Growth Equity Group

Ask About A Real Estate Company
12yFollow

Growth Equity Group

Mark S.Pro Member
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes

Has anyone here done business with Growth Equity Group?  I received a BP email from a gentleman, stating he is with Growth Equity Group.  It looks like they allow for non-recourse financing and their clients utilize self-directed IRAs.

Any feedback on them, good or bad, is much appreciated.  Thanks in advance.

0Reply
196 views

Most Popular Reply

Tim Gurr
Minneapolis, MN · Member since 2016 · 2 posts · 2 votes
10y

I'm new to investing in real estate.  I have been talking with Growth Equity Group (GEG) about a SDIRA on single family rental home/properties.  They seem dedicated to helping clients, but I would like to know if anyone out there has actually bought property through them to know if it is working out OK.  Returns on paper look really good.

They have provided "Condition Reports" conducted through the property managers that indicates everything is "OK".  However, they do not have any photos of the interior of the dwellings (which seems strange to me, since photos are always available on properties for sale).  They said they would take photos on the next walk-thru (after I have purchased properties).  Another concern is that the 5.5% non-recourse financing jumps to 8% in years 6 & 7, then a balloon payment is due.  They indicate that I could sell one or two properties around year 5 or 6 and then secure a new loan on the remaining.  They highly recommend putting any income stream towards paying down principal in the first 4 or 5 years to increase cash return on selling the home.  So a concern is being able to sell in 5 or 6 years without facing a balloon payment or figuring out how to secure a new loan. 

Another concern is that they have only been in business as GEG since July, 2013, however, the owners have 10+years of previous experience in the business.  The problem is, that it seems it would be better to have had them in GEG for a longer period to show that there 'Model' really works.

I've seen some comments from others, but most are older posts (more than a year ago). Would really appreciate some input.  Thanks.

2Reply
See this reply in the discussion

31 Replies

Jump to latestLatest
  • Walt Wiley
    Real Estate Investor · Tucson, AZ · Member since 2012 · 1 post · 1 vote
    12y

    Growth Equity Group provides turnkey condo rentals that they will fund approximately 50% with non-recourse funding.  They may work out well for some but I am having trouble getting my earnest money back from them after the specifics of the financing changed between the contract and when they drew up the closing docs.  They stopped responding to multiple emails as soon as I requested my earnest money back.  Be sure you read the fine print.

    1Reply
  • Martin Yung
    Tampines, Singapore · Member since 2014 · 68 posts · 21 votes
    12y

    @Mark S. 

    The guy from this group also called me, one red flag I notice is they don't give referrals. so it's a deal breaker for me. 

    0Reply
  • Mark S.Pro Member
    OP
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes
    12y

    @Walt Wiley  and @Martin Yung ,

    Thanks, guys, for the feedback.

    0Reply
  • Steven W.
    Investor · SAN FRANCISCO, CA - California · Member since 2014 · 78 posts · 32 votes
    11y

    Gents,

    I had a very good conversation on the phone today with @George Golub from Growth Equity Group. I very much like the idea of working with a turnkey provider for my Self Directed IRA, since both my wife and I work full time.

    I asked George to send me some references that I could contact who have worked with them. I'll post here what I find out.

    Should I be looking into other groups to purchase property from? I'd appreciate any and all suggestions as I am new to investing in Self Directed IRAs.

    Thanks!

    0Reply
  • Brian EastmanPro Member
    Self Directed IRA & 401k Advisor · Wenatchee, WA · Member since 2014 · 2k+ posts · 2k+ votes
    11y

    @Mark S. 

    Growth Equity Group has come up before and been discussed on the following forum thread.

    http://www.biggerpockets.com/forums/56/topics/1579...

    Bottom line is that they may or may not offer solid real estate investment properties.  They do have considerable background in that area.  Diligence, diligence, diligence...

    As far as an IRA provider, I would recommend working directly with a professional custodian or IRA LLC facilitator. Growth Equity and their affiliate Equity IRA is not an IRA custodian and is simply marketing the underlying services of a custodian. There is no benefit to this additional layer and plenty of potential down side.

    1Reply
  • Steven W.
    Investor · SAN FRANCISCO, CA - California · Member since 2014 · 78 posts · 32 votes
    11y

    Thanks @Brian Eastman for the clarification. I'm thinking of using either Sense Financial or IRA Services as my SD IRA custodian.

    Steven

    1Reply
  • George Golub
    Chicago, IL · Member since 2014 · 12 posts · 0 votes
    11y

    Great speaking with you today as well, thanks again! @Steven W. 

    @Brian Eastman Yes, you are correct. Our in-house IRA consultant, Equity IRA, is a broker/advisor to Provident Trust and their clients. The benefit of this extra layer is customer service. Our team at Equity IRA are all professionals with years of experience in the Self Directed space. Giving their clients an unparalleled level of service by always being available, easy to reach, and experts in their profession. I do not disagree with you that some individuals do not need this extra layer but having someone there for the lifetime of the account can be beneficial as well.

    @Martin Yung We are happy to provide you with references/referrals about our service. Our goal is provide the best real estate investment experience to our clients, so they become advocates of our company. 

    Lastly, @Walt Wiley I am sorry you had a bad experience with us. If this issue has not been resolved, I would be happy to help. 

    0Reply
  • Carl Dean
    Rental Property Investor · Dallas, TX · Member since 2015 · 106 posts · 66 votes
    10y

    There are many groups across the US that have this exact same business model. The one difference between them all is the assets they sell. Investors beware and stay away from any type of C-class investments unless you want to buy yourself a second job that is sure to cause you a lot of stress. Any provider can offer the non recourse financing that is nothing really special there. However, only the good providers will warranty the asset for an extended period to make the investor feel more secure in their decision. Don't fall for the pump and dump of buying a C-class asset from someone only for them to disappear as soon as they have extracted their value from you. I have seen the heartache one to many times. 

    0Reply
  • Mark Creason
    Real Estate Lender and Broker · Dallas, TX · Member since 2013 · 966 posts · 500 votes
    10y
    Originally posted by @Martin Yung:

    @Mark S. 

    The guy from this group also called me, one red flag I notice is they don't give referrals. so it's a deal breaker for me. 

    I rarely give out referrals.  The reason for that is I get 20 requests a week for financing and if these people called my references, I would get some angry people as their time is important. 

    I have given out references when a customer is ready to proceed, but try to keep that to a minimum.  When you close a deal with a lender, would you be ok with them using you as a referral, and how many times would you want potential clients to call you.

    By the way, I have done business with Joel Owens who some of you may know, and he likes to talk to Bigger Pockets people.

    Mark

    0Reply
  • Tim Gurr
    Minneapolis, MN · Member since 2016 · 2 posts · 2 votes
    10y

    I'm new to investing in real estate.  I have been talking with Growth Equity Group (GEG) about a SDIRA on single family rental home/properties.  They seem dedicated to helping clients, but I would like to know if anyone out there has actually bought property through them to know if it is working out OK.  Returns on paper look really good.

    They have provided "Condition Reports" conducted through the property managers that indicates everything is "OK".  However, they do not have any photos of the interior of the dwellings (which seems strange to me, since photos are always available on properties for sale).  They said they would take photos on the next walk-thru (after I have purchased properties).  Another concern is that the 5.5% non-recourse financing jumps to 8% in years 6 & 7, then a balloon payment is due.  They indicate that I could sell one or two properties around year 5 or 6 and then secure a new loan on the remaining.  They highly recommend putting any income stream towards paying down principal in the first 4 or 5 years to increase cash return on selling the home.  So a concern is being able to sell in 5 or 6 years without facing a balloon payment or figuring out how to secure a new loan. 

    Another concern is that they have only been in business as GEG since July, 2013, however, the owners have 10+years of previous experience in the business.  The problem is, that it seems it would be better to have had them in GEG for a longer period to show that there 'Model' really works.

    I've seen some comments from others, but most are older posts (more than a year ago). Would really appreciate some input.  Thanks.

    2Reply
  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    10y

    @Mark S. 

    I know that they advertise quite heavily but I have never used them. 

    0Reply
  • Hollis Henning
    Investor · Oxnard, CA · Member since 2016 · 2 posts · 0 votes
    10y

    Hi Tim, I, too, am considering investing with GEG using my IRA. I'm wondering if you ever went through with your investment with them, and if so, how it is going. Any feedback you can give me would be much appreciated.

    0Reply
  • Hollis Henning
    Investor · Oxnard, CA · Member since 2016 · 2 posts · 0 votes
    10y

    Also, if anyone else has any feedback regarding Growth Equity Group, your feedback would be appreciated too. Thanks!

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    10y

    Any updates? Anyone have experience with them? Any work on Brett Immel's pending fraud case?

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    10y

    bump

    0Reply
  • Red Morgan
    Rental Property Investor · Brooklyn, NY · Member since 2015 · 16 posts · 14 votes
    9y

    I have been contacted by them as well a month ago and have been pretty busy to do my due diligence. But now I go online and have seen that you gentlemen (and ladies possibly) have spoke about it. Any updates if anyone has invested with this group? 

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    9y

    I can't tell what their relationship is to https://flipnerd.com/.  (See tab at top of the page.)

    0Reply
  • Amanda Kuhl
    Essex, MA · Member since 2016 · 3 posts · 2 votes
    9y

    I recently got pretty far down the path of investing with GEG and opted out of it for several reasons.  We worked directly with the CEO Justin French and he was easy to work with and answered most of our questions very quickly. We backed out because there were too many details we didn't feel comfortable with but we are first time RE investors.  So, someone with more experience than us might check them out and move forward.  If you decide to take a deeper dive with GEG, I suggest you ask the following or research in other ways:

    Find out their current connection to Brett Immel who was recently indicted on a mortgage fraud case.

    Ask specifically about the pre-approvals they get from their lenders. We were told that the lender had already issued a preapproval and that the appraisal was unnecessary. We asked repeatedly for the name of the lender. When we finally got the name we realized it wasn't a non-recourse lender bank (like NASB), but an LLC formed with private investors for the purpose of funding these projects. So, buyers (like you and me) put 50% down on properties with balloon payments and all without an appraisals. We know an agent in FL and she checked comps for us and the few we found were inconsistent.

    Make sure you get copies of the rental contracts.  Every year a tenant renews the rent goes down slightly.  I can see the value in keeping good tenants but that is something that should have been disclosed to us.  We had to specifically and repeatedly ask to get the contracts. 

    Finally, beware of getting pushed into a deposit too quickly.  They wanted the whole transaction wrapped up in days (like the non-refundable deposit) and we felt rushed. They said it was that these LAST TWO condos had been pulled out of inventory for us and we needed to move quickly or they would be released to other investors. (fair enough.) We were very clear that we needed more time to review the investment and they obliged. Justin was great about giving us time to come to a decision.

    So my point is, it didn't work for us.  It might work for you.  Justin French is very service oriented and was pretty easy to work with.  Good luck with your decision to move forward.  Let us know how it goes.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Amanda Kuhl  interesting.. at the end of the day did you think you were over paying for the unit because you were offered very easy financing?.

    AS some mentioned above in the thread this is quite common scheme with a number of turn key operators... although there should be no secrets about the lender..

    usually the lenders in these deals are private folks that want interest income in their IRA or personally.. rarely if ever are they banks... however as stated a lot of this type of financing occurs in the industry. so that in its self is not a red flag..

    I would thing the major issue is :

    1. is it true market value or price juiced

    2. PM in place and solid.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Amanda Kuhl
    Essex, MA · Member since 2016 · 3 posts · 2 votes
    9y

    Hi Jay,

    We were unsure of the market value because of the lack of comps we could find and GEG's insistence that we didn't need an appraisal - they had done all of the work for us with their pre-approval process. 

    We also didn't like the balloon payment. It was presented as a way to get a better rate (5%) and GEG said it was customary to sell the property before the balloon payment came due which might be an option. But not knowing the appraised value of the property makes it difficult to think ahead to what we might sell for.  Anyone can argue that the lenders wouldn't lend on over valued properties but they didn't really have much skin in the game.  They were getting 50% down, 5% on the principal and balloon payments every 8(?) years so if a handful of loans went belly up it wasn't much of an impact.

    As I said, an experienced RE investor might have better insight and therefore more confidence in how it all works.  We loved that they made the whole process so easy to invest in a SDIRA (one of my 2017 goals for is to navigate non-recourse lending per my recent blog post here www.timemoneyandchoices.com ) but we had too many doubts to make it right for US. 

    I see a lot of people on BP asking about GEG.  If anyone with a different experience reads this please post.  I'd love to hear what worked for you.  I said several times that Justin French, CEO, was great to work with.  I encourage anyone interested in GEG to do their own research and contact the company directly for more information.  Best of luck everyone!

    0Reply
  • Carlos Alger
    Real Estate Investor · Miami Beach, FL · Member since 2016 · 16 posts · 8 votes
    9y

    Hi everyone. I was also referred to GEG but by my SOLO 401K provider. I haven't yet spoken with them and I am sure glad to have found all this info on BP. I also fund this ripoff report issued in March 2016. Is the ripoffreport site trustworthy? I usually use BBB but GEG is not accredited with them, so I went fishing.

    http://www.ripoffreport.com/reports/growth-equity-...

    Your feedback is greatly appreciated!

    0Reply
  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2017 · 1 post · 2 votes
    9y
    2Reply
  • Lee MoseleyPro Member
    Rental Property Investor · Albuquerque, NM · Member since 2016 · 6 posts · 4 votes
    8y

    All, I was approached by GEG way back in 2013/14 (still have the Offering Memos). I didn't buy as the  product seemed quite high priced for the markets, their "proposed" (never saw rental agreements for "actual") rental rates were also high (hence the lowering over the years, when it should remain stable or go up). Their Annual Income didn't add up to the Rent*12 on their sheets, and didn't include Condo Association Fees. Seemed like they were selling properties they were "flipping" and financing. Well, it's been 5 years, and I checked those same properties (2 of 4 areas/properties, Bridges and Timberwoods), and they are worth FAR less than they were being sold for, when most property went up, so selling in 5-6 years would NOT have made $$, but would have lost. As with Buy & Hold, you should have a Positive Cash Flow (specially with 50% down) and Build Equity (or try to pay off within 15 years).  You don't want your IRA being bled down by Negative Cash Flow! And equity build up (paying off) will accelerate returns down the road or allow you to sell/exchange for larger properties (move from single to duplex/tri/fourplex to 5-20 Units, to 100's of units, etc.).

    Also on a note regarding Value (determining), as a Buyer, I ALWAYS have a professional appraisal done & paid for BY ME (sorry, but I don't trust sellers/owner/agents or their appraisers, and certainly don't trust "Market Analysis", except for "ball park" values! As stated Due Diligence, Due Diligence, Due Diligence!! 

    1Reply
  • Kay M Rowe
    Member since 2018 · 2 posts · 1 vote
    7y

    I have elderly clients who had a horrific experience with them. Only now finding out they misprepresented and withheld vital information on two properties they had them invest in.   Never disclosed that they had purchased the properties at market value and then re-sold to them, same day on one in particular.  GEG made a profit of nearly $70K between these two properties.  Unlikely this couple will ever come out ahead on it.  Quite the opposite.

    1Reply
  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Patrick Shawn Faherty:

    Any updates? Anyone have experience with them? Any work on Brett Immel's pending fraud case?

     Huh? Please elaborate. I'd love to hear more about this.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free