| PA Deals |
| PA Deals Zack Weist, Gregg Norman Wholesaler who hid MAJOR issues with properties Harrisburg, Pennsylvania |
| 1st of Apr, 2011 by User566529 |
| Last year I bought 2 properties from PA Deals which included financing with their "preferred" lender Kusic Financial. The properties were both taken back in foreclosure from their lender on the previous person who had purchased them. What I was told when I bought the properties was I just needed to put the fixtures in (Everything was nicely painted and clean) Turns out NOTHING was connected behind the walls, we had to gut the entire place, plumbing, electrical. The city inspectors knew about this and so did PA Deals, they were trying to sell the property to some unsuspecting real estate investor (Me) in order to maintain their relationship with their lender. In total both properties cost me 40k+ more than they estimated. This is a common theme with them and people are afraid to post anything because they sue them. Well im not afraid I have evidence to back up everything I just said and I will be filing in the court of common pleas in the next few weeks. |
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The facts as described in this complaint are incorrect and not factual. The following are the facts as they pertain to this complaint.
This complaint is regarding two properties PA Deals sold Eric. Prior to selling Eric these properties, PA Deals hired and paid a local contractor to perform work at these properties. The scope of work included many different items throughout the houses and it was our goal to get the properties to a point where the rehab would be relatively easy and mostly cosmetic. PA Deals paid for a tremendous amount of work to be completed at these properties prior to Eric purchasing them. During this time, PA Deals struggled with the contractor and finally after many delays, felt as if the contractor had completed the work he was hired to do.
PA Deals sold the properties to Eric and his company assuming the contractor had completed all the work he was hired to do, claimed he completed, and was paid to do. PA Deals had zero reason to believe the work was not complete.
FACT #1 – PA Deals did NOT intentionally hide ANY major issues with the houses. PA Deals paid for work to be completed at the properties and when we sold the properties to Eric, we thought and truly believed that the work we paid to have completed was done.
FACT # 2 - Eric decided to handle the entire rehab himself and took the lead on locating contractors and managing the project. At the same time Eric acquired these properties that required renovation, he also acquired 5 more properties [from other people], plus had already owned 3 all in varying states of disrepair. That put Eric’s holdings at 10 properties all requiring a varying degree of renovation, which is a lot for anyone, even a seasoned investor or professional contractor to handle! Losing track of a rehab or experiencing cost overruns when moving at this fast of a pace is extremely likely.
Eric claims his crew began the renovation process and discovered additional work that was required to the property that PA Deals did not disclose. The problem with this statement is the claim that PA Deals hid these issues or tried to deceive Eric by not disclosing them is just flkat out FALSE, it’s not true! We did NOT know these issues were present. As stated earlier it was our belief the work we paid to have completed was completed and we had no reason to believe otherwise. We did not know about any of the problems until Eric brought them up to Gregg Norman about 2 months into the project.
When Eric brought up what he was dealing with, we were told by Eric’s employees that the total cost to cure the issues with the properties was going to be around $8, 000. At that time, Gregg Norman of PA Deals, offered Eric $1, 000 off any future properties he bought from us until we reached the $8, 000, plus Gregg guaranteed that any future projects bought from us would not have unforeseen issues present and if they did, we would pay the cost to cure them. Please keep in mind, we sold these properties to Eric as “fixer uppers” and in “as-is” condition. We made absolutely no guarantees on what the project would cost and due to the fact that Eric hired his own contractors and managed his own rehab, we were powerless over the situation.
Eric never once said no to the offer made by Gregg and never once brought it up again. A full 11 months went by and we did not hear one thing from Eric or anyone else about the projects. They never called and asked for our help. They never stopped by our office and asked for our help. They never sent an email asking for our help. They never once reached out to us asking for any help with the issues whatsoever. Then, in April 2011, Eric decided to post this complaint.
After being aware of this complaint, we reached out to Eric to find out what went wrong, how it went wrong and what we could do to help. Eric refused to talk us and referred us to his partner.
PA Deals then began to interview EVERYONE who worked with Eric and who worked on this project to determine the facts. Over the course of 3 weeks we interviewed the following people:
Eric’s Project Manager who oversaw these projects and the rest of Eric’s projects
Eric’s General Contractor who performed all of the work relating to the issues with these projects
Two of Eric’s employee’s who worked on these projects
Eric’s plumber who performed all of the work of these projects.
Every single person interviewed told the same story, Eric bought too many properties too quickly and lost control of these projects and others and as a result, lost money.
FACT # 3 – PA Deals missed items that were needed on this project and as a result Eric had to spend more to get the properties renovated BUT the cost was NOT $40, 000, not even close. Eric’s workers and everyone we interviewed said the total cost to cure those issues was between $10, 000 and $12, 000 MAX for both properties combined!
The biggest problem here was miscommunication. Had Eric reached out to PA Deals and explained to us what he was going through, we would have done everything in our power to correct the issues. PA Deals has had many successes over the years but we have also had our fair share of failures. Anyone or any company who buys and sells over 850 properties as we have is going to tell a similar story. We’ve had clients who have made 20, 30 even $70, 000 on deals we’ve sold them but we’ve also had people lose money. Anyone who tells you they’ve done hundreds of deals and never failed is lying, period. Real Estate investing as with any investment has inherent risk.
What I can tell you about our company is that PA Deals works very hard to give our clients the greatest chance at success. When situations arise that could cost us or our clients money, we work hard to resolve the issue, if we have a chance. In this case, we were NEVER given a fair opportunity to make this situation right.
Due to all of the uncertainty present when dealing with fixer upper properties, PA Deals has completely changed its business model. At this point, PA Deals is primarily providing fully renovated, turn key investment properties that cash flow and have built in equity. Providing this type of less risky, turn key investment product has proved to be much easier and manageable for most of our clients and we are achieving some pretty impressive results. Rehabbing properties is tough even for seasoned investors and even tougher when you do volume like we have over the years. The new business model PA Deals is operating eliminates all of the risk associated with rehabbing properties for its clients.
In closing I just want to address a few issues Eric brings up in his complaint.
1] PA Deals has NEVER threatened to sue anyone who talked bad about PA Deals. In fact, PA Deals has NEVER filed or threatened to file a lawsuit against ANYONE, EVER!
2] Gregg Norman did not offer Eric $400 per deal until we reached $40, 000. The only suggestion of an offer that was ever made was for $1, 000 per deal and that offer was made 2 months after the properties were bought, not recently as this follow up to the compliant may insinuate. The offer was made based on the fact we were told the total cost overrun would be $8, 000 NOT $40, 000. As stated, we never heard anything from Eric until this complaint was filed.
3] We are not in cahoots with the codes office. City Codes nor PA Deals never knew ANY of these issues were present when we sold the properties to Eric, end of story.
4] PA Deals did NOT intentionally deceive Eric.
If anyone has any questions regarding anything in this response or anything about PA Deals feel free to contact us at 717-901-7763 or at [email protected] |
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