Blake Capital Groups Demand for Removal of Review and Invest Clearly's Response

Syndications & Passive Real Estate Investing
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Blake Capital Groups Demand for Removal of Review and Invest Clearly's Response

Pasquale Zingarella
CT · Member since 2018 · 50 posts · 27 votes

Invest Clearly recently received a demand letter from Blake Capital Group threatening litigation, over a negative review left by an investor. They claim that the review is defamation, stating that the author did not invest with Blake Capital.

You can read the review in question here: https://investclearly.com/sponsors/blake-capital-group#reviews

We have formally responded stating that the publication will remain on our platform.

Let me be clear, our stance has always been that Invest Clearly will not remove a real review without a valid court order. We require every investor to provide documented proof that they invested with the sponsor prior to publishing their feedback, which is meant to provide a layer of protection for both sponsors and investors.

In this case, I personally moderated the review in question and verified the underlying documentation, which confirmed the investment relationship.

There is no room for defamation on Invest Clearly.

However, if this legal action proves to be an attempt to use intimidation and threats to silence an investor and suppress their right to free speech, Invest Clearly will exhaust all resources to ensure the public is aware.

We are making all communication regarding this matter public. I have established a shared drive containing the initial demand letter, our legal response, and all future correspondence. We invite independent journalists, limited partners, and industry professionals to review the materials and follow the case.

https://drive.google.com/drive/folders/1n6kC8Q6TmBb98XDXCxDaBX2XSZ0gfZ5X?usp=sharing

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Terra Padgett
Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes
3mo
That is pitiful. It sounds like a classic case of “he say she say”. He says she was never an investor with them. She says she was and had a horrible experience and therefore shared that experience with the public. Now he is trying to sue the technology mediums she used to share her experience. SMH. I’m pretty sure I saw unfavorable threads here on BP about that operator. I know from experience that Invest Clearly verifies that someone is invested with the operator before they allow a review to go live. So if she had posted on Facebook or any other medium out there, are they suing them all? IMO, this just highlights the reason why a platform like Invest Clearly is so needed in the Syndication space.
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3mo

    This is not targeted at a specific sponsor - but if a sponsor files suit for defamation, they better not be bluffing because during a case like this discovery will be a huge part of it, and this will be a completely open-book game in regards to what can be brought into the public light. 

    7e investments53 Reviews
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    2Reply
    • Todd Dexheimer
      Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
      3mo
      Quote from @Chris Seveney:

      This is not targeted at a specific sponsor - but if a sponsor files suit for defamation, they better not be bluffing because during a case like this discovery will be a huge part of it, and this will be a completely open-book game in regards to what can be brought into the public light. 


       Chris, companies do this all the time, hoping that the threat alone will intimidate platforms and people to stop the badmouthing and in most cases, remove it. I know syndicators that have done this and they have been successful with their threats. 

      0Reply
    • Pasquale Zingarella
      OP
      CT · Member since 2018 · 50 posts · 27 votes
      3mo
      Quote from @Todd Dexheimer:
      Quote from @Chris Seveney:

      This is not targeted at a specific sponsor - but if a sponsor files suit for defamation, they better not be bluffing because during a case like this discovery will be a huge part of it, and this will be a completely open-book game in regards to what can be brought into the public light. 


       Chris, companies do this all the time, hoping that the threat alone will intimidate platforms and people to stop the badmouthing and in most cases, remove it. I know syndicators that have done this and they have been successful with their threats. 

      It is my personal opinion, (potentially to be proven or disproven in court) what you just described is what this is. Since posting this across social media platforms people have DM'd, emailed, and texted me, at scale, telling me this person has threatened them.
      0Reply
  • Pasquale Zingarella
    OP
    CT · Member since 2018 · 50 posts · 27 votes
    3mo

    Open-book is our mission.

    1Reply
  • Terra Padgett
    Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes
    3mo
    That is pitiful. It sounds like a classic case of “he say she say”. He says she was never an investor with them. She says she was and had a horrible experience and therefore shared that experience with the public. Now he is trying to sue the technology mediums she used to share her experience. SMH. I’m pretty sure I saw unfavorable threads here on BP about that operator. I know from experience that Invest Clearly verifies that someone is invested with the operator before they allow a review to go live. So if she had posted on Facebook or any other medium out there, are they suing them all? IMO, this just highlights the reason why a platform like Invest Clearly is so needed in the Syndication space.
    3Reply
  • Pasquale Zingarella
    OP
    CT · Member since 2018 · 50 posts · 27 votes
    3mo

    Thanks for that @Terra Padgett!! 

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    OP

    1.  I don’t invest in Syndications.   Have never been a GP or LP.

    2.  I have looked at and responded to many LP complaint posts on BP and have found all of them to be severely lacking in both taking ownership, deal analysis and openness.

    3.  Defamation, lawsuits, strong arming, etc I will leave to the courts.

    4.  Invest Clearly your company or website???  I only could see the reviews and did not sign up to see if there was more under the hood.  Found the review posts lacking.  

    5.  The review tied to your post was severely lacking.  Not saying it’s not true but it shows a clear misunderstanding of not “Expectations” but legal requirements for a Syndication.  Hopefully your Invest Clearly company or group is more educational in nature versus flavor of the month.  BP when they were developing their Syndication approach I recommended they did not take a similar approach, listing good/bad reviews as the basis for Syndication reviews.  

    Hopefully your program and BPs approach is educating and growing the LPs as investors versus stirring the pot.  

    1Reply
  • Pasquale Zingarella
    OP
    CT · Member since 2018 · 50 posts · 27 votes
    3mo

    Thanks for responding Henry!

    Yes, Invest Clearly is my company. We are a review site that hosts reviews from verified investors. I cannot speak to which or how many reviews you saw that you consider to be lacking, but you are fully entitled to your opinion based on what you consider valuable.

    I cannot control the depth of which reviews are written, that is entirely up to the author. Do I wish all of them were extensive and go beyond surface level? Of course. However, reviews are subjective and the lack of depth included does not invalidate the reviewers experience nor does it limit their right to share the review.

    I also fundamentally disagree with the idea the review tied to this post is lacking. This is an extremely comprehensive detail of this investors experience with this GP that would be critically relevant to anyone evaluating placing capital with this company.

    Reviews are not a 20 page due diligence checklist summary nor a comprehensive financial audit. These are real people sharing their qualitative and quantitative experience with these companies to support the next investor in consideration.

    There are plenty of 5-star reviews and plenty of 1-star reviews on Invest Clearly. Both are important

    0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    3mo
    Quote from @Pasquale Zingarella:

    Invest Clearly recently received a demand letter from Blake Capital Group threatening litigation, over a negative review left by an investor. They claim that the review is defamation, stating that the author did not invest with Blake Capital.

    You can read the review in question here: https://investclearly.com/sponsors/blake-capital-group#reviews

    We have formally responded stating that the publication will remain on our platform.

    Let me be clear, our stance has always been that Invest Clearly will not remove a real review without a valid court order. We require every investor to provide documented proof that they invested with the sponsor prior to publishing their feedback, which is meant to provide a layer of protection for both sponsors and investors.

    In this case, I personally moderated the review in question and verified the underlying documentation, which confirmed the investment relationship.

    There is no room for defamation on Invest Clearly.

    However, if this legal action proves to be an attempt to use intimidation and threats to silence an investor and suppress their right to free speech, Invest Clearly will exhaust all resources to ensure the public is aware.

    We are making all communication regarding this matter public. I have established a shared drive containing the initial demand letter, our legal response, and all future correspondence. We invite independent journalists, limited partners, and industry professionals to review the materials and follow the case.

    https://drive.google.com/drive/folders/1n6kC8Q6TmBb98XDXCxDaBX2XSZ0gfZ5X?usp=sharing

    As a syndicator and as an investor in other syndicators deals, I’ve been on both sides of the coin.

    The number 1 biggest “problem” is that there is often a total misalignment between the interest of investors and the interest of the syndicator.  REITs had this very same problem for 40 years and in the last 20 years the REITs with “good governance” (alignment of management interests and shareholders interests) have survived, while  REITs suffering “bad” governance have been liquidated, sold, or gone belly up.

    The number two biggest problem is inexperience, lack of knowledge, and lack of managerial depth on the part of the syndicators/sponsors/asset managers. 

    Finally, the third problem is that a number of syndicators are inherently dishonest. 

    From the investor side, the biggest three problems are 

    1. Inappropriate investment - either the investor claims accredited status which he doesn’t have, or while marginally passing accreditation status they invest in an offering with way too much risk and way too much capital commitment for their personal financial status

    2. Not performing an appropriate level of due diligence. 

    3. Not understanding RISK ADJUSTED ROI.

    Sounds like your doing a great job; certainly investor posts should be able to relay anything TRUE without threat of legal action.  
    Private Mortgage Financing Partners, LLC
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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    OP.  Again I don’t have a dog in the hunt.  But it is super ????? I don’t know.   Knowing people will put $50,000 at a pop and think passive and trust are good barometers.  Whether it is your company Invest Clearly or BP I think a good or bad review approach is a poor service.   I’ll give a couple of post to illustrate.  

    Syndication Offering

    Who out there wants to invest in Wonky Donkey syndication.  50% annual return, for 2 years.  Investment window 2 years.  Accredited investors. $50,000 per tranche.  

    Wonky Donkey is a 2 year old Stud Colt.  3 times War Admiral and 2 times Zenyatta bloodlines.  This is the Stud who will define the racing future.  

    Cost $5,000 as a colt.  $30,000 per year Stable and Training fee at the BP Orlando Stables for 2 years.  

    He will be entered in all 3 legs of the Triple Crown.  When he wins the first he will be worth $3,000,000.  The second he will be worth $15,000,000.   The third he will be worth $80,000,000.  

    The thoroughbred industry requires hand breeding and not artificial insemination.  Wonky Donkey will breed 100 mares per year and based on his great genetics possibly up to 50 years.  That is 5,000 services at the going rate of $1,000,000 per service.  Or $5,000,000,000 over his life time.  Using an initial cost of $65,000.   Don’t you want to participate in a deal with a return of 99.9999%???  Along with a 50% compounding return with an investment window of 2 years.  

    This is our 5th full cycle syndication, all meeting original LP return metrics.  Please see reviews at BP and Invest Clearly from our prior full cycle LPs.  

    You might be wondering how we could buy a world champion Stud colt out of 5,000 born every year.  We used the Patruscian brothers horse selection process.  This is very similar to the method used in the movie Moneyball starring Brad Pitt.  

    Our trainer Henry Clark uses the Sacking method for the original trading.   For competition training he uses the Rep Go Rep system.   Originally made famous in 1982 by Diane Goldstrom whose girls High School team won the Iowa 3A cross country championship.  Even though none of them ever ran the full distance except in Competition.  

    We will provide every 24 hour updates on Zonky Donkey and monthly financials.  Tax return info will be sent by Feb 15th every year.

    With the amazing team and systems we have put together What could go Wrong?   Send you money now.  

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    Above has to be ridiculous right????

    No.        

    There was a disappointed LP investor with  a BP post.  The Syndication investments.  Dead brand names.  Broadway shows.  Crypto trading.  The GP was a well known RE syndicator.  

    All Accredited investors.  At least they signed yes.  All TRUSTing a well known RE syndicator.  All knowledgeable on Dead Brand resuscitation, Producing Broadway shows, and Crypto trading????

    I would actually invest myself if they brought back Delaware Punch.  

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    Now let’s do a Risk Adjusted Return as @Don Konipol mentioned.  

    Let’s say 18% stated return.  
    Does BP or Invest Clearly provide a Due Diligence list?   Do they provide a Risk Adjusted Return approach?

    Let’s start at 18%.
    1.  Horse trainer has trained 2 quarter horses but never Thoroughbreds.  Minus 2% points. 
    2. Financial team has done REI but never racing. They missed the entry fees and transportation costs and insurance. Minus 2 %.
    3.  Capital and debt Stack.  LP positions can be switched to debt.  Minus 2%.
    4.  Preferred positions can be added diluting LP positions.   Minus 2% points.  
    5.  Syndication returns only cover race winnings and not stud fees.  Minus 2%
    6.  LP investors know nothing about Horse racing.  Minus 2% points.

    Adjusted return 6% return.  Forget the 50%.

    Are you supplying a Risk Adjustment approach?  


    Who Cares.  They had 5 great sets of Full cycle reviews.  

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    I’m an LP and I’m pissed.  


    Expectation- $50,000 all in

    Legal or business- Capital call on transportation, entry fees 

    Expectation- monthly financials. 
    Legal- no management reports required.

    Expectation- 24 hour Zonky Donkey updates.  
    Legal- none required.   

    Expectation-  $50,000 all in.   
    Legal per contract- debt conversion, diluting Preferred positions.   

    Expectation-  at most I might lose $10,000 of my $50,000.   Nothing ever goes to zero.  Right???

    Financial- Lenders, GP, Preferred positions get paid before LPs on any settlements.   

    BP and Invest Clearly are you educating LPs about the difference between LP expectations and Legal Syndication requirements???

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    3mo

    Due diligence checklist.

    Items above but also

    RE MFH syndications are very similar to our Self Storage development deals.  

    1.  Market analysis.  We take an occupant, unit, and price inventory in our market area.  We check on building permits.  Check on land availability based on zoning.  

    2.  Market analysis.  Do a demand study.  


    3. Capex- we have a tight Contractor group. We don't go shopping. Solid quotes.

    4.  Finance-  WE ALL learned from the great housing crisis.  Match your financing term to your investment harvest period.  Don’t do a 5 year project with one year terms.  

    6.  Failure.  We never fail.  Might not meet our expectation, but never lose.  Define failure for yourself.   Then do stress test.  Capex overruns, occupancy, etc.  Assess risk.  

    Basically you have to be a Commercial Bank Lender.  Once you let the money go, it’s gone.  

    Good reviews and bad reviews from LP vendors mean very little.  

    If you read up on being an Accredited Investor.  $50,000 is very Little.  Move on and learned.  

    ????? keep making the same mistake

    Smart people learn from their own mistakes.

    Brilliant people learn from other investor mistakes.  

    0Reply
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