After Two Weeks of Trial, Hilton Head Properties and 'Chase' D. Fonteno, at 10pm on Friday July 17th Were Awarded Over $2.4 million by a Dallas Jury Against MacGyver Finance
Jury Award Also Effectively Proved Statements Made On Slander Site 'Ripoffreport' Were Not True
Tuesday, July 21, 2009
Wednesday, July 15, 2009
Thursday, July 2, 2009
Interesting News Story - a bit one sided...
Well... interesting news story tonite. Quite a bit one sided - but if it was not sensationalism, it would not be interesting...
Channel 11 tried to approach me for over 3 weeks and refused to talk to me except on camera - seeking sensationalism. They would not even advise me or our attorneys what the story was about. Even so - our company provided a number of emails to Channel 11 advising that 'adverse properties' represent a very small part of the company's mortgages. And the company's process is to help turn blighted neighborhoods of vacant, abandon, drug infested, tax delinquent properties by adverse possession into owner occupied homes - for $250 to $325/mo.
Even though the reporter was provided 'considerable' information about adverse possession and the fact we have not purchase a mortgage that was related to an adverse possession in a number of years - the information and that fact were not addressed.
Our company has NEVER acquired a single family property. We purchase mortgages by outside sellers (the associates). The company in which the news story states we 'own' is actually Silverwest Properties - a company owned by Wes Gilliland - the rogue party that we stopped doing business with in 2005 due to horrendous title work done by his company. We purchase mortgages - not homes. And the mortgage servicing company we own - Hilton Head Finance manages a considerable number of mortgages - most of which are not adverse possession.
And the 'anonymous' former employee? Well - not to have issues with slander or libel, a quite educated guess by other employees (and myself) - that would be Michael Davis - who we recently became aware that when we hired him - it was apparently just weeks after he left Federal Prison for 'fraud'. And as of yesterday it 'appears' by bank records our CFO just received - he has fraudulently applied for loans and gotten them under at least one of the associates companies - without any authority of the associate that owns the company. The associate (B. Payne) was made aware of it today and he advised he never authorized 'anyone' to obtain a $9,000 loan against his company (which the bank advised today - Davis signed up for and has now taken the entire loan down without notice to anyone). Payne has advised he is contacting the District Attorney's office for fraud.
As our company made a determination to hire Bob Young back as our CFO about a month ago - in preparation for a large financing the company is undergoing. This appeared to set Michael Davis off - and he began a reign of terror including negative statements to our bank, constant false statements on Twitter and false statements on Ripoff Report (using false names - but admitting it on phone calls to me) and possibly making statements to various state officials that are 'not the full truth'.
Now we know why - a new CFO taking over the accounting oversight from Mr Davis would (and did) uncover the fraudulent loans.
My background of an error I did in 1995 that ended up being a securities violation is a very public thing - because I tell everyone (friend, employee, associate... everyone). It prevents 'gossip'.
As to adverse possession - once we acquired the mortgages, there are considerable liabilities to the company to ensure the homeowners actually get the home - or we have to provide them a home of equal or greater value and better repair status - and we HAVE done that already. We also have just given mortgages to heirs that popped up YEARS later (even though they did not pay property taxes for 2-20 years, did not keep the property in repair status to meet minimum city health codes or even just mow the lawn and keep the property secured.) - We have also purchased a few homes from heirs - always ensuring that the home owners either get title - or get a better home.
Cities and Counties only have so many people to deal with abandon, distressed, tax delinquent, code violation type properties that are a blight on neighborhoods, their values and even the safety of neighborhood children when a property is an open vacant structure (a violation of city code). There are 1,000's of them in almost every major city. More than the City/County can handle by foreclosure (taxes) or demolition (code violations). A drive down just about ANY street in South Dallas - just ONE STREET from beginning to end - you can list over 30 boarded up, abandon homes. Our work in blighted areas of a number of cities - helps convert blighted homes into owner occupied homes. Most by acquisition from the owners by the associate companies - which they then sell on owner financed notes - but under guidelines they have to meet - IF they want us to purchase them. (they own their own companies and can do what the wish - but if not under the guidelines we require - we will not purchase). Then - we purchase the notes and manage them for the entire term of the note - since these individuals AND homes - both - usually cannot qualify for a normal loan. So we help them own a home - just by proving they have a 'real' job (to eliminate drug dealers buying homes).
More on this later.
And we are currently preparing for an audit for a large securities offering we are doing to grow the program into more cities and pay any remaining delinquent taxes. And adverse possession? We have not acquired any new mortgages that are based on adverse possession in over 2 years. And do not have any current plans to do any either - they are expensive due to the prospect of litigation and normal purchases are simply more profitable.
Feel free to contact our company or me anytime you wish. Our office moved about a month ago to:
400 N. St Paul
14th Floor
Dallas, TX 75201
Our phone numbers did not change
214-712-9800
chase@hiltonheadproperties.net
http://www.hiltonheadproperties.net
Channel 11 tried to approach me for over 3 weeks and refused to talk to me except on camera - seeking sensationalism. They would not even advise me or our attorneys what the story was about. Even so - our company provided a number of emails to Channel 11 advising that 'adverse properties' represent a very small part of the company's mortgages. And the company's process is to help turn blighted neighborhoods of vacant, abandon, drug infested, tax delinquent properties by adverse possession into owner occupied homes - for $250 to $325/mo.
Even though the reporter was provided 'considerable' information about adverse possession and the fact we have not purchase a mortgage that was related to an adverse possession in a number of years - the information and that fact were not addressed.
Our company has NEVER acquired a single family property. We purchase mortgages by outside sellers (the associates). The company in which the news story states we 'own' is actually Silverwest Properties - a company owned by Wes Gilliland - the rogue party that we stopped doing business with in 2005 due to horrendous title work done by his company. We purchase mortgages - not homes. And the mortgage servicing company we own - Hilton Head Finance manages a considerable number of mortgages - most of which are not adverse possession.
And the 'anonymous' former employee? Well - not to have issues with slander or libel, a quite educated guess by other employees (and myself) - that would be Michael Davis - who we recently became aware that when we hired him - it was apparently just weeks after he left Federal Prison for 'fraud'. And as of yesterday it 'appears' by bank records our CFO just received - he has fraudulently applied for loans and gotten them under at least one of the associates companies - without any authority of the associate that owns the company. The associate (B. Payne) was made aware of it today and he advised he never authorized 'anyone' to obtain a $9,000 loan against his company (which the bank advised today - Davis signed up for and has now taken the entire loan down without notice to anyone). Payne has advised he is contacting the District Attorney's office for fraud.
As our company made a determination to hire Bob Young back as our CFO about a month ago - in preparation for a large financing the company is undergoing. This appeared to set Michael Davis off - and he began a reign of terror including negative statements to our bank, constant false statements on Twitter and false statements on Ripoff Report (using false names - but admitting it on phone calls to me) and possibly making statements to various state officials that are 'not the full truth'.
Now we know why - a new CFO taking over the accounting oversight from Mr Davis would (and did) uncover the fraudulent loans.
My background of an error I did in 1995 that ended up being a securities violation is a very public thing - because I tell everyone (friend, employee, associate... everyone). It prevents 'gossip'.
As to adverse possession - once we acquired the mortgages, there are considerable liabilities to the company to ensure the homeowners actually get the home - or we have to provide them a home of equal or greater value and better repair status - and we HAVE done that already. We also have just given mortgages to heirs that popped up YEARS later (even though they did not pay property taxes for 2-20 years, did not keep the property in repair status to meet minimum city health codes or even just mow the lawn and keep the property secured.) - We have also purchased a few homes from heirs - always ensuring that the home owners either get title - or get a better home.
Cities and Counties only have so many people to deal with abandon, distressed, tax delinquent, code violation type properties that are a blight on neighborhoods, their values and even the safety of neighborhood children when a property is an open vacant structure (a violation of city code). There are 1,000's of them in almost every major city. More than the City/County can handle by foreclosure (taxes) or demolition (code violations). A drive down just about ANY street in South Dallas - just ONE STREET from beginning to end - you can list over 30 boarded up, abandon homes. Our work in blighted areas of a number of cities - helps convert blighted homes into owner occupied homes. Most by acquisition from the owners by the associate companies - which they then sell on owner financed notes - but under guidelines they have to meet - IF they want us to purchase them. (they own their own companies and can do what the wish - but if not under the guidelines we require - we will not purchase). Then - we purchase the notes and manage them for the entire term of the note - since these individuals AND homes - both - usually cannot qualify for a normal loan. So we help them own a home - just by proving they have a 'real' job (to eliminate drug dealers buying homes).
And we are currently preparing for an audit for a large securities offering we are doing to grow the program into more cities and pay any remaining delinquent taxes. And adverse possession? We have not acquired any new mortgages that are based on adverse possession in over 2 years. And do not have any current plans to do any either - they are expensive due to the prospect of litigation and normal purchases are simply more profitable.
Feel free to contact our company or me anytime you wish. Our office moved about a month ago to:
400 N. St Paul
14th Floor
Dallas, TX 75201
Our phone numbers did not change
214-712-9800
chase@hiltonheadproperties.net
http://www.hiltonheadproperties.net
Sunday, February 1, 2009
How To Own Real Estate - Name On Title
How to Own Real Estate - Name On Title
A few lessons for the new Real Estate Investor:
A. Never Own Real Estate in your personal name: Real Estate Ownership comes with some liabilities:
- Someone can get hurt on it (even if they were not suppose to be on the property). It could even be a bum that was not suppose to be on the property, drunk, fell and broke his arm - and he sues "you". Or even a real estate agent that falls due to a loose brick... You need your name clean always to ensure your credit rating stays high so you can borrow to build your real estate portfolio.
- Or, if someone sues you for some reason, placing the properties you use in a separate entity helps protect them from outside suits.
- As much as you believe in a deal as being risk free or easy profits - Real Estate deals do not 'always' go right. You need to provide some protections on your name if this happens so it does not destroy your ability to get back on your feet and do the next deal right. Keep it out of your personal name.
B. It is Better To Own Real Estate in a Corporate or LLC entity: Build protections between you and the liabilities of real estate.
Holding your investment/rental properties in a Corporate or LLC entity helps protect both you and your property. And it is a good idea to NOT use your name in the name of the entity (like Bob Smith Real Estate) is not a good idea as it makes it easy for someone suing to just name you personally. Do not make suits easy. Give the company a name not using your name. They will have to do some research to find your name and thus less likely to include you in a suit.
Even if you have insurance and other protections - being named in a suit 'automatically' will cost you money - even if you win - because you had to hire an attorney to defend the part about it being you personally.
C. If the property is large - hold it in a separate entity from the other properties:
If the property you intend to own is a large apartment complex or commercial property, it is better to own it in its own entity to:
- Handle the staff payroll separately and taxation on such.
- Handle any investor investment easier as not being part of other deals.
- Easier to handle any lawsuits and protecting other assets from such lawsuit.
- Easier to identify the performance of the property to outside parties.
- Cleaner sale when property is sold, where the financials are not merged with other properties.
Feel free to post questions if you have any, or click on my email at http://www.chasefonteno.com/
'Chase' D. Fonteno
President
Hilton Head Properties, Inc.
1401 Elm St., Suite 3800 Dallas, TX 75202
214-712-9800
214-712-9801 fax
http://www.hiltonheadproperties.net/
http://www.hiltonheadpathways.com/
http://www.sterlingworldpartners.com/
http://www.luxuryhomemanagers.com/
http://www.ibidearth.com/
http://activerain.com/hiltonhead/
All statements in this blog are the personal opinions of "Chase" D. Fonteno
Chase Fonteno
Monday, February 11, 2008
Sub-prime crash era opportunities
Before I start let me say two things. 1. I have never posted a blog before... this is absolutely the first. 2. I am NOT selling ANYTHING HERE. I do very well for myself and it won't hurt me a bit if you did the same thing I do - and even competed against me on some deals. Somewhere - if this information motivates you - we will probably do something together... almost every one I have ever told how to do this has ended up doing some form of a deal with me, or we traded ideas - so we both win. And it appears a blog is a great way to do that on a larger scale...
So...
While continuous hysteria over the sub-prime crash continues to drag on... there exist opportunities in a segment of real estate investing that in 30 years has never seen a down market and actually, if you invest properly, has a considerable upside during the current sub-prime debacle. What sector is that? That is better answered with a few questions...
What type of property 'always' goes up in value?
What type of property - if you sell and have to foreclose - is 'always' in better condition when you get it back, than it was when you sold it?
What type of property regularly confuses the pros as to its true value (literally leaving real estate professionals giving values assessments that often are over 300% from one another)?
It is the property - you steal ! (legally and ethically of course...)
But wait... you are probably thinking $100,000+ homes? expensive apartment complexes? land? nope... I am talking about property you would never want to 'ever' show your friends and family... its ugly... it is bad... forgotten... but, it will keep you buying your friends and families dinners forever - so let them envy... just don't show them photos...
Oh - and we don't fix ANYTHING !! EVER !
Would you believe me if I told you that in 2 short years I acquired approximately $7 million in real estate for approx. $1.5 million, used only about $10,000 of my own money - oh and...
I never went out and borrowed any money to do it?
But I do have a lender... he just does not know my name...
I never applied for a loan... I never asked for the money...
I never talked to anyone to get it...
And the terms of the loan are what ever I want them to be - each month...
We acquire abandon, forgotten homes (in large quantities now) all over the country - in low income areas. Why low income? Scary? Well hold on. Lets see... what real estate agent would want to sell homes in the $20,000 to $40,000 range when they can be in a nicer area of town and sell the same quantity of homes - but they are in the $100,000 to $200,000 range (or higher) ? Well - that presents a problem for low income areas. You see - appraisals are done by appraisers who depend LARGELY on comparable property sales values on MLS (Multiple Listing Service) used by all agents to list properties and announce the final sale price. If there are no agents doing business in a particular area - what is the value? You think I am kidding? I most certainly am not. In fact there have been times I ask other dealers I know, if they are selling their house in a low income area - even if they already have a buyer - to proceed to list it anyway with an agent and pay a low commission - just to have it reported on MLS to help with comps when I am trying to do financings. And I do the same for them at times.
Ok - so lets take a typical low income neighborhood home... 3 bdrm, 1 bath, no garage, 1,200 sqft. Delinquent property taxes of ? $3,000 that is probably 7+ years (no, I ma not kidding). If it is boarded up, chances are the owner died and his children had no money to pay taxes or repairs - so they just left it and finally the city boarded it up to keep vagrants out of the area. So values? Buy it for ? $5,000. Paying the Seller $2,000 (on a note of course with $300 down and $100 month - he's happy, he was going to lose the property anyway to taxes) Real value? maybe $10k to $15k as is. Needs broken windows replaced, exterior scraped and painted, new front door, roof repairs, plumbing repairs, elect. repairs, etc... But of course we are not doing to do any of those... And when the work "is" done (by someone else) the property is worth ?? $45k to $55k. So, we well it on an owner financed note - $500 down, fix it yourself. No credit check - your job is your credit. And prove you have the money to pay for materials and you have the ability to do the work yourself. (did I just turn a buyer into a rehabber?)
Now - at $500 down, $350 month, no credit check, owner financed, fix it yourself. Trust me - they will beat down your door to finally own a home and quit renting...
So - you just paid out $300 to buy it and $100 month (for? 12 months?) [then you start paying on the delinquent taxes every month of $100/mo until paid - 35 months?].
You sold it for $500 down and $350 monthly (for ? 15 years?).
You just cleared money up front... and make $250/mo for 4 months - then you get a raise (purchase note and delinquent taxes paid off) to $350/mo.
Oh - and since they are 'buyers' and not renters - they pay the current taxes as they come due. They pay repairs. They pay utilities. They pay insurance. AND - they pay you.
If they do not pay as required - well... you foreclose (give them some leeway - maybe 6 months of delinquency before you foreclose. Don't forget 'they' renovated that home. At foreclosure, 99% of the time you end up with a home in 'much' better condition than when you sold it the first time. Why? It was un-livable at first and the buyers cleaned, repaired and made it livable... now you have a better home... and you do what? Sell it for more money the 2nd time. Usually $5k to $15k more.
Now that means I acquired a home for $5,000 and sold it for ?$30,000 and maybe gave the owner $2,000 in a Home Depot or Lowe's credit card. That 'equity of $25,000 you just created along with a 15 year payment of $250/#350 (10% to 11% owner financed note rate) is a pretty substantial prize - and the guy in the house is only too happy you sold him his first home - which he must work on before he can live in it
Yea - you are doing the match. 5 years (60 months) of payments of $250.00 and the balance of 10 years (120 months) at $350.00 is $57,000 in total payments (this includes the interest).
So - if you did that just 30 times (I did 60 in one year), you would have an income of between $7,500/mo to $10,500/mo. And once you are there - you do not work for it anymore and it comes in for 15 to 30 years.
Oh - and no affect by the Sub-prime era issues... other than... lower prices to us to buy In fact - subprime crash is quite an opportunity to learn.
So quick math again... If you buy for $350 down. And sell on $500 down. And time frame between buy and sell is less than 30 days (very typical) - and you are clearing $3,000 a year ($250/mo) - what is the rate of return? Kind of hard to figure since you only had your investment in the property for less than 30 days... but lets use the $350 you paid down. And you are earning $3,000/yr. That is a 857% annual return on your investment (at the $250 net per month).
Guaranteed. Or you resell the house. For more money. And you are investing in the stock market why???
And if delinquent taxes are your financing source - do you really need capital financing?
Oh - and when sub-prime crashed, lots of those that do sub-prime deals with 'bank' financing lost their way of being able to do those deals...
More for you...
Time to change your strategy...
Chase Fonteno
So...
While continuous hysteria over the sub-prime crash continues to drag on... there exist opportunities in a segment of real estate investing that in 30 years has never seen a down market and actually, if you invest properly, has a considerable upside during the current sub-prime debacle. What sector is that? That is better answered with a few questions...
What type of property 'always' goes up in value?
What type of property - if you sell and have to foreclose - is 'always' in better condition when you get it back, than it was when you sold it?
What type of property regularly confuses the pros as to its true value (literally leaving real estate professionals giving values assessments that often are over 300% from one another)?
It is the property - you steal ! (legally and ethically of course...)
But wait... you are probably thinking $100,000+ homes? expensive apartment complexes? land? nope... I am talking about property you would never want to 'ever' show your friends and family... its ugly... it is bad... forgotten... but, it will keep you buying your friends and families dinners forever - so let them envy... just don't show them photos...
Oh - and we don't fix ANYTHING !! EVER !
Would you believe me if I told you that in 2 short years I acquired approximately $7 million in real estate for approx. $1.5 million, used only about $10,000 of my own money - oh and...
I never went out and borrowed any money to do it?
But I do have a lender... he just does not know my name...
I never applied for a loan... I never asked for the money...
I never talked to anyone to get it...
And the terms of the loan are what ever I want them to be - each month...
We acquire abandon, forgotten homes (in large quantities now) all over the country - in low income areas. Why low income? Scary? Well hold on. Lets see... what real estate agent would want to sell homes in the $20,000 to $40,000 range when they can be in a nicer area of town and sell the same quantity of homes - but they are in the $100,000 to $200,000 range (or higher) ? Well - that presents a problem for low income areas. You see - appraisals are done by appraisers who depend LARGELY on comparable property sales values on MLS (Multiple Listing Service) used by all agents to list properties and announce the final sale price. If there are no agents doing business in a particular area - what is the value? You think I am kidding? I most certainly am not. In fact there have been times I ask other dealers I know, if they are selling their house in a low income area - even if they already have a buyer - to proceed to list it anyway with an agent and pay a low commission - just to have it reported on MLS to help with comps when I am trying to do financings. And I do the same for them at times.
Ok - so lets take a typical low income neighborhood home... 3 bdrm, 1 bath, no garage, 1,200 sqft. Delinquent property taxes of ? $3,000 that is probably 7+ years (no, I ma not kidding). If it is boarded up, chances are the owner died and his children had no money to pay taxes or repairs - so they just left it and finally the city boarded it up to keep vagrants out of the area. So values? Buy it for ? $5,000. Paying the Seller $2,000 (on a note of course with $300 down and $100 month - he's happy, he was going to lose the property anyway to taxes) Real value? maybe $10k to $15k as is. Needs broken windows replaced, exterior scraped and painted, new front door, roof repairs, plumbing repairs, elect. repairs, etc... But of course we are not doing to do any of those... And when the work "is" done (by someone else) the property is worth ?? $45k to $55k. So, we well it on an owner financed note - $500 down, fix it yourself. No credit check - your job is your credit. And prove you have the money to pay for materials and you have the ability to do the work yourself. (did I just turn a buyer into a rehabber?)
Now - at $500 down, $350 month, no credit check, owner financed, fix it yourself. Trust me - they will beat down your door to finally own a home and quit renting...
So - you just paid out $300 to buy it and $100 month (for? 12 months?) [then you start paying on the delinquent taxes every month of $100/mo until paid - 35 months?].
You sold it for $500 down and $350 monthly (for ? 15 years?).
You just cleared money up front... and make $250/mo for 4 months - then you get a raise (purchase note and delinquent taxes paid off) to $350/mo.
Oh - and since they are 'buyers' and not renters - they pay the current taxes as they come due. They pay repairs. They pay utilities. They pay insurance. AND - they pay you.
If they do not pay as required - well... you foreclose (give them some leeway - maybe 6 months of delinquency before you foreclose. Don't forget 'they' renovated that home. At foreclosure, 99% of the time you end up with a home in 'much' better condition than when you sold it the first time. Why? It was un-livable at first and the buyers cleaned, repaired and made it livable... now you have a better home... and you do what? Sell it for more money the 2nd time. Usually $5k to $15k more.
Now that means I acquired a home for $5,000 and sold it for ?$30,000 and maybe gave the owner $2,000 in a Home Depot or Lowe's credit card. That 'equity of $25,000 you just created along with a 15 year payment of $250/#350 (10% to 11% owner financed note rate) is a pretty substantial prize - and the guy in the house is only too happy you sold him his first home - which he must work on before he can live in it
Yea - you are doing the match. 5 years (60 months) of payments of $250.00 and the balance of 10 years (120 months) at $350.00 is $57,000 in total payments (this includes the interest).
So - if you did that just 30 times (I did 60 in one year), you would have an income of between $7,500/mo to $10,500/mo. And once you are there - you do not work for it anymore and it comes in for 15 to 30 years.
Oh - and no affect by the Sub-prime era issues... other than... lower prices to us to buy In fact - subprime crash is quite an opportunity to learn.
So quick math again... If you buy for $350 down. And sell on $500 down. And time frame between buy and sell is less than 30 days (very typical) - and you are clearing $3,000 a year ($250/mo) - what is the rate of return? Kind of hard to figure since you only had your investment in the property for less than 30 days... but lets use the $350 you paid down. And you are earning $3,000/yr. That is a 857% annual return on your investment (at the $250 net per month).
Guaranteed. Or you resell the house. For more money. And you are investing in the stock market why???
And if delinquent taxes are your financing source - do you really need capital financing?
Oh - and when sub-prime crashed, lots of those that do sub-prime deals with 'bank' financing lost their way of being able to do those deals...
More for you...
Time to change your strategy...
Feel free to post questions if you have any, or click on my email at http://www.chasefonteno.com/
'Chase' D. Fonteno
President
Hilton Head Properties, Inc.
1401 Elm St., Suite 3800 Dallas, TX 75202
214-712-9800
214-712-9801 fax
http://www.hiltonheadproperties.net/
http://www.hiltonheadpathways.com/
http://www.sterlingworldpartners.com/
http://www.luxuryhomemanagers.com/
http://www.ibidearth.com/
http://activerain.com/hiltonhead/
All statements in this blog are the personal opinions of "Chase" D. Fonteno
Chase Fonteno
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