After attending a workshop and boot camp hosted by Lloyd Segal (principal California Foreclosure Institute) I was energized to purchase a Trustee property and FLIP it for a profit. I entered into an Agreement with Lloyd Segal that required a substantial contribution of capital (deposit) paid to a third party ($50,000) to help us identify/purchase a property and also a good faith deposit for Segals services that included managing the venture, coordinating the purchase, renovation and eventual sale of the trustee property.
After working with Segal and the third party company for more than 4 weeks (and not finding adequate properties), it became evident that the amount of capital we had to invest would not be sufficient to turn a tolerable profit upon sale.in fact I was concerned that given all the expenses (that were never clearly delineated), that the project/venture could lose money rather than make money. This was due primarily to the fact that the amount of capital we had to spend on the investment would limit us to poor locations where safety was a concern and to properties that required more upgrade than we had budget to support. After pointing this out to Segal along with supporting analysis, then asking for the return of the good faith deposit, communication went downhill quickly.
The Agreement that was signed didnt specifically have a clause for the return of the deposit but neither did it say or imply that it could be retained.in this type of situation, one would rely on Good Business Practices and a persons sense of integrity, especially since the Good Faith Deposit was only a small fraction by comparison to the $50,000 deposit provided to the third party company.in fact, when asked, the third party company readily agreed to return the $50,000 deposit and did so in a timely manner with no issues. Since the Agreement tied the contribution of capital together with a Good Faith Deposit, would it not seem reasonable if the capital deposit was returned, so should the Segal deposit? Since the capital was never used and nothing was purchased wouldnt it seem logical and reasonable that the deposit be returned? After weeks of waiting for any portion of the deposit to be returned, even after Segal said that he would, I have reconciled that only a court of law would be able to remedy this situation.
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