A third party broker who "specializes" in non profit real estate funding submitted our application for a refinance bridge loan to Atlantic Coast Equity in February. We are a well established non profit in Brooklyn, N.Y. Who serves young adults in college prep courses, GED classes, and job training.
We own a 15,000 sq foot facility and we get great income from our subsidiary non profits and and a medical facility. After our appraisal came in at $1.9M, we applied for a $700,000 bridge loan refinance to pay off our previous loan, which was down to $100,000, and upgrade the facility for handicap access.
The broker sent the deal to Atlantic Coast Equity in which they issued an LOI and requested $3,000. This was for their due diligence and to do a site inspection. At this point everything was running smooth. Since I am a real estate broker and on the Board of Directors for the non profit, we was able to send a complete package to ACE.
They sent a representative to inspect the building and he said that everything looks fine and we also had our contractors to meet him and show him where all of the upgrades were being done. Jim Parent, the CEO of the company promised that we will close within two weeks.
After two weeks, neither our executive director or our attorney was able to reach anybody at ACE or get any answers about the closing. Our broker was starting to act clueless as well. We finally got a Commitment letter to close from Pan American Fund LLC and Dale Woods with exactly the same stipulations as the LOI and now they are asking for $5,000.
I pressured the clueless broker to schedule a conference call to explain these new fees to us. She tells us it's for due diligence, Dale Woods from Pan American Fund states that it was for title work. After I explained to them that our attorney already ordered and cleared title, they brushed us off the phone. Another red flag was that Atlantic Coast Equity and Pan American Fund has the same address in Plantation, Florida.
After several attempts to locate Jim Parent, he is always in a meeting or at lunch, he tells us that he wants his points up front in case we back out of the deal. After I told him that I was a real estate professional with over 15 years experience and that this sounded like a scam, he abruptly hung up the phone.
He never returned our calls ever since. After doing research on the internet, these two companies have several complaints from other clients about the same thing. You do the math, if 20 applicants per month pay $3,000 in LOI fees, thats $60,000 per month. Why ever close a deal?
Unfortunately these clowns have met their match. They have defrauded a youth organization with heavy political connections and on staff attorneys who will work day and night to bring them to justice. We have filed a complaint with the authorities in Florida to stop this madness.
Hopefully more clients will come forward and put an end to this sham that just inconvenienced hundreds of under privileged and handicapped kids.
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