All Forum Posts by: Rio Peterson

Agreed. It was so difficult to get those licenses. I'm not willing to relinquish them this easily. When I brought up this concern, he brushed it off, essentially said not to worry. He wanted to manipulate the language in the LLC doc to show that TECHNICALLY on paper, I'm not managing the investment when in reality I would be. That dishonesty doesn't settle right with me considering how easily I would get caught and barred from the securities industry. Not willing to risk it.

I think his motive is that he wants someone naive and inexperienced to fall into his trap in order to get funds from them since he definitely cannot. Once he gets the money, we would never see it again. 

He said he wants to see if I'm qualified to do a 1031 exchange from his other properties. But at this point, I'm nowhere near comfortable providing my info. I obtained the Cert of Formation for the LLC that purchased the property we viewed (which he said he was a member); his name was not on the doc. This makes me believe that he gets people to create an LLC in their own names, obtain funds from a hard money "hedge fund" (his words) that he uses in his business, and gets tied up in his messy deals. If there were any consequences, he can't be tied and would not be liable. With all the bankruptcies, this setup makes me certain that he cannot qualify for any kind of loans himself.  

I looked up the properties on the tax assessor's page and found that they were purchased by LLCs, which is how he said he sets up his purchases. I'm still waiting for the LLC docs to be pulled from my state's business records site to see if his name is on them. The reason he wants me involved is because he wants to focus more on the sales side than the flip himself. But bottom line, I agree that there are way too many red flags, so I won't pursue this.

I was recently approached by a seemingly experienced real estate investor to partner with him to flip $1M+ ARV homes. We met for the first time at a networking event and after hearing I work in finance, he was overly eager to work with me despite me having no experience in real estate.

After talking a bit and showing me some figures, he invited me to view his properties in a town over 50 min away immediately after the event. It was a bit odd, so to be cautious, I brought someone I trust to accompany me.

We viewed the properties (which were beautiful), then he proposed how we could set up a partnership, where he sources the deals and raises funds from other investors, and I would manage the operations and budgeting of the flip to completion because I have no money to contribute. He would also teach me how to find deals throughout the process. He asked me to complete a credit check to prove I'm qualified to invest.

Further, he said because he would give me ~$1M for the flip, he wants me to quit my job to work for him full time (he gave me 48hrs to decide). As he pools together investor's money for the flip, he would also include the value of my current salary in the pool. Essentially, he wants to buy me out of my job using other people's money which is a red flag that he can't pay me himself. I don't want to quit my job without knowing this investor is the real deal. Further, he was making guarantees that I would become a millionaire within 3-5yrs.

I looked at public records on him and found 11 bankruptcy filings from 10-30 years ago. Nothing else since then. He claims to have been an investor for about 3 years; he's flipped dozens of houses, and currently has 30 properties under contract, so those records could be irrelevant. But these records are telling me that he knows how to work the system and isn't afraid of taking people's money then not paying them back.

I was thinking of asking him to do a credit check as well, but how else should I approach this? Why would he be so overly eager to work with an amateur he just met? Should I bring up the bankruptcies? Any other red flags come to mind?

(Note: For more background, I'm a girl in my mid-20s. He kept saying he wants to have a "nice, pretty face" as a fresh spin on his business. Not sure how to interpret this, but it felt a little inappropriate. The trusted person I brought with me was concerned that he would use me and my clean record, and parade me around as his CFO to help fix his tarnished reputation. This risks me losing my securities licenses.)