Like many others, I have had a negative experience Joint Venture investing with Scott Carson and his company Inverse Asset Fund LLC. I'll share my experience in the hopes that it will help others who are thinking of or currently invested with him. I decided to invest with Scott Carson after attending a few of his NoteCamp online courses and taking his Virtual Note Buying for Dummies course. I thought those programs provided pretty good value and that Scott seemed genuinely concerned with helping people get started in the Non Performing Note (NPN) space. I successfully invested in a couple of NPNs on my own using many of the people he recommended so it seemed that his method had potential to be successful. At the time I was busy with my main business working with tax foreclosed properties, and I didn't really have the time to do NPNs on the side, but it seemed like something I could expand into in the future so when Scott approached me with a JV (Joint Venture) proposition to passively invest in some CFDs he was buying it seemed like a great way to get some exposure to how these played out. In his initial email about the agreement he said:

“We will be providing monthly updates to our investors, along with quarterly payments (or larger chunks depending on if we sell the asset off). We will also be providing collateral files for you to review.”

Unfortunately, after wiring the money to Scott in October 2017, the promised monthly updates never came. For the first 2 months I gave him the benefit of the doubt. Having invested in a few notes I knew that getting servicing transferred and disclosures out to borrowers could take some time and it was clear Scott was a busy guy. But then I mentioned to another local investor I had started working on NPNs and had invested with Scott, he hesitantly told me that he knew of another investor who had a real hard time getting their money back from Scott, he didn’t have a lot of details but advised me to be careful. So at this point I started being much more persistent about asking for updates and I did start to get some from Scott's assistant. One of the 4 assets had made payments and looked like it would become performing. It seemed like things were on track, and I looked forward to my first promised quarterly payment. Mid-March I asked Scott about it and he assured me it was being processed and I should have it in a few days. A month goes by, with no payment or update. I can see on Facebook that Scott is off vacationing in Europe so I give him a pass for not responding to my inquiries. I try to email the assistant and get an Auto reply that as of May 22 she is no longer working there.

When Scott gets back in June 2018 he tells me that his assistant has not been updating the files for a couple of months, but that he will get my payment out to me by the end of the week. A week goes by, no payment. I ask about it and get no response, a few days go by, I ask again, no response, a few more days. I start hitting him daily. Finally he does wire me a payment but there is no accounting of which notes it is for, what is principle, what is interest, or anything like that so I start asking for that info. He tells me he will upload the full accounting to an online account I can access (as agreed to in the JV contract) by the end of the week. Same story as before, I keep asking for the info and getting no response or occasionally "I will get that to you in a few days". This goes on for several months.

In Feb this year (about 15 months into the deal) Scott tells me all the assets are up for sale. At this point I still have not received any additional quarterly payments and have no idea what is going on with any of the loans aside from a very infrequent and vague response form Scott like “one loan has made a few payments and we are working with legal to cancel the contracts on the rest.” A month goes by I ask for updates, no response, same next month. I look up in the county records to see if I can see anything. I see that the deeds were recorded into Scott’s Company but the deed of trust that was supposed to be recorded at the same time in favor of my company to secure my interest in the property was never recorded. There is also an $800 water lien against one of the properties. When I finally get Scott to respond he again says all assets are being sold and I should have the money soon. Fast forward 6 months and the same investor who initially warned me about Scott sends me a link to the following BP thread:

https://www.biggerpockets.com/forums/70/topics/738696-do-not-invest-with-scott-carson-we-close-notes-or-inverse-asset?page=1

It is quite lengthy but to summarize, it turns out several other investors have also had negative experiences with Scott including:

Gerry Cohen, Al Curiel, Beth Hale, Bella Scanland, Chris Frank, Michele Orgell, Kristin Cook, Gar Parries

Most of the stories are almost identical to mine. At least one takes it a step farther and say that Scott partnered with multiple people on the same asset without their knowledge. Many have or are getting legal judgments against Scott. As I’m reading, the thread I’m hoping to see someone jump on and defend Scott and say they had a positive outcome investing with him. Nope. Instead I see people I recognize from presenting at his NoteCamp event saying they think he will probably go to jail. I type in Scott Carson the Travis County District Clerk site here:

https://www.traviscountytx.gov/district-clerk/online-case-information

and find 7 closed and 7 active cases against Scott

From there I go to the Clerks site to see the judgments:

https://www.tccsearch.org/RealEstate/SearchEntry.aspx

There are 4 from what look like investors and one from the IRS: 

One is particularly troubling as it specifically mentions Fraud:

I started to look at other counties. Williamson County where Scott is located posts their Jail Records with mugshots online:

https://judicialrecords.wilco.org/PublicAccess/default.aspx

Not good. Booked 4/15/19 Charge: Writ of Attachment Released on $10k bond 4/16/19

I had to look up what a writ of attachment was. From Wikipedia:

“A writ of attachment is a court order to "attach" or seize an asset.[1] It is issued by a court to a law enforcement officer or sheriff. The writ of attachment is issued in order to satisfy a judgment issued by the court. A prejudgment writ of attachment may be used to freeze assets of a defendant while a legal action is pending. Common grounds for obtaining a prejudgment writ of attachment are that a defendant has committed fraud or that a defendant is prepared to hide assets from a court.”

So at this point I'm pretty scared that my entire investment is in Jeopardy. I finally get Scott on the phone and he tells me not to worry, he has already made it right with all the people on the thread. I ask him why the deed of trust was never filed for me, he doesn't really apologize or give any explanation but says he will get that done right away. Days go by. It doesn't happen. I tell him I want my money back per our contract terms. He says no problem, that he has bids on all the assets they should be closed by the end of the month and he and he can pay me out then. The end of the month comes. No money, several ignored calls, texts, and emails. Eventually he does respond with some vague excuses. He is waiting for IRA companies that are taking longer than usual on some, there are some title issues being cleared up with others. Seemingly plausible, but it seems like just a stall tactic.

By this point I have talked to several other investors who have been mixed up with Scott. The ones that did finally get something out of Scott all said it was not until they started hurting him online. So I started reaching out to people from NoteCamp and my wife started contacting people who were having him on their podcast. After that he agreed to transfer 3 out of the 4 assets over to my company. This time action was swift. He actually showed up unexpected at my doorstep at 7pm to personally deliver the loan files. I tried to get him to explain what was going on but he said he was late for another meeting. The 4th asset was allegedly still being sold and was supposed to close by the end of the week at which point he would wire me the money. If you guessed that the end of the week came and I didn’t get paid, you must have read the rest of this post. Or maybe you read this one:

https://www.biggerpockets.com/forums/70/topics/757247-another-victim-of-scott-carson-we-close-notes-and-inverse-assets?page=1

or this one:

https://www.biggerpockets.com/forums/70/topics/738696-do-not-invest-with-scott-carson-we-close-notes-or-inverse-asset?page=1

So I guess I got something. I'm sure Scott would add me to his list of investors who had some delays but were taken care of in the end. But I have spent way too much time stressing about what was supposed to be a passive investment and now I have to do the work to dispose of the Assets that he was supposed to do. Not exactly what I signed up for. I can now finally see the servicing records on those 3 CFDs. One CFD never made a payment but he didn't take back the property in almost 2 years. Two of the three have made some payments. He collected over $12k in P&I payments. 50% of that was supposed to go to me in quarterly payments. I only got one payment for a bit over $2k. He also still owes me for the 4th asset. If he does pay those off I will post an update. Scott has wronged a lot of people, I sincerely hope he can make it right.