My latest mulatto in Michigan - from the investor's diary beginning with the discussions that were posted this week ...

My Last Multi in Michigan - Diary of a Beginner Investor

Continuing on the discussions in the forum this week, I would like to share about an investment I made that did not go well, rather a horror.

** The investment I made and the project is in no way related to Raz or Paz Group **, as I wrote before, a rival only tried to help after realizing that I had been cheated with an unrelated investment I had made before we even knew.

The goal in the post is to share and teach from the mistakes I made at the outset, to give emphasis and tools on how to invest and manage more correctly. And don't be scared!

I have seen investments in Multi Families or with a number of investors who have gone great from end to end and have seen such as in my case that are not going and when it does not go the price can be heavy, too heavy.

It all started after hearing some podcasts I researched in depth and thinking that I had learned everything needed, I decided to take a step and make my first investment in a multimillionaire in Michigan. I invested $ 50 in exchange for 5% of a company that owns the building. Sounds simple, a total of 20 investment units / shares, with the developer holding 5% of the company, a total value of $ 800 million. We were told the building was bought for $ 150 and renovations were worth $ XNUMX.

Building between 24 apartments in pretty good condition the main problem was management and was occupied by 40%. The goal was to get 100% occupied for three years and sell profit. The developer pledged a return of 10% a year on a personal level and at his entrepreneurial level, in signed contracts, better than I thought you could not ask for!

I asked to see previous reports and projects done, I saw a large number of projects (which are not yet finalized) I got some excel reports and thought that all things were going well and the entrepreneur with his hand on the pulse, plus there were a few other satisfied investors. I was also assured that someone on behalf of the company twice a month goes to the property and takes a closer look.

Before investing, I had a good look at the area and the building as far as I could but didn't realize how critical it was to understand who the developer was and who the investors I was with and how much damage or success the developer himself could bring to the project.

It was important for me to invest in a cash-purchased project with no bank loans, which is what may have saved me.

The funds began to flow, but for some reason no report, snapshot or update was sent. Actually, nothing from the time the money has passed. The salesman who was in front of me explained to me that the building had reached 90% occupancy and I had only received monthly rent. In retrospect, I realized how much the salesman had no idea of ​​real estate and how much amateur was there. Something was starting to feel weird to me but in the meantime I was streaming.

Over time, I began to get offers for other projects from the same company, with the leverage of millions of banks, I thought someone there was going crazy… A few weeks later I received a letter with a contract to sign him about the possibility of becoming a lender to the General Entrepreneurship, giving up my property holdings and enjoying tax benefits as a lender. It turned on another red light bulb that something here doesn't work out. I refused, and began to ask questions. It could have left me with nothing, and much to the banks and other creditors in the event of bankruptcy of the developer.

Four months from the transfer of the investment money, the rental money ceased, what I did receive was a letter from an accounting firm and a lawyer dealing with corporate recovery, a general letter to all investors explaining that the company and the entrepreneur were getting into difficulties and meeting investors.

More revelations and what I did from there, next week…

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