prospectus information on the Colonial website, I suspect, if this bond can be sold in Canada, it might well be restricted to Accredited Investors only, which, in-turn, but limitations on how and to whom, such a product can be marketed.
The Marketplace Forum rules are absolutely clear that you should expect public scrutiny and criticism of materials posted here. This separates the legitimate opportunities from those which are problematic and is part of what makes Bigger Pockets work. It's a real shame you want exposure to the Bigger Pockets community, but are unwilling to abide by its code of conduct.
The rest of the ad hominem attack on Dion DePaoli did not contribute to answering the questions raised or clearing the air and showed a distinct lack of class on your part.
- 12yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
I guess I will jump in! This post as well as some previous posts by @Annette Hibbler follow a very similar pattern. Annette makes a self serving statement about the value of something she is offering for sale (last time it was Detroit property, this time bonds), offers biased one sided information to support the value of her offer. Numerous BP members post questioning the validity of her information/conclusions and offering there own opinions. Annette then proceeds to get into heated exchanges with these posters indicating that the posters know not of what they speak. Now, we go a step further. Annette's husband appears as a "guest" poster, personally attacking the motivation, character and knowledge of one of the posters (@Dion DePaoli ).
Lets look at some VERY important points
1- Mistakenly believing you can sell a security to US investors without the security being registered and without your being licensed shows such a major lack of knowledge that MPI's ability to analyze this investment opportunity is suspect at best.
2- @Dion DePaoli 's assessment is based on his superior knowledge and experience in his specialized field, a knowledge and experience evident to all to be much greater then the op's.
3- The personal attack on Dion is totally uncalled for and inappropriate. If you want to dispute the allegations fine, attacking the poster shows desperation when the facts are not on your side
4- BP is an open forum, members and posters are encouraged to respond in the public forum, not through private messages.
As Harry Truman once said - "If you can't stand the heat, get out of the kitchen"
- Real Estate Consultant · Brighton, MI · Member since 2013 · 607 posts · 251 votes12y
@Don Konipol Your attempts of character assassinations fall on mute ears to the many BPers whom we have spoken to over the phone and/or met personally. I'm sorry to see that what could have indeed been an informative discussion has so quickly deteriorated into an all out verbal brawl based on innuendo and flat out lies.
I have always acted with honesty and yes, sometimes a great deal of patience is required here on BP. My answers are not "heated exchanges" in the least but rather a concerted effort to "clear the air", provide informative responses and keep the lines of communication open. My BP followers know and understand this about me.
The slander was in Mr. DePaoli's opening line in reply to my post "this has scam written all over it". Clearly, setting the tone and declaring his judge and jury verdict without even attempting to ask us or communicate with us regarding his concerns here in the forum. Mr. DePaoli has a good deal of knowledge but having come out of the gate shooting, discredits him and detracts from some of his valid questions.
I understand full well that BP is an open forum however, some modem of decorum often seems to be lacking by certain individuals who do not like or understand what they are reading. I never resort to calling anyone a liar, thief or scammer nor have I ever accused anyone here on BP of fraud. My record is clean and stands firm.
Richard's invitation is open to all and still stands. He provides his contact information for anyone sincerely interested in a constructive discussion. That in itself speaks of MPI's openness and transparency. I understand that the real estate investment business is full of risks and yes, there are many unscrupulous people out there. We prefer face to face or telephone conversations rather than hiding behind a screen.
We are an INTERNATIONAL company with many clients in Europe, Asia and Australasia. We are acting as affiliates for Colonial Capital. We do not own any of Colonial Capitals assets nor do we profit from them. As affiliates we make an agreed referral fee, full stop.
@Roy N. As I understand it, USA is the only exemption. However, I will inquire on your behalf and ask if there are any other countries excluded including Canada. Clearly, there will be other countries that may indeed be included in this exclusion (i.e. North Korea, Iran, etc.).
@Wayne Brooks Wayne I'd be happy to find out as much information for you regarding the example property you referred to. I have a call into Colonial Capital and will ask for additional info and pass it along to you shortly.
- Real Estate Investor · Chicago, IL · Member since 2011 · 139 posts · 101 votes12y
Though I will yield to the experts on BP on the specific laws, here are my general thoughts...
It appears that you and your company are doing very well in building your turn-key business in Detroit. It is obvious from your posts that you have mastered the art of marketing and it appears you have created a pretty healthy international buyer list (Detroit is not my cup of tea but I can recognize the appeal for some buyers).
With that said, why in the world would you even risk affiliating your company and brand with a company unless you are 100% confident that what AND how they are seeking investors is 100% legal? I realize you did not develop the marketing materials or the program, but by linking your name you are basically telling both your investors and the world through these public forums that you approve and are confident in the program. You and Richard may be the nicest most honest individuals in the world, but IF investors get burned from this program, my guess is you will be getting calls from both lawyers and regulators.
To me, it seems really silly to open yourself up to reputation and legal risks just to earn a small referral fee...but in the end that is your decision...
"We are an INTERNATIONAL company with many clients in Europe, Asia and Australasia. We are acting as affiliates for Colonial Capital. We do not own any of Colonial Capitals assets nor do we profit from them. As affiliates we make an agreed referral fee, full stop."
I think Annette is being overly harsh and defensive with regard to Dion's comments. The original post set red flags for me as well. Why? Several reasons:
The title, "Complete US Social Housing Bond 3-5 Yr. 14% Guaranteed" combines US, Bond and Guaranteed is such a way as to lead one to think that this is a US government guaranteed bond. Anyone who knows the bond market knows that there's no such thing as a bond that yields 14% that's guaranteed by the US. Yields that high are well into junk bond territory.
Then there's the notion of "guaranteed". Guaranteed by whom? Is there some sort of credit default swap arrangement? No? So how is the promised 14% return guaranteed in the event the borrower's investments underperform expectations? What backstops the investor against excessive expenses or dare I say it, corporate malfeasance?
As best I can tell, there is no guarantee that means anything. There's just the word "guaranteed" used three times in the original post to promote the 14% return.
Reading further in Colonial Capital's brochure (clearly not a legal prospectus) they state:
- No currency risk to investors. Funds can be
invested in Sterling, US Dollars, Euros Yen or
Yuan.
• Interest and redemption payments paid in
original currency invested.How can Colonial Capital guarantee a 14% return when they are absorbing all currency risk for the investor? If over the next 3-5 years the dollar depreciates significantly versus the Pound Sterling, Euro, Yen or Yuan, Colonial Capital will have to pay back more than 14% on a US Dollar basis. How does Colonial Capital plan to deal with that unknown currency risk? Do they purchase currency swaps for each non-dollar demoninated investment? I doubt it.
Yet you "guarantee" the investor will get their money back. Suppose the US continues printing money and the dollar drops 50% versus the other-than-US-Dollar invested currency. Will Colonial Capital be able to return 28% per annum, AND $32,000 at the end of the 3-5 year period (versus the stated 14% and $16,000 amounted when using the US Dollar as the investment currency)? That's what would be required to fulfill the promise in their brochure.
Just the fact that someone is pitching a bond on here without realizing that they are doing it in a manner contrary to the highly regulated and structured way in which that is done should raise a red flag for any reader or potential investor. The original post raises red flags and a detailed reading of Colonial Capital's brochure raises more.
Annette, if you're going to pitch this type of thing here, don't be surprised when someone gets a bat on it and hits it back hard. And when Dion's average post is informative, detailed and clearly the product of in-depth understanding of the subject matter, and yours are usually self-serving rah-rah sales BS don't be shocked when you're called out on it.
- No currency risk to investors. Funds can be
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes12y
Hi Annette,
I am not seeing any character assassinations here. I do see how maybe the posts can be a little less rough around the edges.
I think using the word scam when there is not absolute 100% certainty is strong. Misleading and overpromising maybe in what material is presented.
I can tell you from my experience there is a ton of fraud in investing capital and also lenders doing loans. Often times where money transfers out of the country you never see it again. The U.S. simply doesn't have the resources to go after international companies and peel back the layers.
Anytime someone is scrutinizing a product the offering party should WELCOME with open arms that scrutiny. The reason is because they are saying this sounds somewhat interesting now I want to drill down on the facts to see if it might be for me or understand it better.
If someone comes to me to invest 500k or 1 million cash and buy commercial property I do not get agitated at the questions and detail level required. I expect them to do that and be very detailed and research oriented before making a move. In my experience when people get agitated at asking questions that is offering the product that should be a red flag to the investor. That means that even if the product is legitimate the process might be very painful to go through with the offering party.
For instance if it takes an act of congress to get an LOI and basic financials on a commercial deal then does my buyer want to go through that whole brain damage to closing? The odds are the seller will be very difficult to deal with I think we need to get away from the emotional content of the posts here and stick to the facts and questions.
