# Crowdfunding RE



## JackJac (Mar 13, 2017)

What do y'all think about this crowd funding opportunity from Simple Investor: 

"These 2 buildings, located in Woodstock and Tillsonburg, have a combined total of 86 units. The
buildings are wonderfully situated and are in the process of being converted to condominium for
future release. This offering allows investors to utilize RRSP and TFSA funds as well as CASH. All
methods are secured as a second mortgage and registered on title for security of all investors."

Minimum investment is 100K-500K and the set return is 8% for year one and 8% for year two, plus a 2% lender fee or 5% purchase discount.


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## OnlyMyOpinion (Sep 1, 2013)

Frankly, DUMB and DUMBER!

But I'm sure these property investment/management companies that offer 'investment seminars' and take your money so readily offer a great investment opportunity though right?

Gee, normally when you go to a reputable company website and click 'Management' or 'Meet Us' or 'About Us', you will learn who the principles are, usually even a picture of them and a short bio of their background... But NOT at Simple Investor's site, even though all of those menu items exist. And not at SIREG management's website either.

I worked too hard for my money to ever consider handing it over to these sorts of outfits.


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## JackJac (Mar 13, 2017)

OnlyMyOpinion said:


> Frankly, DUMB and DUMBER!
> 
> But I'm sure these property investment/management companies that offer 'investment seminars' and take your money so readily offer a great investment opportunity though right?
> 
> ...


There are two tabs on the front page that lead to the bio of the founder Todd C. Slater.


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## OnlyMyOpinion (Sep 1, 2013)

Nope. None that work for me. Which tabs?

Added: the name you provided is a real estate broker. Investing in real estate on your own ticket is not that hard. Why does he want your money? and yours, and yours, and yours... I guess he's just an altruistic nice guy that wants to spread the wealth around right?


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## JackJac (Mar 13, 2017)

OnlyMyOpinion said:


> Nope. None that work for me. Which tabs?


There are two tabs on the home page "$imply Real Estate" and "Newstalk 1010" that lead here


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## OnlyMyOpinion (Sep 1, 2013)

JackJac said:


> There are two tabs on the home page "$imply Real Estate" and "Newstalk 1010" that lead here


Those aren't links to a management team or to company principals. They are links to promotional crap. But they do tell us who the real estate agent is drumming up money for himself.


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## JackJac (Mar 13, 2017)

OnlyMyOpinion said:


> Those aren't links to a management team or to company principals. They are links to promotional crap. But they do tell us who the real estate agent is drumming up money for himself.


Sure he's drumming up money for himself, and good for him. My concern: is he drumming up money for investors as well? Why is the opportunity in the OP dumb as you say? I'm sure he would disclose the management team and so forth if you ask and/or set up an appointment with them.


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## OnlyMyOpinion (Sep 1, 2013)

No, he's not "drumming up money for investors". He's selling you on making an investment with your money, and making money for himself in the process. Whether you proift from your money (or leverage) after paying him is beyond his control or care isn't it?

Added: An appointment? I don't think so.

Why is it dumb - because it proposes that you tap into yor RRSP (min $100k) to provide second mortgage financing on apt buildings being repurposed as condos, managed by 'a skilled team'. This at a time when mortgage rates are starting to climb. Comfortable being 'next in line' to get your RRSP funds back? Of course Slater et al have made their money already. 
If you want to invest in real estate you don't need him. In the same way that you don't need to pay a 2.5% MER to be invested in the market. Still, lots of people will do both, which is why the Slatter's exist and why some people never seem to get ahead, or worse yet lose it all.


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## JackJac (Mar 13, 2017)

OnlyMyOpinion said:


> No, he's not "drumming up money for investors". He's selling you on making an investment with your money, and making money for himself in the process. Whether you proift from your money (or leverage) after paying him is beyond his control or care isn't it?


Isn't that basically how crowdfunding tends to work? The key is to find a reputable provider. 



> Added: An appointment? I don't think so.


Well, it appears that seems to say you're not all that serious about having your questions answered..?



> Why is it dumb - because it proposes that you tap into yor RRSP (min $100k) to provide second mortgage financing on apt buildings being repurposed as condos, managed by 'a skilled team'. This at a time when mortgage rates are starting to climb. Comfortable being 'next in line' to get your RRSP funds back? Of course Slater et al have made their money already.


It says you can invest with cash. 



> If you want to invest in real estate you don't need him. In the same way that you don't need to pay a 2.5% MER to be invested in the market. Still, lots of people will do both, which is why the Slatter's exist and why some people never seem to get ahead, or worse yet lose it all.


That generally happens when people crowdfund fly-by-night projects. Do you have any evidence that Mr. Slater is or has ever been involved in shady projects? What does his track record say?


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## OnlyMyOpinion (Sep 1, 2013)

You asked 'what do y'all think'. I've told you what I think. 

I've told you that I wouldn't use my hard-earned money to line Slater's pockets. I didn't suggest he was dishonest. He probably doesn't need to be, to find enough people who are willing to part with their money and take higher risks to 'get richer quicker'. He merely profiits from people's greed.

You are correct, while he markets a 'Simple RRSP and Master Investor Program', he notes that you can use your TSFA or cash funds if you wish. In other words, don't limit yourself to money you can risk, you won't get wealthy without stepping up the risk.

I particularly like this bait that he throws out: _"This carefree life can be yours; all you have to do is maximize your RRSP contributions. Unfortunately, this story is simply that; a STORY."_
Well, not so. He is either mistaken or lying for his own purposes. 

Again, because you asked, he rates as a fully qualified *scumbag* in my opinion.


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## twa2w (Mar 5, 2016)

My opinion is that this guy is either offside with the OSC, or skirting a fine line.
I wouldn't touch this with a ten foot pole. You are taking all the risk AFAICT. The promoters make money whether or not you do.


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## Mortgage u/w (Feb 6, 2014)

The scheme is borderline fraud. This guy must me on every lender and mortgage insurer's black list.

So here's what he's doing:
- he and/or his 'accomplices' invested in old apartment buildings with the intentions to do minimal renovations in order to convert and qualify into condos. 
- now they want their invested money back which they know they can no longer obtain through refinancing. Their lender originally financed an apartment building but now that they changed the vocation of the building to 86 individual units, no lender will finance the buildings as a whole.
- solution: find 86 naive individuals who will act as owners of each unit, thus providing the financing for each one.

So in essence, each unit gets its own owner and mortgage for which pays back the scammer, sorry I mean, initial 'investor'. They make all their money back plus huge profits and pass on all the risk to the new naive investors. They promise you rental income because they will borrow from Peter to pay Paul. Once the cash flow is gone, they will too. They are banking on the fact that you will hopefully rent your unit to be self funded by the end of their scam.

His ad makes me cringe. He is clearly targeting unsuspecting people with minimal savings and no knowledge about finances. Employing simple terms, telling you to use RRSPs or TFSAs or money under your mattress, promising extravagant returns while undermining your current savings returns......anything to get your attention.

His charts look appealing only because the math adds up......but his equation is completely wrong and deceiving.

STAY AWAY and spread the word. These guys are crooks and should be advertised as such!


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## Just a Guy (Mar 27, 2012)

To be fair, I buy similar investments all the time, it's my bread and butter as it were.

The difference is, I buy from the "investors" people like him sell to after they go into foreclosure.

This is a typical legal scam. You buy a building of say 20 doors for around a million or two. You do some minor cosmetic changes and convert it to a condo. You then sell individual condo units to "investors" for let's say an average of 250k each (after all it's a good location, real estate is going through the roof, etc.). Besides, you can rent the place for up to $1500/month and, with current interest rates, and the low condo fees, the place will "cash flow". If you borrow $25k as a downpayment and clear $2500/year profits you make 10% ROI. 

Unfortunately there is no reserve fund, the building is really old, tenants aren't the best, you have vacancies, repairs, condo fees go up, special assessments are common, etc. Eventually the "investors" clue in and try to sell, but no one really wants to pay anywhere near $250k to live in an apartment (notice I didn't call these a "starter home", they aren't they're apartments, places people rent not buy). So eventually, after losing a lot of money, the places go into foreclosure. 

His is where I come in. I buy the places back at apartment prices. Now, because of all the special assessments that are either paid by the "investors" or the bank upon foreclosure, I may pay somewhere around 50-60k/door, and then rent them around $1000. I get on the boards and ensure the building repairs are done, maybe triggering more special assessments and more foreclosures, we get proper property management, we get rid of the bad tenants and turn it back into a respectable apartment which is now worth significantly more than I paid for it, but also significantly less than he initial "investors" did. 

Btw, the "developer" only has to sell a fraction of his properties to "investors" to pay back his loans. He can afford to take a bath on the remaining ones and sell cheap because they are pure profit after the first suckers, I mean "investors" have paid off the property. 

It wouldn't surprise me if this guy was, at some point, a memeber of REIN, this is right out of their playbook.


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## TomB16 (Jun 8, 2014)

Don't forget about the R-E market crash of 2018 that is all but guaranteed to happen.


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## Mortgage u/w (Feb 6, 2014)

Just a Guy said:


> ...His is where I come in. I buy the places back at apartment prices. Now, because of all the special assessments that are either paid by the "investors" or the bank upon foreclosure, I may pay somewhere around 50-60k/door, and then rent them around $1000. I get on the boards and ensure the building repairs are done, maybe triggering more special assessments and more foreclosures, we get proper property management, we get rid of the bad tenants and turn it back into a respectable apartment which is now worth significantly more than I paid for it, but also significantly less than he initial "investors" did....


JAG, do you resell those units or hold on to them because of the good return?

I question the resale because I am sure those buildings are on at least some lenders' radar - and almost certain on all mortgage insurers blacklist. It explains the solicitation with second mortgages/RRSP etc in the OP ad - they know that the traditional insured financing will not pass. Lets face it, your potential buyers can only be speculative investors. Not many will want to buy as owner-occupied. So how do you minimize your risk?


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## nobleea (Oct 11, 2013)

There's a condo walk up that was converted from rentals in a not bad area of town around here. I don't know when it converted to condos, but the building was probably built late 60's. The exterior looks bad but could probably be cleaned up not too hard.
Units are selling for 25-50K for 1BRs. Seems like the kind of scenario JAG is talking about. I don't know what they'd rent for, 800$?


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## Just a Guy (Mar 27, 2012)

Mortgage u/w said:


> JAG, do you resell those units or hold on to them because of the good return?
> 
> I question the resale because I am sure those buildings are on at least some lenders' radar - and almost certain on all mortgage insurers blacklist. It explains the solicitation with second mortgages/RRSP etc in the OP ad - they know that the traditional insured financing will not pass. Lets face it, your potential buyers can only be speculative investors. Not many will want to buy as owner-occupied. So how do you minimize your risk?


I don’t get mortgage insurance, I get conventional financing. The banks have never refused me, but I have heard of them refusing others. Maybe because I’ve got a track record.

Personally, I rarely sell as I’m a buy and hold investor, but the idea does cross my mind every once in a while. 

I generally work with the condos to turn them around and get them running properly, by the time I’m considering selling, the building is probably off any blacklists.


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