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Tom Blackburne

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Advance Fee Scammer Pummeled Into a Bloody Mess

Posted by Tom Blackburne on Mon, Apr 15, 2024

I don't know if you heard about this, but last week a furious real estate developer stormed into the offices of an advance fee scammer in New Jersey.  The developer had just been scammed out a $200,000 "application fee."

The brawny developer pounded the face of the con man into bloody ground beef.  According to the paramedics, they could barely identify the face of the con man as human.


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Okay-okay, the above story never happened.  I just made it up to demonstrate a point.  The featured image of a pummeled person is actually just a "victim" wearing makeup.  Ha!  

But given the very real possibility of a beating, if you were an advance fee scammer, would you prominently display your actual office address?

Or would you simply use a P.O. Box?  Or perhaps - and I have definitely seen this before - would you provide no address on your website at all?  After all, who wants to to be pounded by an angry customer?


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The advance fee scamming industry is huge.  Developers and commercial real estate borrowers get conned out of millions of dollars in "good faith deposits" or "application fees" every year.

These con men issue term sheets for very attractive commercial real estate loans.  The borrowers, desperate for a loan, steal from their mother's grocery money jar, to raise the immense application fee required by the "lender." 

Once the money is in the hands of the grubby little con man, the "lender," of course, stops returning any phone calls and emails.  No loan is ever forthcoming.  It is all a con.


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Over the next few weeks, I hope to teach you other ways of these spotting these con men; but for now -

Any time a "lender" issues a term sheet with darned attractive terms, look at his website.  Does his website have a street address?  Does he even have an address at all?

"Danger, Will Robinson, danger!"  --  the Robot in the original Lost in Space TV series.


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Topics: advance fee fraud

Feedback From the Crittenden Conference

Posted by Tom Blackburne on Wed, May 10, 2017

The Crittenden Real Estate Finance Conference is one of the most prestigious conferences in the entire commercial real estate finance industry.  Folks, these are the Big Boys.  They talk casually about deals with capital stacks (a first mortgage plus a mezzanine loan plus preferred equity plus joint venture equity plus the developer's equity contribution) as large as $100 million.  My son, Tom Blackburne, and I attended this conference last week.  Here are his observations:

May 8, 2017  

I recently attended a Crittenden Conference in Costa Mesa, CA, where all the big-wigs (Citi, Wells Fargo, Blackstone, etc.) spoke about the state of the current market and gave their projections on the future. To no surprise, just about every panel that spoke discussed what opportunities they are seeing in the marketplace.  Retail is on the out, because the "Amazon Effect" is well underway.  There is no longer a high need for retail space when e-commerce is dominating the industry.  Even companies like Wal-mart are now shipping groceries to your doorstep.  As a result, the shipping (trucks, boats, planes, etc.) industry is hot and projected to increase in the foreseeable future.


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My dad asked the panel about a new term they were frequently using - Last Mile Retail.

Last Mile Retail is the latest topic buzzing through discussions of industrial real estate. It refers to the final stage of online purchasing and the travel of goods to the buyer from a distribution center. The obvious benefit is short lead-time delivery options for retailers/wholesalers to transport products to consumers at their place of business or residence.

Industrial is also hot.  Opportunistic lenders and investors should really be considering multi-tenant industrial properties in primary and secondary markets, especially in gateway and 24-hour cities.  C-Loans is also looking to capitalize on the opportunities presented in the current marketplace by adding lots of these new private bridge/construction lenders, unregulated family offices, etc. to our portal!

At the conference, there was an overarching sense of optimism, despite the obvious uncertainty of what to expect.  The Trump factor, I thought, would be a big topic and area of concern, but I was wrong. Everyone who spoke, shared the same opinion: Trump's regime will only have a marginal affect on the real estate market as a whole.  Trump plans to look at the current regulations affecting the banks and other regulated lenders, but even if he makes some changes, the Regulators (the companies doing the actual auditing) will be very slow in changing their practices and mentalities.


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On this point, the most highly discussed topic was Construction Lending.  It is incredibly difficult to get conventional construction financing right now, because of the HVCRE requirement.  This is a term you need to remember: High Volatility Commercial Real Estate.  HVCRE has put restrictive stipulations on what is considered equity, amongst many other restrictions, in response to the Great Recession.  One-third of all community banks that failed in the last downturn were due to bad A&D lending practices.  There are 2,500 fewer banks now than in 2008.  Who is capitalizing on this gap in the marketplace?  Private, unregulated construction lenders.  Can anyone guess how many new small banks were formed in 2016?  Just one. 

The other major topic of the conference was the dichotomy of the mortgage broker's mind set.  What I mean here is that a broker working a lead has two factors driving him one direction or the other: Certainty of Closing or Easiness/Speed of Processing.  Good brokers will look at a deal and instantly know which direction to take.  Some guys default to the lenders who move the quickest.  While other guys stay loyal and bring deals to their lenders that they know close loans.  This is where Blackburne & Sons, our sister company, makes its name. 


Blackburne & Sons has never been the quickest, but you bet damn sure they close loans.  They were one of the few small-balance hard money lenders actually closing loans during the Great Recession. In large part to the leadership and wise underwriting of Angelica Gardner, the EVP, and the unrelenting nature of Alicia Gandy, the longest tenured employee and hardest working loan officer in the company. 

Private-money lenders like Blackburne & Sons are not competing with community banks anymore.  They are competing with unregulated private bridge lenders that close loans quickly.  Many of which, can be describe as non-prime, wall street lenders.  Please read my father's blog for more information on this type of lender, which you can find here. Blackburne & Sons has been in business for 37 years and will remain in business for a very long time, because of the concept of Certainty of Closing.


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My final note on the Crittenden Conference: If you know my father, George Blackburne, and have read any of his work, then you will know the number 1 lesson in all CREF is that, "Bankers make loans to their friends."  What he means here is that banking is relationship-driven.  Banks only want to lend money to repeat customers, people whom they have a previous relationship with.  Remember this concept before asking Wells Fargo for a new construction loan.


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On a different note, I want to take this time to publicly thank Michael (Mick) Carlson for his years of managing C-Loans effectively.  Mick has now moved on to bigger and better things, and we genuinely appreciate his service and wish him the best of luck.  Going forward, I, Tom Blackburne, will be your point of contact for all things C-Loans.  Please reach out to me for any help with your lending parameters, questions, or even for a simple introduction.  I appreciate your time and hopefully together, we can collectively make C-Loans more profitable this year, and in turn have more loans for you to close!





Thomas H. Blackburne 
General Manager
(574) 210-6686 Best
(916) 338-2328


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Topics: Crittenden Conference