Stone Equity Group and The Investor's paradigm

[joshuahost]

It would not be possible. I spoke to Danielle, so I know the whole story.

[rumberobueno]

It never ceases to amaze me how some people keep telling you that you are wrong even though you figured out their scheme. Even if you tell them you can prove it they still don't give up.

Maybe the following information still doesn't prove anything to you 

Also check out the post of lori.hemmie in this thread which confirms my findings. You charged this person $23.9K for a house that was selling for $7.5K. Did you sink the difference in rehab costs ?


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Property#1:
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3216 N. College Indianapolis, In 46205
Listing: http://www.americanlisted.com/indiana_14/houses_28/15000_3br_large_house_on_north_college_3216_north_college_14352715.html
Just in case the link will go away in the future here is a summary of the listing:

$15000 / 3br - large house on north college (3216 North College) in Indianapolis, Indiana
Seller:   Date/Time:07 Jan, 05:59 a.m. EST   Type: Houses, For Sale - Private.

Price: $15,000

3216 n college indianapolis, in 46205.
this is a 3 bedroom 1 1/2 bath home. this 2 story home features lr, dr, kitchen, fireplace, hardwood floors.
1485 sq ft built in 1924
home needs minor drywall repair from water damage.
rents in area $700
asking $15,000
zillow.com zestimate $131,500
estimated 5-8 k repairs for minor water damage inside
condition of sale: home being sold “as is” – no repairs will be done.
what a bargain on this large 3 bedroom home.
for more information call 317-348-5412.

Property #2:
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This property originally had two listings, one for $10.5K and one for $14.9K. I can't find the $10.5K listing anymore but here is the $14.9K one. I also have am email from the agent that listed the property for $10.5K telling me that it's still available and I can come and take a look.

http://realestate.yahoo.com/California/Taft/610-lucard-st:58632dbe02bbab6d6dd36f4df7fbb3

610 Lucard St
Taft, CA 93268
 
$14,900
Bed(s): 2
Bath(s): 1
Type: Single Family Home
Sq/Ft: -
MLS Number: 29014828
Age (years): -
Date listed on Yahoo!: January 20, 2010 (37 days ago)

More property detail

Description
WOW! CHEAP! CHEAP! Call Becky to pick up this 2 Bedroom, 1 Bath home in the city of Taft for less than $15,000! Call Becky at 661-342-3058 or 342-3054
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As a result, the following statements that were made by Danielle Oyhancabal (which is your Real Estate Consultant) are false:

1. We only make 1k-2k profit a property. That's hard to believe if you are charging $60K for a property that costs $10.5K even though you rehab the property.
2. We cannot send you properties from existing clients portfolio until you sign up. Obviously the properties that were sent to me are not from an existing client portfolio since they are currently for sale on the open market.
3. The properties are worth at least $20k-$30K more that what we are selling them for (your claims for the various properties vary but that's the general idea). Hey, if that's the case why don't you sell them by yourself and make an even bigger profit ? You use zestimate - which is way off - to estimate the value of a property. As far as I am concerned the property is worth as much as similar properties that are sold in the same area sold for.
4. If we present the property to our clients and gets passed on by two clients we sell it at an auction. You can't do that since the property is not yours to begin with.

You also give a false impression to your clients that you are actually rehabing the properties before you offer them for review which is also incorrect. You are rehabing the properties while they are in escrow.
For proof see Karl K.'s review on this site: http://www.trustlink.org/BusinessProfile.aspx?ID=205956991

So Mr. Joshua Host, just admit it and move on. Oh ... and please stop trying to rip people off.

If you are doing what you are doing it's fine, but expose all the details and let the customer decide if they want to go for it given the information.

Regards,

    rumberobueno

[joshuahost]

Hello rumberbueno,

While I don't know your intentions I always appreciate a good critic. There are some mistakes with your information as I have one property under contract for almost a month and purchased the other over a month ago. As for Danielle's supposed statements I will speak with her but she should not be sharing profit information. Unfortunately because of increased prices we did average around $1k last month after cost of goods sold. This is also why we have had to constantly change our business model because real estate prices and cost of rehab have been soaring as you well know.

610 Lucard St, Taft CA - we purchased this home 1/27/2010 this home needed extensive rehab

1. Yard clean up
2. Landscaping
2. New front/ rear locksets
3. Entire roof replacement
4. 150 ft. facia replacement
5. spot repair siding
6. replace 5 windows
7. replace front door
8. replace garage roof
9. replace garage door
10. seal garage siding
11. Drywall utility room
12. Patch and paint entire house
13. Replace drywall ceiling 1 bedroom
14. replace and repair subfloor in familiy room
15. Need to replace ceiling fixture
16. Need to replace 2 windows
17. refinish kitchen cabinets
18. replace kitchen flooring
19. Patch and paint kitchen walls
20. Repaint bathroom
21. replace bathroom flooring
22. replace bathroom light fixture and wire to switch
23. Install new water heater
24. Replace furnace
25. Update GFCI outlets
26. 10 yard construction debris
27 repaint extior

3216 College we put into contract on 2/01, it needs an extensive rehab.
1. replace 3 ext doors
2. replace entire roof
3. Patch and paint exterior
4. Repair floor and ceiling on porch
5. Patch and paint entire interior walls
6. Patch and paint entire interior ceiling
7. Repair floor on side entrance
8. new toilet
9. Replace 5 electrical fixtures
10. Replace shower valve
11. Replace tub surround
12. Repair furnace


Hopefully this will stop the witch hunt.

Thanks, jph

[rumberobueno]

Joshua,

There are no mistakes with my information.

My main point here is that you are trying to sell properties with a price that is way higher than the actual value of the property. Everything boils down to that. If you think this is not a ripoff there is not much else I can say.

The fact that you included a list of things that you think should be done to rehab the properties is completely irrelevant.

You also did not address the other points that I mentioned in my previous post.

Regards,

    rumberobueno

[joshuahost]

Hi rumberobueno,
I have a question for you, why wouldn't you give Danielle your real phone number on 3 different phone calls with her? I understand you are not a client but we have hundreds of happy, sophisticated clients nationwide that have done their due diligence and gotten a great deal on properties with equity. We have not once marketed or sold properties we don't own. I wish you the best, jph

[rumberobueno]

You still didn't address some of the items I posted in a previous post, but I'll answer your question.

The reason is that I have a prepaid plan for my cell phone and I didn't want her to call me on that phone to carry out a lengthy conversation. She got my phone number when I "reserved" a spot in your program.

I understand you are not a client but we have hundreds of happy, sophisticated clients nationwide that have done their due diligence and gotten a great deal on properties with equity.

The data does not add up and contradicts your statements. It is your word against my money so I prefer to keep my money 

We have not once marketed or sold properties we don't own.

Here is the email about the Taft property that was sent to me by the listing agent. It was sent on 2/19/2010 which is after the date that you claim you purchased the property: 1/27/2010.

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ca house, 610 lucard st.
Friday, February 19, 2010 11:01 PM
From:
This sender is DomainKeys verified
"CS Carroll Enterprises, LLC" <customizedrealestatesolutions@....>
Add sender to Contacts
To:  <email address removed>
yes it is still available.  It is open and you can look at it at anytime.
 
Thanks
SAlly
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At this point I'll stop replying to your posts since I have better things to do in life than to waste any more time on this issue.

Have a nice weekend,

    rumberobueno

[Giuseppe]

Morning REI Club Members,

I will be the first to say that we are not perfect and mistakes happen from time to time, which we go back and fix. I also understand that real estate investing can be stressful because there are so many variables and tenant default is one of the variables. This is a risk of home ownership and part of the down side of real estate investing. Here is a summary of Mr. Sabatini's purchase.

PURCHASE, SALE, POST SALE
In summary the home was purchased by (deleted) for $23,900 and then sold to a land contract buyer for $50,050 within 45 days on 08/01/2009. We emailed the contract on 8/14 to (deleted) along with loan servicing set up docs for a 3rd party loan servicing. The land contract buyer contacted us 10/20 and said that they have been trying to make the  October payments but the account number for the loan servicer is not working. We contacted the loan servicing company and they said that they still had not received the loan setup paperwork from (deleted). Additionally Del Toro would not release the September payment because they did not have paperwork from (deleted). 11/2 We spoke with Jessica at Loan Servicing company and apparently buyer tried again to make payment online but it was kicked out because she entered the wrong account number, we called buyer, no answer, left message. 11/5 Yusuf, a VP at our company flew out and went to home, (deleted)(buyer) was not home, left note. 11/16 Del Toro informed us that the tenant still had not paid so we referred to a local property manager for eviction.

In closing we are disappointed that the tenant defaulted as this hurts our relationship with (deleted)and has now become a public scene. I think its important all readers understand that we don't take financial responsibility for tenant default, and that if this is an expectation than our company would not be a good source of properties. Our clients understand that this is a risk of real estate investing and comes with the territory. At the same time we are always interviewing property management companies to find the best local representation for our clients.

Thanks, jph

As I stated earlier in my only post here, I am not used to post in blogs over the internet, unless there is a valid reason for that. So here I am again, because it still surprises me how some people try to deny the evidence and the facts; 
I want people to know the truth and this is the summary of my experience with SEG:
Stone Equity Group executed a contract to repurchase a property that they had previously sold to me and my wife. This property and the process was not what were presented in the seminar that we attended in May 2009. We were assured by their management that we would be happy with our purchase. Our original contract said that it would be made “rentable to a third party.” One of SEG’s affiliated companies was responsible for finding a buyer whom essentially was non qualified to purchase this property.  This purchaser made only one payment. For this, we were charged $1000.00. Then, this property was sited with 19 code violations by the Akron health department and was deemed uninhabitable. After months of problems, and pressure by the promoter of the seminar Marshall Reddick, SEG agreed to buy back our property. Stone Equity provided us this repurchase agreement and has not followed the terms of the agreement that THEY wrote. The agreement stated that we would receive our refund within 30 days of the executed contract and upon our completion of a signed and notarized quit claim deed. These documents were signed and delivered on December 10th.  Payment in full was due on January 9, 2010. There was no part of the agreement that stated that the refund would occur when Stone Equity group resold the property.
SEG is in default under the terms of their own agreement.
After all these months we haven’t received any money at all, but just utilities and taxes bills. Even with the refund we will still lose approximately $6000.00 in expenses and fees, and more if we have to go to court.  We should not have to go to these measures to enforce their contract! On the resale of this property they expect to profit again.
We do know of other people that have similar problems with SEG and even if we were considering a class action, our lawyer suggested not to, because there could not be enough money to recover for everybody.
Last but not least, I have to mention that I tried to leave a non positive comment (like what happened to me) on some on their “video promotions” on the internet (i.e. “you tube”), and punctually the day after they were overwritten or simply deleted.
That makes you wonder  .....................
and everybody can try it out too.
In conclusion, again,
people do your own research before investing with these guys!

[CAbroker]

Hi All,

Thanks for posting your comments and opinions about Stone Equity Group in this forum. I had visited this forum before and read most of your posts before I made my decision to invest with SEG. I finally made my decision to gave them a try before I can introduce my investors to them. (I am a real estate broker/investor; therefore, before I want to get my investors involve I need to test out for myself first). Here is my conclusion so far: DON'T WANT A HEADACHE...CROSS SEG OUT FROM YOUR LIST. Read on if you have times since I am typing the whole report of my findings here 

Here are SEG's promise for prospective investors:
1/ Property will be delivered in MOVE-IN CONDITION (means rehabbed with new carpet or hardwood floor, operable blumping, electrical system, furnace, roof, etc...)
2/ If you are a Broker, you will get 6% referral fee
3/ If you choose CHOP (Community Homeownership Program) they actively marketing your property to local renters or prospective buyers through land contract
4/ Property deliver to you free and clear of liens
5/ SEG will give you set of professional pictures about property conditions 

HERE ARE THE REALITIES 
1/ I get to property with 35 years old damaged roof, commerical low quality carpet, lousy spotted touch-up paint, busted blumping pipe and meter, rusted furnace with uncertainty of workable condition)-I get this information from one of the prospective buyer who gives me reasons why he would not buy this property.
2/ By closing more than a month, my broker office still don't get any commision check yet (I hope this post will help their printer process the checks faster)
3/ I have to pay and advertise to get buyers myself and transfer the lead to an out of state (not local) agent to schedule showing. (According to the contract with SEG, I have to pay to SEG if there is a buyer move-in but I did not know that I have to do all the leg work and pay advertisement to find leads). So far, I do have more than 20 leads but no one interest in my property because of REALITY #1. Unless, it has to be truely REHABBED!
4/ I got the property with a balance of $395 tax lien. I have been trying to contact but everyone is in silent now.
5/ I get 20 pictures from SEG with very poor resolution.

I had addressed these issues with SEG representative to resolve the matter and I hope they will honor their promises. So far, I get SILENT TREATMENT from them. I will keep you post for any update and if they do not keep their promises, I will send my findings to Mark Mueller (OC Business Journal Staff who wrotes positively about SEG), BBB, all blogs, file a Small Claim Court.

The reason I post this is to make sure potential investors to watch out and for SEG to keep up with their promises or just don't promise at all.

Best Regards,
Tim Nguyen

[justin0419]

I really hate it when my blumping gets messed up too!

[DebEd]

My wife and I became members of the Stone Equity Group Investment Company. We agreed to purchase properties from SEG once rehabilitated became available.  We purchased a property located at 677 Fultz Street  Akron, Ohio.  SEG qualified a buyer thru their Community Home Owners Program. We accepted this buyer not knowing that the property had not been properly rehabilitated. The buyer refused to move in until the repairs were completed.  SEG convinced the buyer to eventually move in with the understanding that the repairs would be completed. It has now been 8 months and the repairs are still incomplete. The buyer has stopped paying the monthly payment. SEG recommended I hire a property management company to oversee this property.  SEG provided me with the name of a management company that they highly recommended as a management company they use for some of their inspections in the area. I hired this company and had them contact the buyer to have them evicted. Once the property manager met with the buyer at the property he sent back a report to SEG and me detailing the inferior refurbishment and stated that the house was in poor condition and could not even pass an inspection from the city. The following is the message the property manager sent to SEG and me.  “There are major issues with this property. Glass is faling out of the windows, plumbing leaking, drywall texture falling off and missing all together, doors do not opperate, chimney leaking and needs flashing, bathroom floor tiles breaking apart and coming up. All these damages are due to poor work by the contractor SEG hired. You have a tenant ready to walk out of contract and an unsuspecting owner that has no clue her property is this bad”. I have worked with SEG to correct the problems, but SEG does not want to make the proper repairs. SEG is ignoring the advice of the property manager they recommended. The property manager submitted a bid to SEG that would correct all of the issues. SEG has never given this bid any consideration as the proper resolution to my issues. I believe that I am now at an impasse on this property and have no choice but to file a complaint

[thejuggernaut]

i worked for stone equity group for some time and personally oversaw the rehab of several homes through out the country. first i want to say that this company does not care about its investors, home renters,chop buyers, or employees. they are and always will be the perfect definition of a slum lord. i performed property surveys and rehab estimates daily and 75 percent of the homes i saw are only worthy of a wrecking ball. despite my best efforts to have these projects turned down S.E.G. still moved foward with rehab. most of the properties i saw would be estimated for repairs in the 10k to 20k range but seg would only approve 5-8k repairs and have us cut corners with the rest. 95 percent of the homes they buy are in some of the worst neighborhoods and cities in the country. investing with this company is a very bad idea. i only hope i can reach enough people and convince them to stay away. these are the same type of people that ran our country into the shitter. they will take your money and screw you over. trust me.


the juggernaut


ps. many of there investor are already sewing them

[belaircorp]

I think you get the picture about "Stone" from the posts. Quite frankly, they spell out why I don't use partners. Why share profits when not necessary especially when you can make a killing by yourself? I would invest that 5K into myself and my education and not put so much trust in letting "others" do all the work for me. You can see the obvious caveat there.  What I want to adress is, although you don't have much time, why don't you learn some investment techniques; make some calls in the evening or hire someone to do it for you and set an appointment or two on the weekend. Flip some properties or lease option some for extra cash to go with your pay check. Trust me, it's the only way to fly. Remember, you never get something for nothing and if it sounds too good to be true, it probably is.  Good Luck with everything!

[xh]

 Let's make some deals and get the money rolling. it's gone on long enough.

I like SEG's current program much better and wish we had done that the first place.

[christopher w]

I think it is very clear what SEG is doing. They are wholesalers doing pass-through closings. I would contact the better business bureau and file a complaint. I know this does not help you, but hopefully it will warn others. Next I would file a fraud complaint with local law enforcement in regards to the real estate transaction. I am not a lawyer and I don't play one on television, but if they indicated to you that they were selling you a property they owned then that sounds like fraud to me.

[mariaescate]

You seem to be very knowlegable on the law. There are lots of complaints out there against SEG not is not being reported on this forum.