Hello everyone !
I just wanted to share my experience with SEG.
I met them at one of the seminars of Marshall Reddick where they explained how their process works and how you can make money buying their homes. I assume people on this forum are familiar with their system details so I won’t go into details.
What is notable is that they present it so nicely that it makes you wonder what’s in it for them. They use expressions like “revitalizing communities”, “we buy whole neighborhoods and rehab the homes”, “we just want to help americans to achieve the American Dream”, etc.
While talking on the phone with Danielle Oyhancabal which is their Real Estate Consultant me and a friend of mine were asking lots of questions just to make sure we understand how the things work and what are we getting ourselves into.
I asked Danielle to send me a few properties as example so we can get an idea of what kind of properties we are talking about. She told me that she cannot send me properties that are part of an existing client portfolio unless I am a member. Ok, so I signed up and I gave her my credit card number to be charged for $1000 which she claimed that it will be charged only at the end of the following week. The transaction was pending the next day :cool
She sent me the properties as promised. After a bit of googling, I found listings for two out of the three properties. A property from CA was listed for $10500 (which they would sell me back after being rehabed with $59900) and another property from IN was listed for $15000 with an estimate of $5k-$8k in repairs for some drywall damage (which they would sell me back for $34900). Good deal, huh ?
As an aside, I emailed the listing agent of the property in CA to see if it’s still available. The next day I got a reply confirming that the house is still available and I can see it at any time. So much for sending me houses from “existing client portfolios” :biggrin
These findings explain many things and among them the need to pay cash. It is obvious that the properties are not worth as much as they claim so taking a loan on it would not work. Once you are in escrow they will use you your money from “escrow” to buy and rehab the property and sell it back to you and keep the profit.
BTW, their sales pitch is brilliantly designed to make you believe the whole thing. They sprinkle various items throughout that makes you believe that you are getting a good deal (you’ll be getting a property for pennies on the dollar, the houses are valued for much more that we are selling them for, we are also waiting in the same round-robin queue to buy a house as our clients, etc) and that they are doing this just because they want to help people (the video with the house that they just donated, revitalizing communities, etc).
Needless to say, I canceled my “reservation” the next day.
The following day I get a call from Danielle asking me what’s going on. I told her about the property that was listed for $10.5K. She said that this is because this is a foreclosure and it is before being rehabed. I replied by saying that they’ll have a hard time to make me believe that they’ll put in $40K-$50K worth of remodeling into the house before selling it to me. I told her that I can do that myself and get the house for a much lower price. At this one she replied that I’m a real estate investor and I was just trying to extract information from them and hung up the phone.
I tried to keep this post as factual as possible in the hope that I can help other investors make an informed decision.
Regards,
rumberobueno