We met Louis Plummer, owner of Blue Collar Group (BCG), at a business Expo around August or September. We owned local real estate and were interested in diversifying.
After several months of being approved (January) and then not approved, we were finally approved for three houses (August). We closed one and a month later we closed another. The third never closed and we were never told why (after several requests). All three in Detroit.
Louis Plummer had a network in Detroit that he used. Contractor, Mortgage broker, Property Management Co... He touted that this was the key to his success - his network. His selling point to us is that he provided a very good product. Good homes. He stressed this.
The lure was these were foreclosures which had been rehabilitated with HUD money.indeed, I have never been able to confirm that they were rehabbed. But that is what we were led to believe. When I looked them up, I found that they had originally sold (a few months earlier) for about 20k less than what we got them for. But the mortgage was low and they were TENANT OCCUPIED. These were marketed to us as turnkey properties. On paper they had positive cash flow (about 250/275 a month). As soon as they were closed the property management co called us to sign a contract to manage them for us (August 4).
On the first property, almost immediately after closing (11 days), we began getting e-mails regarding repairs that needed to be made. Wait aren't these rehabbed? At first Louis took responsibility for the repairs that needed to be done, but after (6) months of claiming the repairs were almost finished, we got hit with estimates for work that we were told had been done, that was in fact NOT done. For 5 months it was, They are almost done, The repairs will be finished this weekend, I'll take care of this, etcAt one point he also said I will be sending you a check to offset some of that. That is confidential between you and I. [the contractor] is on this to get it done. A check? This is a warranty item isn't it? Last week it was a warranty item. What changed? Needless to say, no check was ever sent. Worse, we were told that the tenant was not paying rent until the repairs were done and a judge had sided with the tenant. We paid it out of pocket. The tenant still didn't pay and was eventually evicted. So far we are in the hole with this TURNKEY Property about $11,000. After 6 months.
On the second property, the tenant never paid a dime in rent. Remember this was also turnkey. When I requested a copy of the lease I saw that it had in fact been signed by the tenant and someone named Jon Scampton He signed on behalf of H & A investments as the landlord. Jon Scampton was the guy who sent us loan applications a few months earlier. What is the mortgage broker doing signing leases on properties he was also marketing? There was only minimal info on the lease. No security Deposit and no rental application. When we tried to get info out of Jon Scampton, he shot back that the Drivers License and Social Security number were on the lease. Good Luck! We were referred to a private investigator. The lease had little information on it. Nobody seemed to have contact info on ANYONE. And NOTHING from Louis Plummer.By now the tenant owed $2400 in back rent. We paid to have them evicted but they left on their own and they left $6000.00 in damage. We are in the hole with this one about $10,000. The property management co did get a new tenant for this one, but they have only paid one month rent since February 09 (it is June 09). And now we get an e-mail that it needs $5300.00 in repairs
Since late August 08 til mid June 09, we have paid $7500.00 in mortgages, have spent about $7300.00 in repairs and eviction expenses, are looking to spend another $5500.00 in more repairs. We have received right around $2000.00 in rents (on two properties in 10 months). So far we have lost about $17,000.00 on these two properties. Thank goodness we didn't close on the last property.
And this is not our only dealing with him. A year ago we made a hard money investment with him ($2000). Thank God we didn't send him the 10K we had originally intended. It matured in March 09. My wife contacted him a month in advance to notify him that we were not going to roll it over and we wanted the money. At first it was "Absolutely, checks will go out at the end of the month (April 09)". Then, as is VERY common with him. Silence. One e-mail April and one in May. Prompted by us. And certainly no check. The first week in June when I sent him a text message. Where is our check? His response? Checks will go out at the end of the month (June).in early June when I pressed him he said deals were closing that week. Today (Mid June) he texted me that he is closing some deals this month and some next month (July). I am assuming he is telling me that some are closing next month so I can brace myself that I might have to wait until July.
Louis Plummer got us these properties; AWFUL properties; loser properties and does not back them up. Rather he promises that he will take care of it but NOTHING ever happens. At one point (and I have the e-mails to prove this) the repairs were supposedly done. We sent him $2k a year ago. The contract says it matures on 3/10/09. But this means nothing to him. We'll get it when we get it. I am very interested in hearing similar experiences.
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