Marshall Reddick Real Estate Network Sued for Fraudulent Home Sale Investment Enterprise

Jul 19, 2007 | Posted by: roboblogger | Full story: Real Estate Investing For Real Blog

Well known amongst real estate investors, Marshall Reddick and the Marshall Reddick Real Estate Network is under a bit of scrutiny today after being sued for fraud. via Real Estate Investing For Real Blog

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Al Kwhaja

Los Angeles, CA

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#1
Jan 3, 2008
 
Investors supposed to get good price and positive cash-flow. Well, both are pitched in by Marshall Reddick Real Estate Network (mrren) also known as MarshallReddickSeminars.com . But the truth is far from it in my experience. I bought three properties through the network and six properties myself, all out-of-state. Comparing, I can prove that through Marshall Reddick Real Estate Network, I have paid thousands of dollars more and with poor cash flow. The cash flow presentations on each property through the Network are only ideal to entice investors into buying - they do not include vacancies, repairs-paint-gardening, Management set-up fees, lease re-negotiating fees, repair fees, lower rent due to specific location, free rent incentives etc.. This means few hundred dollars negative cash flow every month. I also purchased through the network in a bad location via webinar, I suffered vandalism in the vacant property after the HUD purchase and after the $16500 repairs to make it rent ready. When I flew to the house to meet the Manager, he came with handgun strapped on his shorts, which scared me to see what kind of crime ridden the neighborhood might be. The property is still not rented for over two months. Un-listed Atlanta property belonging to an Attorney sold by Premiere South Realty through Marshall Network is coming at the price of what I paid just 18 months ago. No return calls by them or lender on so high appraisal 18 months ago. I wished I had flown before making offers to avoid these horrible outcomes on all 3 properties I purchased. In short, buying though the Network is costing me thousands of dollars with lousy customer service from agents during sale and afterwards by the management company, and suffocating my investment with vacancies and charges.
x employee

Harbor City, CA

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#2
Dec 30, 2008
 
I use to work for Marshall Reddick and that company only cared about themselves.. if you did not have money to a mortgage you were an out sider. They treated you like crap. Well because I work there over a year and did not invest I got fired and long with all the people that did not invest. I had to be there on most of the events and heard what Marshall Reddick stand for and all I had to do and still did not trust them with any of my money.
Cheryl

Los Angeles, CA

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#3
Jan 24, 2009
 
I invested in a property in N Carolina. Heritage House
Promises of great $ return. We cannot sell it and we cannot get it rented! It has not been rented out for almost 2 years..

If anyone invested in NC and had problems please email me Funwithhorse@yahoo.com
John

Gardena, CA

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#4
Feb 6, 2009
 
Wife bought 20 houses through Marshall Reddick. Without a doubt, the worst thing that has ever happened to us. More than half now in foreclosure. We are contemplating bankruptcy. We are being sued by banks. Renters come in for a year, then vacate, mark the walls, wreck the carpet, leave their garbage in the garage. One house was busted into by cops -- the occupants had 500 pounds of pot.

Then the prop manager and maintenance people want to charge you 5K to clean up the mess when I could do it myself for $1000. Gross incompetence in some of the property managers MRN set us up with.

The whole problem with Marshall Reddick's philosophy of real estate was that -- in the 2005-2008 market, any person of income and integrity already had bought a house for themselves at the low interest rates that were offered. Who the heck is left? People who have no credit and weak income. There are no quality renters available in the market. As a result, there is high maintenance because they trash the house, and then once unoccupied, a house can go unrented for months. Property managers have hundreds of houses they are trying to rent the same as yours. The only way to circumvent that problem is to dump the prop manager and get out there and rent it yourself.

Marshall set me up with a condo-hotel room in Hawaii which is an absolute disaster...the manager/operator is now being sued right and left for resort properties all over the islands...it's all a scam, protected by corporate shell. The maintenance fees have gone through the roof making the entire mortgage impossible to afford.

I am convinced the real criminals in our society aren't on the streets. They're in the boardrooms.
Wayne

Winnetka, CA

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#5
Mar 25, 2009
 
I'm a commercial real estate broker. I went on a tour in Phx, AZ, but didn't buy. At first I was second guessing myself, but common sense kicked in and I decided not to. I know that you can't really get rich investing in single family homes unless you own a ton of them, everything goes right, they stay rented, and you sell at the peak of the market. Then you make money, otherwise, you lose money. Single family homes (SFR) is either feast or famine. It's either 100% occupied or 100% vacant. The basic principal of "economy of scale" isn't present in SFR investing. Plus, you do all that work for either a negative cash flow or for $50 or a few hundred bucks a month positive. You bought yourself a JOB!
And Marshall Reddick advocated paying full price for the properties. My goodness! I had a hard time getting that thru my brain and I rejected the idea. I bought a home in 2005 at the height of the market (to live in) for $30K less than what the sellers were asking, plus I got a commission for about $6K, plus the seller paid all of my closing cost which was another 6K, and I got my 1K deposit back at the end of escrow. I pulled 29K out of the property 1 yr later, I still live there, I paid $0 dollars to buy it, and I'm upside down in value, but who has the risk now? Me or the bank? The bank does! When I sell it, I'll do a short sale which the bank will do, and I walk away with credit in tack, and virtually stayed in the property for free, and my current mortgage is still less than what I would pay now in rent. So I'll stay put for now and buy real investments now. It made no sense to buy back then and I didn't when everyone else was buying driving up the price. Now, all would be buyers are either broke, scared, or both, and they aren't doing anything now. Now is the time to buy and when millionaires are made. My goodness folks. Now is the time to buy those Marshall Reddick properties from the bank. But then again, why buy SFR when you can buy a commercial piece of property. Hmmmmmm! And I know, buying commerical requires a different set of skill sets which most people are clueless about. So I don't know what to tell yah!
Guys, you have to stop being ducks and following mother duck off the cliff.
Godspeed to everyone
Tommy L

Alhambra, CA

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#6
Apr 9, 2009
 
I Lost a lot of money on the properties I purchased through Marshall Reddick. It was difficult to get properties rented in Texas, Phoenix, Tucson and Colorado. The renters would rent the place for a year and then leave. It would remain vacant for a couple of months and I would have to cover the negatives. All my properities had negative cash flow because once the property taxes and insurance got re-set after a year the cost went up and so does your monthly payment. I lost about $200,000 over the past 4 years on the 14 properties I got through the network. With all the costs I had to pay for the negative monthly cash flow and loss I suffered from selling the properties at less the price I purchased them just to unload them it really messed up my financial situation. With the properties I have left the value has gone down so much that I am stuck with the problems for the next several years.

Hope Marshall enjoyed all the money he made.
My only comment is, Marshall can you please stop stating that your goal is to prevent middle class poverty. You did the exact opposite, you destroyed a lot of peoples hopes and dreams.
billy bob mortgages

Andover, KS

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#7
Apr 26, 2009
 
I worked for a lender inside the Reddick Network It is the biggest scam on the planet. All the developers pay marshall 1/2 of their commission which is between 6-8% of the price. The lenders pay a monthly marketing fee to MR of 20K per month he had 7 lenders when I left at the peak of the market in 2005 Mr was selling 1000 units per month at an average price of 150K at 3% commission is about 5 million a month plus what the lenders pay! No wonder he could give away so much free fried chicken... The realtors and developers were so dasterdly I had to quit. And his people had all drank the kool-aid. WOW from 2004- until spring of 2007 a lot of people got rich but I gather none of them were the investors he promised to break mediocrity for. People were encouraged to refinance their homes at the top of the market and use the cash to purchase as many homes as possible. So if you lived in southern Ca and your property doubled in value you were easy pickins for this medicine show of sorts... You HELOC (home equity line of credit) your house for 200K at 7% interest Only No principal paymennt this only adds about $1200 to your current motgage payment ... but what the hey the market was booming in 2 years you could refi again cus the value would go up... always up... MR was a stickler about not investing too much in any deal so the LTV was always 95% this meant the loan had to be a variable product usually for 3- 5 years fixed then Watch out baby.. The builders all had their own special appraisers who always charges at least $100 more than the market value in the area. and the Reddick properties were always 10 to 15% over the market value in any given deal. they always had a "Featured Area" and the people .. Myself included would fly into LA every week then drive down the 405 to Irvine and Sell Sell Sell.... jesus he even had one guy selling private cabins on a cruise ship that was being built... really are you kidding if it could be sold he sold it and always made sure he got his cut off the top. The deals were structured so that at closing the Reddick company was paid from the closing funds.The really sick and wrong thing about Mr Reddick is his Prayer breakfasts or prayer lunches where he would talk abour his spiritual journey and profess to be Godly... ripping you off in Jesus's Name.. What a crook. the problem was He never looked back once the ink was dry... ever try the customer service line ...its like the verizon dead zone commercials... the red zone... I truly hope he spends every last dollar he has trying to stay out of jail! only to fail and end up broke and imprisoned.
Coleen

United States

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#8
Apr 27, 2009
 

Judged:

1

I bought a sfr in Houston through Marshall Reddick about 2 years ago. First I picked out a house via the Houston Realtor's website and put down a deposit. Then I had someone in Houston drive by the property and found out that there was a sold sign on it. The Realtor (who was in Hawaii!) neglected to tell me that the house was already sold. He said that he was holding on to my deposit and looking for another house for me. I demanded my deposit back and he returned it promptly.

Then I called Marshall Reddick's office and asked for a different Realtor. They hooked me up with a RE/Max agent in Houston. This time I flew out there and he spent a whole day showing me properties. I do think he was a reputable broker.

The problem is that Marshall Reddick makes its money via referral fees - from Realtors, Property Management companies, lenders, etc. This isn't unusual in Real Estate, but I think their referral fees are very high. I'm convinced that I could have purchased this property for a better price if everyone didn't have to pay a high referral fee to MR.

There are a couple of things that I liked about their program. First, they identified a good area where the tax incentives were great. Second, I like the model of buying a property and keeping it forever (assuming it's not a lemon). Once it's paid off, the rent is income. I think that's a good retirement plan. If you want to keep investing, refinance (assuming prices have increased) and buy another property.

I think the answer is to go to his seminar, learn what you can, then find your own vendors. And do the legwork. They didn't present realistic numbers - rental values, vacancy costs, etc.
Gary

Los Angeles, CA

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#9
May 3, 2009
 
Coleen wrote:
I bought a sfr in Houston through Marshall Reddick about 2 years ago. First I picked out a house via the Houston Realtor's website and put down a deposit. Then I had someone in Houston drive by the property and found out that there was a sold sign on it. The Realtor (who was in Hawaii!) neglected to tell me that the house was already sold. He said that he was holding on to my deposit and looking for another house for me. I demanded my deposit back and he returned it promptly.
Then I called Marshall Reddick's office and asked for a different Realtor. They hooked me up with a RE/Max agent in Houston. This time I flew out there and he spent a whole day showing me properties. I do think he was a reputable broker.
The problem is that Marshall Reddick makes its money via referral fees - from Realtors, Property Management companies, lenders, etc. This isn't unusual in Real Estate, but I think their referral fees are very high. I'm convinced that I could have purchased this property for a better price if everyone didn't have to pay a high referral fee to MR.
There are a couple of things that I liked about their program. First, they identified a good area where the tax incentives were great. Second, I like the model of buying a property and keeping it forever (assuming it's not a lemon). Once it's paid off, the rent is income. I think that's a good retirement plan. If you want to keep investing, refinance (assuming prices have increased) and buy another property.
I think the answer is to go to his seminar, learn what you can, then find your own vendors. And do the legwork. They didn't present realistic numbers - rental values, vacancy costs, etc.
Hi Curious as to who you used in Houston for the house purchase and any additoinal homes you have bought since then. Ever work with kathy Haney in Texas?
Gary

Los Angeles, CA

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#10
May 3, 2009
 
Hi Curious as to who you used in Houston for the house purchase and any additoinal homes you have bought since then. Ever work with kathy Haney in Texas?
Have heard of some nightmares of people in MX who put down monies and the builder never completed the complex.
Pam

Harlan, KY

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#11
May 16, 2009
 
It seems there's always a crook out there looking for a way to scam people. This one's highly educated, and obviously was looking for those with hopes and dreams of which he could take advantage.
People should be wary of ANY seminars like these.
Why? People tend to think well everyone else is participating -- surely it must be safe, right?
The answer is no; group think is usually dangerous.
universe

Houston, TX

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#12
May 16, 2009
 
Even than I am not an investor, I would recommend that before doing any kind of investment, contact the police department in the city where you are interested in investing, and ask them the areas that are more highly dangerous, (maybe paying a private investigator to check the neighborhood where you are really interested in buying properties' they are expensive bcz they charge most of the time per hour, but I believe it might be worth it, instead that you lose thousands and htousand of dollars, contact the chamber of commerce so you can get familiar with the newspaper company of that city and read the sections of crimes in that particular area, my husband always contacted the chamber of commerce and the police department before moving to a new location. Good luck and please don't trust strangers even that they present themselves looking pretty on paper, remember they are also investors just like you, and they all care is about money not you or your family.God Bless you.
universe

Mc Lean, VA

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#13
May 16, 2009
 
I also forgot to mention, once you have done a thorough investigation, request a "copy" of the documents that you have to sign, and present it to your attorney before you sign anything, your attorney will review all the details and interpret it for you and explain to you the dangers of certain clauses that he can modify for you before you can get in any kind of future trouble. 6 I know that fine print is a pain, but believe me, I do this all the time and it has saved me headaches and money. Good Luck.
Kenny

Cedar Rapids, IA

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#14
May 22, 2009
 
I too bought the hype... In 2003 we began investing... A house here and a house there, accepting some out of pocket... That was the price MR stated would be part of the deal... I bought six properties that are rented, have had the occasional vacancies but are maintaining. Well, a broker from Cape Coral and her partner came to CA to sell... and we were gullible enough to believe her pitch and bought three... BIG Mistake... Florida tanked (too many builders, too many houses, NO JOBS!!!) Flippers couldn't sell their properties, so turned them into rentals. There went the rental market. We started out at $1400 for $1700 Mortgage payments, and went down to $825 a month. I just had a BPO down by a broker for the bank. A property we got for $170K is now worth $65K! I did a deed in lieu on one property (gave it back to the bank), the 2nd one the bank doesn't want to touch because, according to the bank, THEY bought PMI themselves that our lender ISN'T even aware of, so they CAN'T take a deed in lieu. Either we short sell it, or it forecloses. The third one is a similar situation. So currently, the bank is calling on the other two threatening foreclosure... Just wondering if anyone has gone through foreclosure that could tell me what to expect... I am curious how the bank handles foreclosure when an owner has multiple properties.
John wrote:
Wife bought 20 houses through Marshall Reddick. Without a doubt, the worst thing that has ever happened to us. More than half now in foreclosure. We are contemplating bankruptcy. We are being sued by banks. Renters come in for a year, then vacate, mark the walls, wreck the carpet, leave their garbage in the garage. One house was busted into by cops -- the occupants had 500 pounds of pot.
Then the prop manager and maintenance people want to charge you 5K to clean up the mess when I could do it myself for $1000. Gross incompetence in some of the property managers MRN set us up with.
The whole problem with Marshall Reddick's philosophy of real estate was that -- in the 2005-2008 market, any person of income and integrity already had bought a house for themselves at the low interest rates that were offered. Who the heck is left? People who have no credit and weak income. There are no quality renters available in the market. As a result, there is high maintenance because they trash the house, and then once unoccupied, a house can go unrented for months. Property managers have hundreds of houses they are trying to rent the same as yours. The only way to circumvent that problem is to dump the prop manager and get out there and rent it yourself.
Marshall set me up with a condo-hotel room in Hawaii which is an absolute disaster...the manager/operator is now being sued right and left for resort properties all over the islands...it's all a scam, protected by corporate shell. The maintenance fees have gone through the roof making the entire mortgage impossible to afford.
I am convinced the real criminals in our society aren't on the streets. They're in the boardrooms.
Kenny

Cedar Rapids, IA

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#15
May 22, 2009
 
I'm wanting to start a network of investors who purchased from MR in Orange County that got burned. I was burned. Perhaps together we can figure out where to go from here. Drop a line ozkenny@hotmail.com.
No Name

Galveston, TX

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#16
Jun 27, 2009
 
billy bob mortgages wrote:
I worked for a lender inside the Reddick Network It is the biggest scam on the planet. All the developers pay marshall 1/2 of their commission which is between 6-8% of the price. The lenders pay a monthly marketing fee to MR of 20K per month he had 7 lenders when I left at the peak of the market in 2005 Mr was selling 1000 units per month at an average price of 150K at 3% commission is about 5 million a month plus what the lenders pay! No wonder he could give away so much free fried chicken... The realtors and developers were so dasterdly I had to quit. And his people had all drank the kool-aid. WOW from 2004- until spring of 2007 a lot of people got rich but I gather none of them were the investors he promised to break mediocrity for. People were encouraged to refinance their homes at the top of the market and use the cash to purchase as many homes as possible. So if you lived in southern Ca and your property doubled in value you were easy pickins for this medicine show of sorts... You HELOC (home equity line of credit) your house for 200K at 7% interest Only No principal paymennt this only adds about $1200 to your current motgage payment ... but what the hey the market was booming in 2 years you could refi again cus the value would go up... always up... MR was a stickler about not investing too much in any deal so the LTV was always 95% this meant the loan had to be a variable product usually for 3- 5 years fixed then Watch out baby.. The builders all had their own special appraisers who always charges at least $100 more than the market value in the area. and the Reddick properties were always 10 to 15% over the market value in any given deal. they always had a "Featured Area" and the people .. Myself included would fly into LA every week then drive down the 405 to Irvine and Sell Sell Sell.... jesus he even had one guy selling private cabins on a cruise ship that was being built... really are you kidding if it could be sold he sold it and always made sure he got his cut off the top. The deals were structured so that at closing the Reddick company was paid from the closing funds.The really sick and wrong thing about Mr Reddick is his Prayer breakfasts or prayer lunches where he would talk abour his spiritual journey and profess to be Godly... ripping you off in Jesus's Name.. What a crook. the problem was He never looked back once the ink was dry... ever try the customer service line ...its like the verizon dead zone commercials... the red zone... I truly hope he spends every last dollar he has trying to stay out of jail! only to fail and end up broke and imprisoned.
I used to work for MR and all the above is pretty darn accurate. I am one of very few people that worked there and left at the height because i could not stand what MR was doing to people. I left my job with MR that paid very well and would do so again in a heartbeat because i like to be able to sleep at night! Stay away from this place. Trust me!
Travis

Signal Hill, CA

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#17
Aug 17, 2009
 
Hi Wayne, I would like to talk to you more. My email is ts96sftl at yahoo.
Wayne wrote:
I'm a commercial real estate broker. I went on a tour in Phx, AZ, but didn't buy. At first I was second guessing myself, but common sense kicked in and I decided not to. I know that you can't really get rich investing in single family homes unless you own a ton of them, everything goes right, they stay rented, and you sell at the peak of the market. Then you make money, otherwise, you lose money. Single family homes (SFR) is either feast or famine. It's either 100% occupied or 100% vacant. The basic principal of "economy of scale" isn't present in SFR investing. Plus, you do all that work for either a negative cash flow or for $50 or a few hundred bucks a month positive. You bought yourself a JOB!
And Marshall Reddick advocated paying full price for the properties. My goodness! I had a hard time getting that thru my brain and I rejected the idea. I bought a home in 2005 at the height of the market (to live in) for $30K less than what the sellers were asking, plus I got a commission for about $6K, plus the seller paid all of my closing cost which was another 6K, and I got my 1K deposit back at the end of escrow. I pulled 29K out of the property 1 yr later, I still live there, I paid $0 dollars to buy it, and I'm upside down in value, but who has the risk now? Me or the bank? The bank does! When I sell it, I'll do a short sale which the bank will do, and I walk away with credit in tack, and virtually stayed in the property for free, and my current mortgage is still less than what I would pay now in rent. So I'll stay put for now and buy real investments now. It made no sense to buy back then and I didn't when everyone else was buying driving up the price. Now, all would be buyers are either broke, scared, or both, and they aren't doing anything now. Now is the time to buy and when millionaires are made. My goodness folks. Now is the time to buy those Marshall Reddick properties from the bank. But then again, why buy SFR when you can buy a commercial piece of property. Hmmmmmm! And I know, buying commerical requires a different set of skill sets which most people are clueless about. So I don't know what to tell yah!
Guys, you have to stop being ducks and following mother duck off the cliff.
Godspeed to everyone
Darcy Parsons

Santa Monica, CA

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#19
Feb 1, 2010
 
I have a MR property in Homestead that I am working on a short sale with. I have been talking to a lawyer down there to help with the repayment the bank will go after me for. Does anyone know this lawyer and can you tell me if he is reputable. He sounds great on the phone and seems to check out...
Loan Lawyers LLC in Florida. Matthew David Bavaro, Esq.

Thanks..

please email me at : darcyparsons@gmail.com
anonymous

San Diego, CA

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#20
Apr 3, 2010
 
i bought 4 properties thru MR. the properties in arizona and florida are in the process of short selling and im still thinking on what to do with the properties in texas. if anyone has done a short sell/foreclosure in any of these areas, please email me as i'm interested with the process and if the lenders actually come after you for the repayment of loan...or do they forgive the difference?
ethanape@aol.com
happy

Port Charlotte, FL

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#21
Apr 5, 2010
 
Just look were greed can get you.How do you Like this get rich Ideal now?

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