A CRE Scam for Brokers

This past Tuesday I received a call from a very timid person asking if I had and bank-owned listings and if I would like to obtain bank-owned listings. I could immediately tell something was fishy with this guys pitch. He was calling to promote a conference call the next day about obtaining REO listings. I gave the guy my email address to send the conference call-in number and access code. As soon as I hung up the phone I immediately thought I just made a huge mistake giving out my email address. I was hoping that this guy was not going to be some spammer that would litter my inbox for years to come. The truth about the caller’s intention was much more sinister and I can’t be totally sure that this “group” will not turn out to be spammers as well.

Yesterday at 4:30 PM an associate and I called into the conference call to hear the “pitch”. The conference call was run by a guy named Ray McLaine (here is his Linkedin profile). We could immediately tell this Mr. McLaine was reciting a well-rehearsed presentation. Everything he spoke about was just scratching the surface of the topic of commercial real estate brokerage and his thoughts on the similarities between the residential REO market and the coming foreclosure market. There was no depth or demonstration of understanding of commercial real estate brokerage whatsoever. He was pitching the creation of a commercial REO broker’s association that he would oversee and manage. Some of his value propositions for membership in the association were as follows:

  • Members will greatly improve their chances of obtaining REO listings they will be preapproved to handle the requirements of managing REO transactions.
  • The first 50 members will be recognized as “Charter Members”.
  • Members will have co-ownership of 50 zip codes within a 20 mile radius of their location.
  • Members will enjoy access to decision makers at banks at association dinners, round-table discussions and conventions.
  • Members will receive REO coaching and training in REO best practices from the association.

There was a second guy on the phone who I can only presume was Mr. McLaine’s co-conspirator. The second guy was asking questions like “What can we expect to receive as members of the association?” and “Will the memebrs have a say in the governance of the association?”  The answer to the second question was my favorite.  In short, members will have a say in a similar way as a corporate board of directors has a say in the running of a company; however, there will always be a “Master Member” with override decision making capabilities.  Of course, Mr. McLaine would be the “Master Member”.

Here is the good part.  Membership in the association costs $1,495 for registration and $150 per month for dues.  Charter members, of which there will only be 50, benefit from reduced fees of $995 for registration and $100 per month dues.  Even better, those on the conference call would receive a further discount in registration of $200 taking registration costs down to $795 if we registered the same day or the next.  What a gereat deal!  His list of benefits ran on and on.  Mr. McLaine has big plans for this association: an East Coast Commercial REO Convention, a West Coast Commercial REO Convention, 5 planned dinner meetings, etc.

Mr. McLaine’s pitch was all form and no substance.  It was almost as if he bought a how-to book from late-night TV on how to set up and manage a national association.  In all, I have to say the best part of the pitch was his reference to his website.  I have embedded a screen shot of the home page below.  Needless to say, his site does not look very legitimate.  See for yourself:

creoba-homepage

Somehow, Mr. McClaine thinks he is going to convince at least 50 members to join his association called the Commercial REO Brokers Association.  The association also has the outsranding domain name www.commercialreobrokersassociation.com or you can just use the initials www.creoba.com. Even using the special, special deal of $795 for initiation fees, Mr. McLaine is attmepting to raise at least $39,750.  Not bad for a few days “work”.  There is no use dancing around gently in commenting on this pitch.  It is nothing more than a big scam.

Anyone dumb enough to give this guy their credit card information deserves what they get.  The sad part is I’m sure he will find a few overly eager brokers looking to get a leg up on their competition. I’m pretty sure this guy is scouring commercial real estate sites like Loopnet, NNNEx, Propertyline, etc. to obtain his call lists to generate participation in his conference calls.  To me, this is nothing more than a phishing scam intended to make the creators a quick buck.  I guess desperate times really do call for desperate measures.

Did anyone else get this conference call proposal?  If you did, let me know yout thoughts in the comments.

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28 Comments

  1. That is quite the scheme he is trying to rip people off with. The worst part is that he is playing off peoples emotions in a tough economic time like this; trying to promise the world to them, and really just taking their money. I'm glad you didn't fall for it though.

  2. Nice post. I'll make mention of it on squarefeetblog.com. The other big indicator is that his sign-up page asks for credit card information, but it isn't even a secure page!

  3. [...] at retailchatr has a post on an individual named Ray McLaine running around hitting up brokers and other industry [...]

  4. Good point.  Thanks for the mention on squarefeetblog.com

  5. costarica retirement says:

    I think it is an interesting information that I heve been read, Thanks to let me write a comment in your page.

    Hazel

  6. troy says:

    I did one better I went to the dinner last night. What a joke, I had a vibe that this thing was a scam from the get go of unprofessionalism, but I went against my better instincts and attended. The minute this guy started speaking I could tell he was peddling his snake oil, the guy got some idea in the middle of the night and woke up and started an association. There is absolutely no value there, in fact I'm going to dispute the charges for my dinner on my credit card just based on principal. This guy shouldn't be allowed to sell anything. I feel like I was on an episode of Punkd or a skit on SNL… I have to give this guy credit he duped 280 REO agents out there to waster there time. I stayed for about 5 mins of his nonrehearsed speech of which he stumbled through a powerpoint presentation he must have made that night.

    • Mark Barker says:

      This is Mark Barker. I am the Executive V.P. of the Commercial REO Brokers Assocaition (http://www.creoba.com). I have been observing the anonymous comments for a while and now have decided that I need to respond.

      Please see my comments below. If anyone would like to contact me to discuss membership or the goals and objectives of this association, please contact either Herman Neuman, Membership Director or myself at (818) 483-1597

  7. troy says:

    Apparently after I left he had a 1/4 of the agents left then he invited his son up there who runs some coaching crap.. I've seen his son before he's another conman, after his son started talking another 1/2 the room emptied and before the end all the ripped off agents were outta there. Anything you have ot payfor that you haven't heard of or isn't established is crap and this certainly sets the bar for crap

  8. Michael says:

    Interesting information you all… Appreciate the heads-up.

    I run a legitimate commercial real estate training and advisory company, and I received an email from this gentleman this morning asking me to contact him about possibly forming a strategic alliance and providing his association with some of our course materials for their convention.

    I'm not sure how legitimate this contact is, after reading your posts. I will connect with him tomorrow and post an update here for everyone. Hopefully that will add another datapoint for anyone else who might be looking to do business with the association.

  9. Chris says:

    Look at the videos on the web site. Does the head of the organization exude the skills of a commercial real estate leader? Start and stop with his clip and blue collar meeting kick off and this is all the info you will need to pass judgement.

  10. [...] Real Estate REO Broker’s Association Scam February 12, 2009 Chris at retailchatr has a post on an individual named Ray McLaine running around hitting up brokers and other industry [...]

  11. Chris I says:

    They certainly sounded credible, at least based on their website. I am glad to have found your postings & updates

  12. Motelmat says:

    I am Motelmat, I have been in commercial RE for 45 years and just in the brokerage of lodging properties for 36 years. I made the mistake of listiening to their hype and I joined and spent a total of about $1,200.00 now and so far all I got was a piece of bad piece of halibut at a dinner in San Matep. I tried to get involved in committees and other things and so far it has been nothing but BS. I just cancelled my membership, but please don't make the same mistake I did, They do not do anything. I thin they only want to get a bunch of members in and take monthly dues, but so far it is a completely farce.

  13. Mark Barker says:

    This is Mark Barker. I am the Executive V.P. of CREOBA. I would like to take this opportunity to set the record straight regarding Motelmat's account of his experience with CREOBA. #1 The dinner meeting was in San Francisco, not San Matep. #2 The fish was Salmon not Halibut. Motelmat did try to get involved on various committees, however, there was no room at this time for additional members. We did discuss with Motelmat, the opportunity to headup the new speciality of Hotel/Motel committee. It should be noted that Motelmat contemplated joining CREOBA for two to three weeks before he submitted his application for membership. It was assumed that he did his due dilligence during that time and recognized that the mission of CREOBA is and will always be networking, training, membership marketing and a general platform trading pertinent information concerning the emergining Commercial REO Foreclosure Sunami.

  14. Mark Barker says:

    Continued from above:

    In our membership teleconference with Real Capital Analytics and their Distressed Asset Radar Program, they indicate that in the last three months the total number of distressed commercial property has doubled from 50 billion dollars to just under 100 billion dollars. See attached link: http://www.creoba.com/docs/Troubled%20assets%20ju… .

    We are a commercial reo assocation. It should also be noted, the two residential reo associations, REOMAC and NRBA are virtually closed to new members.

    Continued below

  15. Mark Barker says:

    Continued From Above:

    This is a recent comment from one of our current active members who has been thru the residential reo surge. Incidentially, this member is a PHD.

    My thoughts on this “topic” are: CREOBA is a NEW Association. I have NEVER heard them say my membership would result in a listing/sale of property; in fact information presented online (http://www.creoba.com), via phone and at the Tampa, FL, dinner emphatically stated otherwise. My understanding is that ALL of us together; setting standards for Commercial REO Brokerage-can best obtain the highest level of performance for the industry. Much the same way the Appraisal Institute raised the bar for appraisal with their MAI designation.

    Currently there are no other groups in place to aim and achieve the goal of industry REO Commercial standards. CREOBA states they are forming, marketing and expanding to obtain this goal. For heaven’s sake the motto on their website home page is “Setting the Standards for Commercial REO/ORE Industry”. How could I possibly read that and get a belief that CREOBA is going to GIVE/GET me work?

    Continued Below

  16. Mark Barker says:

    Continued From Above

    After 15+ years in REO residential with Fannie Mae and Freddie Mac I am aware that the Residential section has their standards and use only brokers who can perform AND the Asset Managers for Commercial REO are choosing to list with THOSE residential brokers instead of the standard cadre of commercial who are ignorant of what the standard operating procedures, key performance indicators, flexibility in meeting independent client needs are.

    As Commercial continues is decline, default and foreclosure spiral; let’s wake up and smell the coffee-either climb into the lifeboat, grab a bucket and start bailing with the rest of us or stay in the turbulent ocean, threading and gulping water, thrashing about hoping to cling to ANY debris.

    Continued Below

    • Mark – Thanks for chiming in. It seems like you think that the "standards" adhered to by residential brokers is what will facilitate a successful commercial transaction. Good luck with that.

      • Mark Barker says:

        Hi Chris: I think just the opposite. The standards in residential certainly do not apply to commercial transactions. Possibly you misread the comments from one of our esteemed members. We currently are setting new standards in conjuntion with input from the commercial financial community, holders of these toxic assets.

        In the end, it is a partnership!

        Thank you for your comments.

      • Mark Barker says:

        Chris, I admire that you consider yourself a watchdog for the commercial brokers out there. If you really do profess to have an honest and objective perspective, why not truly investigate our intentions and goals instead of speculating and posting. Why not authenticate whether or not we are a scam or whether by working together as a team of trained professionals we can turn this association into a powerful force to promote and help our members survive the worst downturn of our lives. Almost 250 national members and rapidly growing.

        Not a lot of risk in making a phone call. You can even call me collect to reduce your exposure.

        I invite you to call me at (818) 483-1597 X 103.

        Sincerely,

        Mark Barker
        CREOBA

        • Keith Confidential says:

          Mark – You have an uphill battle ahead of you. The deck is stacked. Eerie recruiting approach, low barriers to entry in an industry with a notoriously low bar. Your Experts or "Masters," or "Product Heads," are weak and are not leaders in their verticals. President way over his head, has little presence, can't present and as a first impression, set's the stage for a poor experience. The growth will continue but Chris is correct, results have to be quickly posted or your organization will crumble like a house of cards.

          That said, you are courageous and have a vision, which I admire and respect.

        • Mark – I don't consider myself a watchdog. I am just calling it like I see it. I don't need to look any further into your organization to see if it has merit. You just need to show results. Membership numbers are not results. Membership numbers are good for you and Ray but don't mean anything to your members. If anything, the more members you have the more watered down the designation – not that it isn't watered down anyway, since payment is all that is needed for qualification. You can't just sign up and write a check to be a CCIM (I know you guys may not know what CCIM is because it is a CRE based organization and you guys are rooted in residential real estate).

          As of today, how many of your 250 members have generated business as a direct result of membership in CREOBA? Let me answer that for you: Zero. Enough said.

          You guys may have the best intentions in the world but intention and results are two very different things.

          Chris

    • Mark Barker says:

      The text commencing with After 15 years and ending with spooky email chain letters was sent to me and others by one of our members (not myself) who incidently, in addition to her vast experience, is a PHD. Just wanted to clairfy.

      Mark

  17. Mark Barker says:

    Contined From Above

    And on a personal mention-I am put off by any individual who signs only his name and who will not “man up” with his personal/business address and phone. Good grief, It might as well have been one of those spooky email chain letters!

    Maybe Motelmat outa get a room and give it a rest!

    If anyone wants to contact The Commercial REO Brokers Association and discuss membership or the goals and objectives of the association, Herman Neuman the Membership Director or myself Mark Barker, Executive V.P. can be reached at (818) 483-1597.

  18. [...] just what the CREOBA organization is and whether or not they have any credibility whatsoever.  Since I found out about CREOBA I have been scratching my head wondering how these guys think they can start an organization that [...]

  19. Howard Mathews says:

    Mark, I have not looked on here for a few weeks and I se you are slandering me now. I am Howard Mathews, a very successful hotel broker in Discovery Bay, CA. Minor thing but you are wrong about the meeting I attended it was at the Hyatt in Burlingame CA in the San Mateo Area, not San Francisco and it was halibut, not salmon so it shows you were not there. I am stil being charged monthly on my credit card even though I have cancelled my membership three times now and I have discussed it with you on the phone. From what I see CREOBA is collecting dues every month from all of its membres, but has not given out one successful or beneficial property lead on a distressed property to any member yet, but is stil charging monthly fees to everyone.

    Looks like CREOBA is a new type of Ponzi scheme to me, get members, collect fees and then monthly dues, don't produce anything worthwhile and make as much as you can and then go out of business.

    Howard Mathews 925 634 2299

  20. Howard Mathews says:

    Note to everyone on this site. I just received an email from CREOBA that they are now refunding all of my original application fees as well as the 3 months of dues so at least they are acting ethically.

    Howard Mathews "Motelmat"

  21. Robin Tu says:

    Thanks Howard Mathews aka "Motelmat" for posting your experience with this CREOBA company.
    I am a residential real estate broker who is trying to not deplet my hard earning income to get into the REO sector and it has been very hard. I often hit walls one after another and really don't know what to do next. I do go on as many forums and blogs as possible to read other opinions and inputs as to how thing is going in the market. Nothing reliable yet, but that won't stop me. I will keep on trying.

    Again thank you for your input.

    Robin Tu 408-334-5597