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Revisiting Old Mistakes

First the pyramid scheme…

Apparently people are really eager to dig up whatever dirt they can on me. So in the comments I noticed several people referring to my money making scheme on Newsnet from way back in 1997. I was surprised myself when I saw this. I vaguely remember it. I was 14 years old then. This is dirt from 10 years ago!! The internet (err.. Google) keeps you honest!

(By the way… I didn’t have my own email address back then so I was using a family member’s acount. That’s why the FROM name doesn’t match – for those who were wondering)

OK… what do you want me to say about this? Yes, this is pretty much a pyramid scheme. Yes, it was a mistake to get involved in something like that. I have been in America for 3 years at that time. As a poor immigrant kid, I was just trying to find a way to make some extra cash. I’m impulsive. I’m entrepreneurial. So I gave it a shot. And it didn’t work (surprise, surprise).

At the time I don’t think it was a big deal and I didn’t understand much about pyramid schemes. I didn’t even write that letter. It was a copy-n-paste type of thing. I got it by email and just followed the directions.

So am I just making excuses? No. I am NOT denying anything. It was wrong. I just want to show you my side of it.

Since then I did try a couple Multi-Level Marketing opportunities over the years but found them to be very similar to the old pyramid scheme but with a product attached to make it more legal. There ARE probably good MLMs out there, but I have a little bit of a sour taste from it. In a way I am glad I tried these schemes, because I now know what NOT to do.

Second… this one is more recent…

Ramit Sethi and the 24% return “scam”…

Here is the explanation I already left on Ramit’s I Will Teach You To Be Rich blog:

Ramit, thanks for a fair writup.

To everybody…..

Yes I DID send out that email to try to find some private lenders who want to put their money to work with me.

I wanted to use the money to bail out the properties, sell them and pay the lenders back. I wanted to also use the money for buying new properties. I was going to explain everything to a private lender once we meet.

To make it safe, I was going to secure the lender’s money by a trust deed against my properties.

This strategy was tought at one of the seminars I went to. They said to go to your friends/family and see if anybody wants to be a private lender.

What I did wrong was to make it seem like my business was going great when really I was in trouble.

The right thing to do when you approach somebody to borrow money is to be upfront with your financial health so that the private lender can make a smart decision.

However, I was desperate and sent out that first email.

Then I realized that it was wrong to hide the fact that I’m really facing foreclosure, so then I send another email to make sure everybody understands my situation.

So again, I apologize for not being upfront. I’m learning a big lesson through all this stuff.

Keep in mind that being a private lender on RE deals is NOT a scam. Its actually a great way to get a nice return.

Just make sure you know the strength of the borrower and make sure you get your money secured by real estate with some equity in it.

Casey Serin
www.IamFacingForeclosure.com

To add to that…

I was following the directions given to us at one of the seminars on how to find private lenders for your real estate deals. My goal was to borrow small amounts of money, say $5-10K, and use it to catchup my payment, sell my properties and pay the private lender back a generous 24% annualized return.

I was going to use the equity in the properties as collateral for the loans. Additionally I wanted to use the money to do more deals to get my real estate business back in shape.

What I did wrong was, fail to mention that my real estate business was actually in trouble and I’m facing foreclosure on all these properties. My intention was tell this to the potential private lender in person before taking any money. Then if they still wanted to lend it, they would do it knowing all the risks involved. But I should have disclosed that in the email.

That’s how I borrowed the $3,000 from a friend recently. I told him about my situation and he was still willing to lend it to me. I promised a flat 10% interest whenever I return the money (no collateral on this one). I already gave him back $1,000 plus $100 interest. I still owe him $2,200. Since, the Dallas house is not going to net me any money like I was planning on, I will have to find another way to pay it back.

Anyway… So I realized my mistake on that private lender solicitation mailing and I sent out another email shortly after – apologizing and telling everybody the truth about the health of my business and that I am facing foreclosure.

I was acting out of desperation and should have thought it through a little more.

I apologize again to anybody who is on my personal mailing list and received that original message. Sorry for misleading you.

Also I apologize to my high school friend Ramit for including him in the mass mailing. I haven’t talked to him since 2000 – back when we graduated. No wonder he thought this was a scam – he received it out-of-the-blue. I found him one day online and added his new email address to my address book for future follow up. But then this whole mess happened and I mass mailed everybody in my address book including Ramit.

By the way.. out of about a thousand people who received the email I only got one person somewhat interested. I’m surprised more people are not willing to put their money to work at 24%. Maybe because people don’t understand they can be private lenders on real estate. Or they don’t trust me anymore. I don’t blame them. It’s going to take me a long time to win people’s trust back. That’s the consequences to my rash behaviour.

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