DO NOT INVEST with SCOTT CARSON (We Close Notes) or Inverse Asset

Gerry Cohen · 2019-08-06T19:35:09-07:00

I have been reluctant to broadcast this information to the note investment community, hoping not to "hang out my dirty laundry" with colleagues or the note investment community. However, it is time to speak out and address this reckless and unethical behavior of SCOTT CARSON! It must be STOPPED! After attending SCOTT CARSON's (We Close Notes) seminars, Master Mind programs, and listening to his podcasts, I decided to invest as a passive investor (joint venture partner) with SCOTT CARSON (Inverse Asset Fund) to acquire a number of defaulted real estate notes. SCOTT CARSON and (Inverse Asset Fund) acting as the lead investment manager to secure the notes and properly disposition. Not so dissimilar from most note joint ventures agreements. Once funds transferred the joint venture immediately transformed into a bad movie! SCOTT CARSON never followed up, never shared information on the status of the investment (notes) nor paid out interest income per the agreement. After more than 24 months, following the terms of the agreement I gave SCOTT CARSON (Inverse Asset Fund) the appropriate notice to dissolve the joint venture, return principal and interest owed to me. I am still waiting for proper disposition and return of principal. Naively, I thought SCOTT CARSON (Inverse Asset Fund) would do the "right thing" and meet his obligation if treated like a professional. No such luck! After several attempts to address this obligation directly through legal counsel, I instructed my attorney to secure a judgment against SCOTT CARSON and Inverse Asset Fund, If you take the time to research Travis County, Texas county records you should see my approved judgement as well as other judgments awarded to other passive investors. This is not how the "note investment business" works! In closing DO NOT INVEST with SCOTT CARSON (We Close Notes) and Inverse Asset Fund.

Michele Orgel

Rental Property Investor · Seattle, WA · Member since 2011 · 3 posts · 9 votes

7y

@Jay Hinrichs I believe you seriously need to go back and re-read every word of my post. I am a professional, and successful, Real Estate Investor. At no time did I say that any investment in Real Estate would come with a money back guarantee. If you are given a personal guarantee, that is different. I'm a pro. You win and you lose in this game. But if you play by the rules, you don't lose to crooks. Look in to the criminal who we are all talking about. My post speaks for itself.

1 Reply

Jay HinrichsBusiness Member

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

7y

Originally posted by @Michele Orgel:

@Jay Hinrichs I believe you seriously need to go back and re-read every word of my post. I am a professional, and successful, Real Estate Investor. At no time did I say that any investment in Real Estate would come with a money back guarantee. If you are given a personal guarantee, that is different. I'm a pro. You win and you lose in this game. But if you play by the rules, you don't lose to crooks. Look in to the criminal who we are all talking about. My post speaks for itself.

U left out the PG aspect .. that makes a huge difference most of the PPM's I see have clear language that says its risky and you can lose all your money.. Fraud theft conversion not withstanding..

my main point Is the NPN space is a high risk niche.. you would not get those kind of returns if it was not.. so one would expect some bumps in the road.. but if this guy flat stole your money.. then OK I get that one.. its happened to me over the years.

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Bob Malecki

Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes

7y

@Jay Hinrichs Jay, Scott did not do a fund with PPM, these are one-on-one JV deals as best that I've read.

0 Reply

Bob Malecki

Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes

7y

@Michele Orgel you may want to contact the Texas attorney general and see what recourse you have aside from spending your money to sue.

Bob

2 Reply

Jay HinrichsBusiness Member

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

7y

Originally posted by @Bob Malecki:

@Jay Hinrichs Jay, Scott did not do a fund with PPM, these are one-on-one JV deals as best that I've read.

Bob, Devil is in the details.. I see.. I guess one would have to dive into the summons and complaints to see exactly what was alledged and then subsequently ruled on ( in favor of plaintiff).. Out of curiosity JV ing on a note like multiple bene's ? like we do in CA.. I know some states thats illegal without a securities offering ( Oregon being one I got hammered personally on that one LOL)

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Matt Skog

Minneapolis, MN · Member since 2016 · 60 posts · 18 votes

7y

As I have come to know from a great teacher of free material: @DanZitofsky Trust, but *verify*.

I see far too many Note Investors, veteran and newbie alike, who are willing to be taken simply by not verifying what is being portrayed as Gospel.

1 Reply

Dan Zitofsky

Real Estate Coach · DE · Member since 2013 · 64 posts · 85 votes

7y

@Matt Skog thanks for the mention even though it makes me sick to my stomach to see this. I like others work my butt off for my money and the investors who work with me. I’d hate this to give us a bad name. One thing I take more serious then my own money is any money others invest with me and the reason you don’t see me raising funds for deals like this.

The fact here is it was more than taking a risk with a deal. It was taking money with the wrong Intention.

I usually don’t post much here at all as I have a pretty strong network of investors and students and don’t want to be clumped with a bunch of new investors being Taught to raise money incorrectly.

I’m so sorry to read this. Hope it doesn’t sour everyone from chasing their vision. Once again I’ll always say do your due diligence and trust but verify.

12 Reply

Beth Hale

Specialist · Denver, CO · Member since 2017 · 14 posts · 50 votes

7y

Originally posted by @Martin Saenz:

Originally posted by @Alpesh Parmar:

Originally posted by @Martin Saenz:

Originally posted by @Alpesh Parmar:

@Gerry Cohen thanks Gerry and others for sharing your experiences. When I was starting out, I was going to attend his mastermind but then I attended Eddie Speed's and I wasn't impressed either. All of these guys want to make money from courses, workshops, coaching, JV investors and investors trying to buy assets from them. It's like they have nothing to lose - it's only win-win for them.

I'm pretty much staying out of the conversation as I have never had a dealing with Scott and can't speak from experience. My heart goes out to those affected by a bad encounter I must say. I would only mention that in fairness to Note School, Eddie Speed's program may not be for everyone, however he and his team have done a tremendous service to the note industry over the years. They lobby on Capital Hill, etc on behalf of all us note investors for one. I want to give credit were credit is due and know that Eddie and his team do care about maintaining standards in the space whether or not their system is a fit.

You have been in note industry so you must be right @ his contributions. I haven't done business with Eddie so can't say anything but the one full-day workshop I attended was up-selling of 3-day workshop and note school conference. I was immediately put off by the up-selling.

Appreciate you, Alpesh. I took a 3 day Note School workshop when I first started in 2013 and I understand there is up selling. Moving further into their program was not a fit for me at the time however it gave me my launching pad in the industry. They run a big operation and need to feed that system accordingly. With that said, my impression of Eddie (and what I hear from many others in the industry) is that he truly cares about upholding standards within the space, and I believe that strongly with his team too. I just don't want him lumped into a ethics thread involving someone different (as they are different people running different operations). That's just my two cents, sir.

I agree with you regarding Eddie Speed. I am proud to say that I got my training in the business from being a Note School student, and he is part of the Seller Finance Coalition lobbying on capital hill on behalf of seller finance and the investors like us who make this part of our business model.

I would also say that Eddie Speed and the folks at Note School keep their material fresh, and appropriate for today's market conditions, which have seen changes in the last few years.

I would also agree with you for saying that Eddie Speed tries to maintain integrity in his dealings. I feel the same way.

I think we should be slow to paint everybody teaching notes with the same brush. I suspect Scott Carson has more in common with Bernie Madoff than he does with Eddie Speed. I'm just sayin'.....

5 Reply

Patrick Desjardins

Real Estate Investor · Amherst, VA · Member since 2015 · 386 posts · 400 votes

7y

Stupid question but did his contracts look professional?`

I remember seeing the materials he was giving out as templates in one of his first note camps and it looked so amateur-ish it completely turned me off to his info products. It was something like a 1 page JV agreement that he could have written on a napkin, and definitely not reviewed by an attorney.

Maybe it's improved since then. I'm just curious to know if it raised any alarm bells for people.

0 Reply

Michael Green

Flipper/Rehabber · Pasadena, MD · Member since 2016 · 19 posts · 9 votes

7y

It's so hard to tell the world about mistakes we have made even when we know it the right thing to do. I am sorry for everyone who went through this experience. But very appreciative of the courage it took everyone to share. Like Gerry said its never easy to "hang out your dirty laundry".

2 Reply

Tyler S.

Rental Property Investor · Tarpon Springs, FL · Member since 2014 · 32 posts · 22 votes

7y

Hi Everyone, Like Dan Zitofsky, I am sickened to hear of this situation and can't imagine how those affected must feel right now. As some of you might know, I host a popular Real Estate Podcast. In the spirit of bringing this situation to light in order to help all investors learn from situations like this, I would like to invite anyone who has been victimized by this sort of situation to be a guest on the podcast in order to share their story. I feel that stories like this help keep everyone safe and promote doing good business by educating the public on red flags to watch out for.

5 Reply

Adam Adams

Investor · Small Town, TX · Member since 2016 · 110 posts · 252 votes

7y

The big problem is that Scott is a "Guru". And unfortunately, being a "Guru" that's on several stages across the country gives one a sense of credibility from the start. We're all taught to trust our teachers and to have a mentor and do what they tell us to do. So you get done with his class and there he is and other folks in his group to show you the ropes. I've had great mentors in the past and still have one for apartments. I've had success with mentors. However, if you have never done a note before and he's there to teach you, how do you know it's crap. How do you know that what he's teaching you will get you into legal trouble? You don't. I invested in one of his lackeys listed on this forum and listened to another that's floating around here somewhere. They are all cons. "Give me your money and I'll show you the way... Help me grow your wealth.. Join my mastermind.... " pffttt...

I was fortunate though. I found my own attorneys and did my own research and did things differently than what they told me. Unfortunately, I think that all of his "students" that I met while in his group have been screwed and some are still getting screwed by Scott and his lackeys.

Now I always stress to everyone.... DO BACKGROUND CHECKS ON EVERYONE. Even your mother. Not just credits scores and crap. Get a full background check. They are cheap. You'll see the criminal, civil actions, tax liens, bankruptcies, traffic tickets, everything. You never know who the good con men are because they are good. Do a background check even if you "trust" them to teach you.

5 Reply

Martin Saenz

Investor · Fredericksburg, VA · Member since 2017 · 377 posts · 230 votes

7y

@Adam Adams Hey Adam, I'm glad you put this post out there. This helps me grow as a person and an investor. I actually have been cautious to connect with individuals over time that had affiliation to SC tribe. Many of us in the industry heard rumors and know something was off but I personally had no idea it was this severe. Over the course of time I have grown to appreciate players like Chris Seveney and some others, but it took me time. I typically mind my own business and stay in my junior lien lane, but this thread will help me open myself more to folks like yourself. I've heard a number of positive things about you and your business model. I just regret this growth came at such a high price for so many folks here and feel for many more that must have been affected but won't come out. Regarding skip tracing, Tracers is a good resource as TLO has been declining more folks the past year

3 Reply

Jay HinrichsBusiness Member

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

7y

Originally posted by @Martin Saenz:

@Adam Adams Hey Adam, I'm glad you put this post out there. This helps me grow as a person and an investor. I actually have been cautious to connect with individuals over time that had affiliation to SC tribe. Many of us in the industry heard rumors and know something was off but I personally had no idea it was this severe. Over the course of time I have grown to appreciate players like Chris Seveney and some others, but it took me time. I typically mind my own business and stay in my junior lien lane, but this thread will help me open myself more to folks like yourself. I've heard a number of positive things about you and your business model. I just regret this growth came at such a high price for so many folks here and feel for many more that must have been affected but won't come out. Regarding skip tracing, Tracers is a good resource as TLO has been declining more folks the past year

When I had my HML shop we had an Accurint product that was called fraud detector for loan applications.. it was amazing what is out there.

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John P.

Investor · Vacaville, CA · Member since 2016 · 433 posts · 249 votes

7y

@Gerry Cohen thank you for sharing your story. I am very sorry you had this happen. It is great of you to share as it's important for all of us to remember when investing money you have to be careful. Not just loans but anything! Just because a guy is a "guru" or has podcasts or has a professional webpage doesn't mean he isn't a crook or doesn't become a crook at some point. We all need to be careful and when problems develop we need to share on BP like Gerry did here. Good luck to us all!

1 Reply

Marco Bario

Specialist · Frederick, MD · Member since 2017 · 475 posts · 454 votes

7y

Companies like Prescient provide full criminal, civil, and credit reporting. Whether a private placement of JV deal, you can ask whomever you're investing with to allow you to run these checks. I the answer is no, my feeling is there's no need to proceed further.

Google searches such as "[first name] [last name]" accompanied by "fraud," "ripoff," "scam," lawsuit," "judgment," etc. are good to run as well.

Search for podcasts featuring Jeremy Roll where he discusses due diligence and underwriting. The topic if who he invests with is big for him and he discusses the topic clearly.

- Marco

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Jay HinrichsBusiness Member

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

7y

Originally posted by @Marco Bario:

Companies like Prescient provide full criminal, civil, and credit reporting. Whether a private placement of JV deal, you can ask whomever you're investing with to allow you to run these checks. I the answer is no, my feeling is there's no need to proceed further.

Google searches such as "[first name] [last name]" accompanied by "fraud," "ripoff," "scam," lawsuit," "judgment," etc. are good to run as well.

Search for podcasts featuring Jeremy Roll where he discusses due diligence and underwriting. The topic if who he invests with is big for him and he discusses the topic clearly.

- Marco

I can vouch for Mr. Roll's thorough background and due diligence that he embarks on when vetting a new partner. That's one Smart individual really enjoy him and his perspectives.. not to mention he is wicked SMART

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Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

7y

"I Lost Money" is truly a meaningless statement when it comes to investing. We need to dwell into the particular circumstances surrounding the investment to determine whether the behavior of the "advisor" was ethical or unethical, competent or incompetent, legal or illegal.

so we need to ascertain

(1) the risk of the investment. 9 out of 10 venture capital investments fail. the one thats successful is so successful it makes up for the failure of the other nine. so if you invest in 5 venture deals and they all lose money, its not fraud, incompetence on the part of the advisor, or even bad luck. its expected.

(2) state of the economy. even @Jay Hinrichs and myself lost money in 2008-2009 LOL

(3) Competence and ability of the investment advisor/manager.

(4) success or failure of the investment strategy being used

(5) fraud, misrepresentation, thievery,

it seems pretty obvious from the posts that Scott Carson is being accused of (3) incompetence and (5) fraud, misrepresentation, thievery. @Jay Hinrichs has stated that there may be some of (1) high risk involved also, that has not been recognized by those victimized. I would add that there may be (4) also, failure of investment strategy.

some of these can be interlocked, for example if a investment fails due to its high risk nature, and the investment sponsor did not inform the investors of the risk, then some aspect of (5) would exist; if not fraud certainly misrepresentation.

another example would be if the investment sponsor relates a history of experience, knowledge and success to entice you to invest, but for a large part his experience, knowledge and success are in reality not what he has stated, then we again arrive at (5) misrepresentation.

Please understand that its easy and common for even very sophisticated investors to make bad investment, and even very sophisticated investors to get fooled and seduced by con artists.

also please understand that with only a limited number of exceptions, the real estate guru industry is full of gurus who are not investment experts, they are in fact more likely to be marketing/sales experts, or front men for these marketing/sales organizations. thats why an outsized proportion end up in bankruptcy, or criminal charges for fraud file against them.

my final note is that when lawsuits are filed against someone and they don't bother answering the suit and allow a default judgement to arise, then they're just waiting for most suits to be filed so they can declare bankruptcy. however, bankruptcy can't extinguish debts that have been incurred through fraud.

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Gene Chandler

Investor · Elkhart, IN · Member since 2014 · 36 posts · 32 votes

7y

This makes me sick. I'm so sorry this has happened to so many. I was in one of SC early group of students and know a lot of the people that are posting. Scott and Steph have always been good to me and once even bought me a plane ticket so I would show up to one of his events that I was not going to come to. Like Adam Adams my business needed a lot of adjustment outside of the class and I have found my own space as well. Things like this about Scott have been coming out at an accelerated rate behind the scene so it was just a matter of time till the wheels came off if it continued and were not fixed. Apparently, it continued and some did not.

3 Reply

Eran Linker

Lender · Tel Aviv, Israel · Member since 2014 · 11 posts · 0 votes

7y

Very disappointed to read this thread .

I learned from Scott a lot, in fact I was inspired by his vast knowledge and call for action and became an educator myself.

I think vetting business partners as well as vendors is crucial in our business, and apparently being a good educator doesn't guaranty a good investment manager.

0 Reply

Adam Adams

Investor · Small Town, TX · Member since 2016 · 110 posts · 252 votes

7y

I've seen a lot of comments in regards to risky investments, bad management, incompetence and such. I think you need to go back to Gerry's and Al's comments. Once you give money to Scott, the communication stops. No updates on the investment. No distributions. Nothing. Even legal action doesn't get anything out of him once he has your money. The only time he'll get back with you is when he thinks you are going to hurt his business, as in the case of this post. Most of the posts in the past have been taken down because he pays off his investor. Testor v Carson was the first one I saw. Testor put up a website that a few people saw. Scott saw it, paid him off and it was down shortly after. Other posts have been in his basecamp forum. Very short-lived posts because the OP gets paid off. Anyone notice that he's suddenly got a ton of CFDs for sale. He he's raising money from Peter to pay off Paul to get this post down. The guy takes your money and runs away with it to Disney Euro. Same goes for the guy I invested with that is his buddy that used to be an attorney. Every month I'm on the phone with someone out there that calls me wanting to know what I know about these two. Every time I go to a conference, more people are wanting to know more about what I know. Why me? Heck if I know. Maybe because I did a ton of videos for him. Whatever the reason, I do get a lot of calls. And since this post started, I've got 7 people calling and writing to me wanting to know what I know. And it's not just Scott that's a crook from that group.

And while this comment might hurt a lot of people including myself, everyone needs to have some suspicion with all of Scott's associates and former associates. I know I do. These are not incompetent investment managers. These are crooks who con you into showing you the ropes of the business using their positions as mentors and "successful" note players. Then they want you to buy their crappy notes or JV with them on their crappy deals. Success is just around the corner if you just let them show you how, and pay them. @Michele Orgel named a few, but unfortunately, she didn't name them all. I'd name them, but my wife will kick my *** if I do.

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Jay HinrichsBusiness Member

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

7y

Originally posted by @Adam Adams:

I've seen a lot of comments in regards to risky investments, bad management, incompetence and such. I think you need to go back to Gerry's and Al's comments. Once you give money to Scott, the communication stops. No updates on the investment. No distributions. Nothing. Even legal action doesn't get anything out of him once he has your money. The only time he'll get back with you is when he thinks you are going to hurt his business, as in the case of this post. Most of the posts in the past have been taken down because he pays off his investor. Testor v Carson was the first one I saw. Testor put up a website that a few people saw. Scott saw it, paid him off and it was down shortly after. Other posts have been in his basecamp forum. Very short-lived posts because the OP gets paid off. Anyone notice that he's suddenly got a ton of CFDs for sale. He he's raising money from Peter to pay off Paul to get this post down. The guy takes your money and runs away with it to Disney Euro. Same goes for the guy I invested with that is his buddy that used to be an attorney. Every month I'm on the phone with someone out there that calls me wanting to know what I know about these two. Every time I go to a conference, more people are wanting to know more about what I know. Why me? Heck if I know. Maybe because I did a ton of videos for him. Whatever the reason, I do get a lot of calls. And since this post started, I've got 7 people calling and writing to me wanting to know what I know. And it's not just Scott that's a crook from that group.

And while this comment might hurt a lot of people including myself, everyone needs to have some suspicion with all of Scott's associates and former associates. I know I do. These are not incompetent investment managers. These are crooks who con you into showing you the ropes of the business using their positions as mentors and "successful" note players. Then they want you to buy their crappy notes or JV with them on their crappy deals. Success is just around the corner if you just let them show you how, and pay them. @Michele Orgel named a few, but unfortunately, she didn't name them all. I'd name them, but my wife will kick my *** if I do.

I am just guessing but reading between the lines his business sounds like a lot of the guys that buy junk tax deeds then resell them for profit and those holding the deeds never get redeemed and property worthless.. ???? Like I Said way up in the thread I am not sure why he called me e mailed me and wanted me to come to his event etc.. I don't even play in the NPN space.. it was strange..

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Joel OwensBusiness Member

Moderator

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

7y

It was interesting reading this.

It seems people are posting common RED FLAGS ( can't lose money, won't lose money, guaranteed returns, little to no risk, act now or it's gone, etc.) I am talking in generalities and not this specific situation.

I say it again and again on here. If people need absolutes to feel comfortable to invest with a sponsor or syndicator, fund, whatever then they need to not invest at all. Even the fund operators and syndicators CANNOT guarantee anything for returns. Notice in an offering something might say (preferred returns). It doesn't or should not say (guaranteed returns).

People that are pushy to invest this second with buzz words wreak of desperation. Honorable syndicators and sponsors have investors seek them out to invest. Those syndicators establish investing protocol and disclosures for their passive investors. The potential passive investors then decide to deploy that capital if they agree to that investing structure.

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Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

7y

@Adam Adams, thank you for sharing your first hand knowledge of the subject. With the the specifics provided it now looks like a good probability that foul play was (is) involved. This does not of course negate bad investments, incompetent manger, etc. You can be a crook, an incompetent investor, AND purchase bad investments, all at the same time!

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

7y

I share the sentiments of many on here. I am sorry this has happened to so many as I was a student of Scott's and had promoted his training in the past. Like @Gene Chandler and others who I am close with in the note industry, Scott and Steph were good to us. The common theme was we took training but did not invest. Many of us made the mistake of promoting his business without doing our proper due diligence. As @Adam Adams mentioned, we are taught to trust our teachers.

For me what I find most disheartening about this whole situation is several of these judgments are recent and during this time he was posting pictures on Instagram of his multi-week European vacation including flying first class, taking multiple cruises etc.

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DO NOT INVEST with SCOTT CARSON (We Close Notes) or Inverse Asset

DO NOT INVEST with SCOTT CARSON (We Close Notes) or Inverse Asset

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