mainecmi wrote:
checkmate
I was contacted by the FEC yesterday afternoon. I was asked what due diligence I did on AGAPE before accepting their offer to fund. The answer to them is as straight forward as mine will be to you. Not enough - to none. Why did I not do more? In the situation that many developers, contractors and the like find themselves in - not just for today but, also for the last 18 months; many lenders and or lender brokers contact us to ask if we need funding. Banks and traditional lenders had begun to dry up 18 months ago - but people like me, my clients, fellow developers and associates were all holding onto to projects with no source of funding in sight. Brokers gegan to surface from everywhere. AGAPE's name came up several times as being a nontraditional lender. Their representative had been in contact with several people trying to get their jobs funded. Many developers know each other and we talk. AGAPE had provided LOIs to developers with promises to fund. Later it became known that they actually did fund a project or two that we could check on. One of my partners went to visit AGAPE in their offices in NY and reported back to me that AGAPE was most likely going to fund one of their projects. So, I asked if they would be interested in Carriage Homes. At that time, I had a partner, Mike Buono, in the deal. He was to provide the financing for Carriage Homes - but was later stopped from being able to perform because he had other projects not doing well. Buono suggested I ask AGAPE to take over their position in the project. I sent all of the documents to AGAPE and they decided to become an equity partner by investing the funds to the project. So, in the light of this - with a project already going forward, and a partner dropping out, and having a willing equity partner to step in to fund the project: why would i object to moving forward, and or why would I kick a gift horse in the mouth? I have been to many banks for funding. And, never, once did I ever decide to research the bank or the bank manager. What would ever make me do anything more in this case. Next, once the funding began, and it never stopped, who would ever think to question the source. My job is to get the project going, get it funded, keep the funding going, complete the project - then sell the thing. I was not investing in AGAPE - no reason to do research. You invested in AGAPE - you needed to do your research.
Was that the SEC you were referencing?