$60K/month on $13M is roughly 5.5% interest (about what you can get on your own with a CD). Also, keep in mind that, at least for a while, the $60K is a gross income figure, not a net. There are still lots of expenses that will be eating away at it until all the properties are gone. Many of the properties are vacant, but still taxes, insurance, and in some cases, mortgage payments are owed. It also sounds like money will need to be spent on repairing some of them before they can be brought to market for sale. There are also some employee expenses, the receiver expenses, and probably a lot more. All of these will have to come out of that $60K/month.
Compound interest on the larger aggregate dollar amount will return our losses faster over time than each of us going it alone...just a thought and perhaps the Trustee has already been thinking along these lines. And as pointed out, it will most likely take a year or two for this process to play itself out, and while we are waiting, why not initiate a plan to invest as much of the principle as possible to earn back our losses.
Heck, who knows, maybe this could turn into a legitimate investment vehicle where we hire a money manager and create an investment fund...$13M with the possibility of another $22M is a nice 'nut' to generate some nice returns over the next 3 to 5 years.
Trust me, I don't want to get carried away with this notion, as it is prudent to stay focused on resolving this mess, but perhaps we have an opportunity to make something good out of all of this...
of course we want to resolve the situation with PDP, but I think btw does have a point. I think it's good to have different perspectives, and figure out a way to get our $$$ back. :idea:
I'm sorry but i think the sooner Hays is able distribute the money the better it will be for hopefully all of us. Keep in mind that some of us took out loans (ex. home equity loans) and paying interest (we did this with hope of getting 25% return)
Sammy,
Are you proposing that we go after BBB, the papers and Magezine and any publication we depended on the make our investment decisions, because they all promoted a Scum. If we have no intention of legally going after them then I do not think we have legal grounds to go after net winners. I believe that our best bet is to appeal to their intergrity.
You or i may be willing to give the money back but not everyone thinks like us. they got the may "fair and Square" although questionable they did nothing wrong. just like in the stock market.
AGAIN GOING AFTER THEM LEGALLY WILL NOT BE COST EFFECTIVE.
:crying:
BLESSINGS
Um, no. If the interest rate is the same, each investor's return will be the same (assuming there are no "per account" fees).
If one person invests $10,000 at 5.5% it will grow to $13,157.04 in 5 years with compounded interest. If 500 people each put their $10,000 (for an aggregate investment of $5,000,000) at 5.5% it will grow to $6,578,518.86 in that same five years. That value, divided by 500 investors, amounts to $13,157.04 per investor.
With such a significant amount 14-20 millian$ A more aggressive rate could be negotiated with the bank, with a lock in period...
I hope Hay's doesn't run off with MY MONY TOO :protest:
My Stocks are making 20-25% per year. Anything less than that is costing me money.
A few points:
- The report states that the $60K will help offset costs. Don't count on it as money earned
- At least one net winner has agreed to turn over his profit, hopefully others will follow. We have no legal recourse over these net winners.
- We also have no recourse over the BBB or publications.
The idea with the most potential so far was by btw:
"Heck, who knows, maybe this could turn into a legitimate investment vehicle where we hire a money manager and create an investment fund...$13M with the possibility of another $22M is a nice 'nut' to generate some nice returns over the next 3 to 5 years."
If we had that much money working for us and had a REPUTABLE developer / real estate investment firm to work with, we could form a single LLC (just investors) and LEVERAGE that money (i.e. 10% down) for construction loans, condo conversions, etc... Add in the 1031 benefit and you do it tax free the entire time! In that case, $13MM would give us control of $130MM worth of real estate. $130MM in property in a good appreciation area of 10% per year (buy and hold) gives us $130MM profit for our $13MM invested over 10 years - conservatively (every year our $13MM would be seen in profit). Develop, sell, move on to the next one and you could triple or quadruple that! In 10 years, that $13MM would easily (at minimum) double the original leveraged $130MM. That's how you put your money to work for you! 100% ROI every year (minus management fees, operating costs, etc...)
Which would you prefer: 100% return/yr, or 5.5%? The key is LEVERAGE!
If you want some cash flow, buy some large apartment buildings that will cash flow with 10% down while you make money leveraging the rest of the money.
Even if some people wanted to cash out, the rest could still pull this off. Any thoughts?
Tonight I have posted a memorandum to investors on my web site titled:
POSSIBLE TAX RAMIFICATIONS OF 2006 EVENTS CONCERNING YOUR PURCHASE OF NOMINAL GENERAL PARTNERSHIP INTERESTS OR NOTES FROM PINNACLE DEVELOPMENT PARTNERS LLC AND RELATED PARTNERSHIPS
The information in this memorandum is not tax advice. Each investor should consult with a qualified tax adviser such as a Certified Public Accountant or Attorney to determine the appropriate tax treatment based on their specific set of facts and circumstances.
Given the significant number of phone calls and requests for information from Hispanic investors, we have translated the First Interim Report to Spanish and posted on the Receiver's web site at www.haysconsulitng.net. Hispanic investors may also call the Hispanic Investor Hotline at (404) 926-0058 for additional information.
A few points:
- The report states that the $60K will help offset costs. Don't count on it as money earned
- At least one net winner has agreed to turn over his profit, hopefully others will follow. We have no legal recourse over these net winners.
- We also have no recourse over the BBB or publications.
The idea with the most potential so far was by btw:
"Heck, who knows, maybe this could turn into a legitimate investment vehicle where we hire a money manager and create an investment fund...$13M with the possibility of another $22M is a nice 'nut' to generate some nice returns over the next 3 to 5 years."
If we had that much money working for us and had a REPUTABLE developer / real estate investment firm to work with, we could form a single LLC (just investors) and LEVERAGE that money (i.e. 10% down) for construction loans, condo conversions, etc... Add in the 1031 benefit and you do it tax free the entire time! In that case, $13MM would give us control of $130MM worth of real estate. $130MM in property in a good appreciation area of 10% per year (buy and hold) gives us $130MM profit for our $13MM invested over 10 years - conservatively (every year our $13MM would be seen in profit). Develop, sell, move on to the next one and you could triple or quadruple that! In 10 years, that $13MM would easily (at minimum) double the original leveraged $130MM. That's how you put your money to work for you! 100% ROI every year (minus management fees, operating costs, etc...)
Which would you prefer: 100% return/yr, or 5.5%? The key is LEVERAGE!
If you want some cash flow, buy some large apartment buildings that will cash flow with 10% down while you make money leveraging the rest of the money.
Even if some people wanted to cash out, the rest could still pull this off. Any thoughts?
California,
Great Call! Now we are talking the same language. We can all vote on the potential property at hand and keep moving on to the next one. This is a very good idea, if we can work as a team and without a lot of disagreeing. Another thing, if the net winners cooperate and give back the earnings they could be part of the investing team. You could make so much more, as well as keeping your self-respect. It is not money earned. Earn it the right way. It will feel that much more rewarding.
In regards to the companies that were advertising for PDP, News week, BBB, all publications etc… Has anyone called their marketing dept and seen if they would return any of the funds paid to them by PDP? It is worth a shot. I am sure they would not like bad publicity coming out of this situation. If enough of us call and complain, I feel it might work.
If we can turn this situation around, what a great success story, wouldn’t that make it a much better story to right.
Hey, AG
When you go to Vegas or bet on a game, if you lose do you try to get your money back. In my opnion if you can't afford to take a risk then you shouldnt play the game; no one forced you to invest it was strictly greed,and now that your milk is spilt you want to cry about it, look if you want a sure thing then you shouldnt take risks; like driving a car or leaving your house, I don't know about you but I don't have a contract form God that guaranties me to live another day; so every day is a risk and if you don't take chances then why live. All I am trying to say is that in the world there are no guaranties, so use this unfortunate experience to gain knowledge and empower yourselves so that you learn what not to do next time. I hope that all of you recieve your full investment back, and best of luck to you all.
P.S.
O'neal cannot be sued because he was paying off investors and closing accounts, so let me ask you are you willing to spend what you get back plus more to get something that probably doesn't exist, because I am sure that the reciever will obtain every single peny available before he is done. So be cautious of anyone who says suing is a good idea, because even if you win where is the money going to come from.
Hey, AG
When you go to Vegas or bet on a game, if you lose do you try to get your money back. In my opnion if you can't afford to take a risk then you shouldnt play the game; no one forced you to invest it was strictly greed,and now that your milk is spilt you want to cry about it, look if you want a sure thing then you shouldnt take risks; like driving a car or leaving your house, I don't know about you but I don't have a contract form God that guaranties me to live another day; so every day is a risk and if you don't take chances then why live. All I am trying to say is that in the world there are no guaranties, so use this unfortunate experience to gain knowledge and empower yourselves so that you learn what not to do next time. I hope that all of you recieve your full investment back, and best of luck to you all.
P.S.
O'neal cannot be sued because he was paying off investors and closing accounts, so let me ask you are you willing to spend what you get back plus more to get something that probably doesn't exist, because I am sure that the reciever will obtain every single peny available before he is done. So be cautious of anyone who says suing is a good idea, because even if you win where is the money going to come from.
Scott,
I need to ask, are you an invester with PDP?
Scott, or should I say Gene O'Neal? I suppose you are spending some of that $14,000 a month stipend on internet service.
My dear...Oh misguided one. Greed? Why would anyone ever invest anything if investing is all based on greed? Investing in a business that went sour is one thing. Investing in a business that was completely illegally run, where the Attorney General, the BBB, the C of C, the FBI, Dun & Bradstreet and even the SEC for a time had no inkling of wrongdoing, people were lied to and stolen from, is the same as gambling in Las Vegas? WTF are you smoking because we could sell some to make some of our money back?
Gambling in LV has no comparison with getting your money stolen and being lied to. If this was legit, the SEC would not be involved.
You are silly and have no place here. We are trying to make lemonade out of lemons, and being told we are losers is not productive. Go away and go sit on your ivory tower, which is, with your attitude, most likey crumbling fast. What goes around comes around little girl.
How about if you were a net winner with on investment and pulled it out?
Then you start a new investment and are a looser. As I undersand it Hayes it asking us to deduct the winnings from our net loss. That is giving back the winnings, how come the net winners dont have to do it? Unfair.
The letter from Kunkel read as follows:
TO: Potential Pinnacle Development Investors
By way of introduction, I am Christopher M. Kunkel, legal consultant for PDP, LLC. I am an attorney, licensed in the State of Georgia, who has specialized in real estate law since 1984. I have been legal counsel to "Pinnacle" for approximately two years. I have great personal and professional respect for the businees model and integrity (LOL) of "Pinnacle".
As a condition to Investing with "Pinnacle", we have a restriction designed to protect the privacy of our investors. We request that, prior to contacting any party, other than those ont he reference list, you contact this attorney' office and advise us as th the party you request to contact and the nature of you inquiry. Failure to follow this request will result in dismissal from the investment group and a return of only your initial capital contribution. I am sure that you can understand this privacy safeguard.
We look forward to serving you in your investment strategies.
Very truly yours,
Christoher M. Kunkel[/img][/code]
My reference to compound interest was incorrect, as pointed out by TN-Apprentice, however, my reference to LEVERAGE is where we can benefit, as pointed out by California.
I invested $10K in Dec of 2005 and have not withdrawn any funds. I would be very open to being part of a single LLC for investors only. I realize that some people may need to take out their monies from what the trustee establishes as a payout, however, for those that can afford it, let's move our payouts into an investment club (for lack of a better term) and earn back our initial investments PLUS... using legitimate leverage that each of us would not have had going it alone.
I'd be open to an investment club as well. I invested $12,000. Might see $5,000 of that back
After much research and many replies from the participants of this forum, we have determined that it will be impossible for us create any meaningful solution to the Pinnacle problem en masse. Our original concept, while it had merit, does not lend itself to the complexity of the Pinnacle problem. Our research has shown us that there are too many possible securities law violations to be able to be cured correctly; too diverse of a investor group ($5,000 to $200,000) which lends itself to different goals; a flurry of possible continuing litigation towards a successor and a nightmare of proper accounting documentation which are just a few of the reasons why a group solution does not work.
We believe Mr. Hays is the best short term solution because he has been court appointed, is neutral in his approach, and has the necessary staff to unwind the problem.
In closing, thanks to all of the people that responded with their heart-felt story as we truly appreciate you taking the time to send us your data. We will try to follow the story and give our input where we feel might be helpful, but for now, we must graciously bow out.
I am interested in an investment club as well. Can anything come of that?
Per advice of my attorney, I have created an LLC for such investments. I googled PDP because I had the URL on my laptop as I am not on my desktop. I am very glad I found this website. I thought that there might be something fishy going on with them. Again, I am glad I found this. Is there anyone who has lost any money or is under investigation as a result of investing money with PDP? Thanks.
I have been following this forum for some time, periodically checking in to see the current topic. I’m what everyone has dubbed a NET WINNER from 5k that I made with my 10k invest. I pulled my principal back only after coming across this forum (in mid July) and discovering that my initial skepticism was shared by so many others. So call it a ‘tip off’ but I took the information that I had and realized if PDP was legit, I’d have no problem getting my principal back – which I did get it back. Not to say they were legit, obviously they were not. But I certainly had timing in my favor.
My point is to address the issue of whether ‘net winners’ should return their winnings. First of all, I do not feel like I ‘won’ anything. I took a calculated risk with a relatively small sum of money and pulled it back when I felt it was right. Reading about some of the losses that many of you have endured is the only reason I felt inclined to post. Not necessarily to offer to return my funds because frankly, I don’t think I should have to because I knew as much about the company as you all did. However, I would be open to an investment club or pool of funds in which participants could either sponsor or propose different investment options to the group. Since there seems to be quite a bit of second guessing a ‘newbies’ motives in this forum I’ll preface by saying that I live in Phoenix, Arizona and the investment market has dried up a bit this past year. I would love the option of ‘partnering’ with like minded individual in other regions knowing that everybody’s best interest is at heart.
I don’t know the handles or names of the main players or even figured out how to post a quote yet, but recent postings seem to encourage this idea. And if other ‘net winners’ are following along, they may be more inclined to contribute and participate in such of endeavor rather than having their integrity and honesty called in to question by keeping ‘stolen money’ which personally I think is ridiculous.
A recent post countered the idea by explaining the complexity of an investment group which there is no question, they are probably not that simple to put together and manage. But they do exist and there are obviously some smart folks on this forum that could participate and pull it off. I would not call it a solution to the ‘Pinnacle problem’ but I would call it a collective effort by industry professionals that were brought together by a single circumstance.
That’s my 2 cents – take it for what its worth. Good luck and Happy Holidays to all.
Azre,
Integrity and honesty are not necessarily the same. You "won" the money honestly. You knew of no wrongdoing. However, if you came across a bag of money that wasn't yours, and you found out later that a bank or a convenience store had been robbed earlier that day, right around the corner...would you have the integrity to return it?
In effect, I think is what you are attempting to do, and that your solution does have merit, you would be helping the others that were indeed lied to and stolen from. I applaud your effort.
I don't believe the net winners to be theives, they meant no wrong. But this was not a real investment vehicle. We were led to believe that it was. I did as much due diligence as I could. We could have gambled and lost like any other investment...but in this particular, we were lied to and were being led into failure, on purpose, without remorse. This is not investing in widgets and then having the widget market dry up. If it were all legit, the SEC would not have filed fraud charges. That is stolen money whether you want to believe or not.
I do thank you for at least trying to help.
I think most people on this forum do not understand basic business principals. I keep reading the logic that people are using with the "net winners". MMC and others like her are comparing apples and oranges. Let me just ask you one thing: How many people that sold their Enron stock before if went bankrupt had to refund their money as long as they were not using inside information or were directly related to the company? The answer is zero. The investors need to understand the nuances and the differences between securities law, common law, UCC law and their application to what happened at Pinnacle and what everybody is using for comparison. There is a process called disgourgement at the SEC level, but under most circumstances, it will not apply to the "net winners" here.