In March of our company purchased a home from Start Rehab for $32,000. We put $5,000 down in order to take possession of the home. The house was to be rehabbed by us. Start Rehab was to put an "elderly" person into the house, at which time the "elderly" person was to do a reverse mortgage. They told us they have several elderly people waiting to get in the house.
We were to get approx. 60% of the appraised value of the house at the time of the closing. All this was to take 3-6 months according to Start Rehab. At the time of our purchase, the house was worth $204,000. We understand the market was getting worse, so the expectation of the house value to go down was expected on our part.
After dozens of calls inquiring about where our return is, we kept getting a huge runaround from them. Finally someone told us that it would be 6-12 months before we would get our return on our investment. Everybody in that office is dishonest and is in on the scam. We were very unhappy to say the least, as we could not afford to have this money tied up for so long.
I met with one of their dishonest employees to sign the paperwork which has us being given $92,000 at the closing table, of which Start Rehab would get $27,000 which was owed to them by us.
So now we have a total of $43,000 of out of pocket money hanging out there for over a year. We expected the newly rehabbed house to appraise at about $160,000. We understand the value was going to go down, but that was ok at the time. The house ended up appraising in Aug for $140,000. That is when the reverse mortgage was done. We were never informed of the transaction being completed. They kept telling us it was going to be longer.
That gives us approx. $84,000, minus the $27,000 owed to Start Rehab to complete our transaction. Of course, there were going to be some other closing costs that would incur for us.
Already, we are starting to see that this was not such a good investment for over a year. 3-6 months would make for a nice investment.
Finally, we receive our check. It's for approx $7,000! Greg Bingham who is in charge of this operation told me that it appraised for $75,000. Of course this is all a scam. They gave us ALL the costs of the closing, and still took their $27,000.
Please... Whatever you do, do not get involved with these crooks. You will end up losing money big time. They are probably the most dishonest people I've dealt with in my 48 years on earth. It's a well oiled corruption machine over there.
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