Freedom Through Passive Income

Ep 352 - Real Estate Fraud Rears Its Ugly Head

December 18, 2022 Flip & Dani Robison Season 1 Episode 352
Freedom Through Passive Income
Ep 352 - Real Estate Fraud Rears Its Ugly Head
Show Notes Transcript Chapter Markers

We saw a friend of ours, posting a couple of articles about real estate fraud. One of them that we read was the Twin Cities house-flipper, who is facing nearly five years in prison for investor fraud scheme. So we thought we’d share our thoughts on this situation and how this could serve as a wake up call for investors out there.

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We want to talk about the importance of having a great team around us when we make investment decisions. We read an article about a Twin Cities house-flipper who faces nearly five years in prison for an investor fraud scheme. The allegation is that she borrowed money from investors under false pretenses. As we shared with you yesterday, situations like this are why when you invest, you need to have a great team around you.  For our investors, it means, helping you understand your goals even before we talk about any available investment vehicles and having our team always at your disposal to help answer questions. All of us, who are interested in real estate investing, we must be wary of shady deals and charlatans who promise too good to be true returns. There will always be people who look to take advantage of the less savvy investors or those in vulnerable positions. Please reach out to us if you have any questions about a potential investment, even if it is not with us, we are happy to answer any questions. Warren Buffet said, “Only when the tide goes out, do you discover who's been swimming naked.“ To us that should mean that when economies or markets change, the real investors will be revealed because they know how to navigate a downturn or different market cycle. During these times, the fraudulent investors, the SBF’s of the world will be discovered. This is why we are launching a course in 2023 where part of the curriculum will educate you on how to avoid not only poor investment choices but poor investors. We want everyone to understand their investment options and how to choose the right team to partner with whether you want to be a private lender, turnkey investor become part of a syndication deal.

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Hey everybody! Flip and Dani here, founders of the Freedom Real Estate Group Family of Companies. And welcome to another episode of our podcast, which is called Freedom Through Passive Income. That's right, and welcome to another episode. Oh, this is a juicy one. I like this one, this one is called "Real Estate Fraud Rears Its Ugly Head". Yeah, so I was on Facebook just taking a break from work. And I know that we talked about this, shouldn't take breaks by looking at Facebook, but habit popped on. Guilty! And I saw a friend of ours, posting a couple of articles about real estate fraud. And so I wasn't able to read the article, one of them but the one I did read was a Twin Cities house-flipper, is facing nearly five years in prison for investor fraud scheme. And the article essentially, I'll let you read it. This is fresh, right? This is December 9 2022

Yeah, and I don't know what it is, there's some things you'll read that you'll automatically instinctively think that wow, this guy is such a piece of crap. You know, I can't believe this guy is doing all this and so I'm reading this Twin Cities house-flipper faces 5 years in prison. Yeah, he deserves it. Then it says, Suzanne Griffiths, oh!? She deserves it. I don't say that very often. So she's 46, she's been sentenced to 58 months in prison. And for those of you keeping score at home that is two months shy of five years. Yeah. Just think of five years, what's happened in the last five years and then followed by two years of supervised release, and ordered to pay. Holy moly. Oh, that's a lot of cheddar, $1.6 million in restitution for defrauding multiple clients from 2018 to 2020. Yeah. She frequently made misrepresentations about the status of real estate projects, failed to take promised action, falsified documents and misappropriated investments. Yes. Wow.

Yeah. Wow is right. So I actually timed this episode to be after yesterday's episode on purpose, because we talked about the fact that the type of investment vehicle you choose is not as important as, and the answer was the team. Right? Your team, that's right. Who you invest with makes all the difference in the world from your money being lost. In the article, because you gave the highlights there. In the article, there was one deal where she borrowed $100,000 from one person and $70,000 from the other person. And my assumption is, these are newer investors who don't know how to protect themselves. And one of the things that we do when we have investors on properties is we talk to you about how to protect yourself, like, we're like the ones going, don't get, you know, cheated, don't lose your money, like this is about investing with the right people, and don't invest with us until you're comfortable with us. Like we're very, very adamant about teaching, educating and making sure that hey, once you once you invest with us, then you know, you're gonna have this experience, and then you can invest more, right? Start small, there's lots of things that we do with our clients, and investors. 

And we view them really as partners in deals. Even though legally, we don't say that because, well, you can't say that if they're not a real partner, and you know, as part of an active role in the real estate, but from a mental standpoint, we view them as partners, right? We're doing this together, we're building together, it's a win-win relationship, and we will make sure that you're protected. And we've talked over and over again about we will lose money before we will allow our private lenders to lose money, and we've done it over and over and over again. Because we don't want something like that. I don't even want somebody saying, you know, Dani came back and renegotiated what she owed me. She said she was gonna do this, but then she did this. I don't even want that. I certainly don't want to pay $1.6 million in restitution and have to go to jail for almost five years and just ruin my entire reputation and down with that probably the business falls too, right? 

It just so many people are short sighted, right? Why would you do something like this for? Let's just say that, you know, she spent that $1.6 million, right? $1.6 million is not worth five years in prison. It's not worth ruining your name. You know, the hard work that it takes you to make way more than $1.6 million that you can be prideful about, that you can know that you helped other people achieve things too. I just don't get it. But the point of this podcast really is to go. If you are a private lender, if you are investing with other people, you better vet them, and you better know who you're handing your money over to, and you better know how you are protected in the transaction. So I'm gonna let you, I could rant about this forever. So I'm gonna let you talk.

Yeah. They always say, you know, spend your whole life building your name. And when one small little action, just destroy it all. That's right. But it reminded me of a, when we first got into the turnkey business, you know, what we want to do is we want to look at the other turnkey companies out there, see what they're doing? How do we do what they're doing, but do it better? Yeah. And, and like, shortly after we started, there was a turnkey company, that the guy was selling all these houses, and the houses didn't exist, you know, or like, they would sell a house, the house had burned down, and they'd close on the house. And then they kept telling them that they're working on the house or whatever. And then all of a sudden, these investors decide to start driving by their houses that they own, you know, because they're out of state investors. And so they fly in that town where their houses and they drive up, and there's no house there. And I haven't looked because I had never, I hadn't even thought about this guy in forever. So I don't even know what the status is on this. But I do know that when this happened, he flew to Portugal to "take care of his health". Talk about you know, again, and just if you think you're bigger than everything, you know, you're wrong. Yeah. You're gonna come out, you're gonna get caught. You know, it's, yeah, some people I tell you. Here, I read about all this guy. And I'm like, That's all we got to be better than that. What?

Yeah, so if you have not listened to episodes, where we talked about being a private money lender on a property, and we talked about the process and how you're secured, how you protected, then, AJ, if you could add the podcast link, in the description, on the YouTube screen, wherever so that people can just click and push over to it if they want to learn all that. We go into great detail on the phone about this type of thing. So that you know what you're getting and you know, how you're protected and what to look for, what questions to ask, we give you our team's phone numbers, there's a video that I did with an attorney, our CFO at the time that, actually he was our CPA at the time, he turned into our CFO, one of our private moneylenders, a custodian who deals with, you know, retirement accounts. And I asked them all the questions that people usually ask me so that people could actually hear, and then I put their names and their phone numbers and everything on there going, hey, you can just call these guys. They've been working with us for a very long time, and they know us. And you can ask them every quite like, you should have that type of transparency and the person, the team that matters just, so so so very much. So if you want to go back to that podcast and listen to it, you're going to hear a lot of great stuff. 

And then we're actually launching a course in 2023. And part of the goal behind that course is to again, help educate people how to avoid situations like this. And like I said, yesterday's episode really hit on the biggest thing, and that's, you know, who, who, who are you investing with? What does their team look like? And then there's a Warren Buffett quote, Flip that I'm gonna let you say, because I loved it. And I added it to the bottom of this episode, because it's perfect and so true. I was like, I need to remember a Warren Buffett quote, what the? The quote is, Only when the tide goes out, do you discover who's been swimming naked. Yes, and this is a, I wrote it down because I was falling the thread of all the different real estate investors going, this is just sad, you know, and this is what brings fear, you know, into people. And I don't think it should bring fear, I think it should bring wisdom, right? Of knowing who you're investing with, right? Of knowing the answers to the questions that we're talking about here. 

Because yes, when economies change, when markets change, then the tidewater starts, you know, showing who the real investors are, who are the ones that are gonna last, who are the ones that know how to get through, you know, a downturn or a different market cycle. And it's not the new investors. It's not the fraudulent investors, right? You start seeing all those true colors. And, you know, that's a good thing, right? You got to weed them out. So I'm glad that she was caught, I'm glad that she is going to have to pay those investors back because some investors, unfortunately, are not as fortunate. And you and I know somebody local in the Ohio area who has taken a lot of money from a lot of people. And we keep hearing that the hammer is coming down on this person as well. Yeah, yeah, yeah. And it's not like I want to be there. I've not been watching for the hammer to come down. I'm not that type of person. 

But I had many times, we created this, you know, personal experiences list that gets posted. And I'm sorry, this is long. But we'll end with this, we created this personal experiences list because we wanted to share, hey, here's all the people that have cheated us. And if they cheated us, it was because we were in a learning phase. And we didn't know how to protect ourselves. They taught us how to protect ourselves better. So thank you. And here, I'm going to give you their names so that you don't get cheated. And so that you can learn and this guy is on it. So we're doing our best to try and protect investors. And you know, that's all we can do. But, you know, hopefully, you know, this person is, you know, brought to justice too and I hope that his investors get paid back. That's right. That's right, exactly. 

Well, we hope you enjoyed this episode. Make sure you're heading on over to our website, to join the investor club. Make sure you're joining there, talking to Ben and or CJ. We still got a lot of stuff going on, no matter what time of year it is, just happened to be the end of this year. 

But make sure you're checking us out on all the social medias and we'd like to end all of our episodes with Invest Smart, Live Happy. Bye everybody!

Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed, all investment strategies have the potential for profit or loss.

Transcribed by

Welcome to our Podcast!
On today’s episode, Flip and Dani talked about
Twin Cities house-flipper faces 5 years in prison
Who you invest with makes all the difference in the world
We view investors as partners in deals
Many people are short sighted
Selling houses that don’t exist
We go into great detail about your safety
We’re launching a course in 2023
Showing who the real investors are
Personal experience list
Join our Freedom Investor Club
Make sure you follow us on all our social media platforms!
A motto we live by... Invest Smart. Live Happy.