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:
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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