Real Estate Lessons Learned + Ponzi Schemes + Latest News

Commercial Real Estate Investing From A-Z

Today I share latest things I have learned, some updates on the ponzi schemes that are rising and what is new in real estate investing.

Read this entire episode here: https://tinyurl.com/26msmatp

1. There’s a clause that banks are putting in some of their lending documents that is called cognovit clause – google explains that a cognovit is a type of confession of judgment, it refers to an acknowledgment or confession made by a defendant that the plaintiff’s cause is legitimate. It permits judgment to be entered without a trial for the purpose of saving costs.

2. Warren Buffet famously said “Only when the tide goes out do you learn who has been swimming naked”. The tide is out right now and we are starting to spot the naked swimmers.

There are more ponzi schemes coming to the surface, it feels like it’s almost one a week. Here are the most recent ones:

1. Real estate developer Robert Matthews has been sentenced to over five years in prison for multimillion-dollar frauds spanning multiple states, including Connecticut, Massachusetts, and Florida. The 65-year-old faced charges related to real estate scams that caused losses of over $30M to banks and investors
2. Real estate investor Sean Tissue was sentenced to six-and-half years in prison for fraud involving a $3M investment and bankruptcy.– As per court documents, Sean Tissue, also known as Sean Ryan, was the mastermind behind a substantial real estate investment fraud scheme between 2015 and 2021.
3. A carbon capture ponzi scheme promising returns of ~ 40% yearly is being investigated by the SEC. They raised anywhere between 150-250M. This person was being a lead speaker at some real estate groups and he was the “carbon capture” go to person.
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In the news:

Clutter, a storage and moving startup once valued at ~$600M in 2019, is being forced to sell at a steep discount in an auction of its assets. The premise for Clutter was that they would come pick up your items, they’d take pictures, and they would move it all for you into a warehouse far from your main city to avoid high real estate costs, and store it for you

WeWork casted substantial doubt over its ability to continue operating amid liquidity and profitability challenges. WeWork told investors that the next year would be a make or break for the company. Sam Zell said in the early days of WeWork that he has never seen a model like this work (where they commit to a long term lease, but their customers are on month to month contracts).

Office leasing in Manhattan increased by 20% MoM in July to reach 2.3 million sq. ft.

Manhattan’s retail market is showing signs of improvement, with a growing number of tenants signing new deals.

Asking rents in Miami grew 12% YoY to reach $65.03. Availability of Class A properties in Miami declined 20.6% YoY.

The Mortgage Bankers Association predicted that commercial and multifamily mortgage lending would decline by 38% YoY. What do I see here? So many opportunities! There are 40% less transactions being made this year, less competition, better deals, time to buy!

I recently started using this excellent tool, tango.us, for creating SOP’s (standard operating procedures). As your company scales, it’s extremely important to create SOP’s from the get go, so that anyone can come in at anytime and pick up any job. This is how a fantastic company is run.

What’s happening to office?

I’m hearing more and more companies are requiring 3 days in the office, some are requiring 5 days in the office such as Jeff Bezos’s Blue Origin, calling themselves a work from work company. Elon Musk is also known for demanding employees being in the office 5 days a week. Facebook and Google right now are demanding 3 days a week in the office and Google announced that it will consider attendance as part of performance reviews.

Join our Advanced Real Estate Investing Summit! https://aresummit.com/ use coupon SUMMIT20 for 20% off both tickets

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