Dec 18, 2005

John Ulmer - On the Ropes?

Share
Left: John Ulmer, courtesy of Real Wealth Expo website

(Toledo, OH) Lucas County Common Pleas judge Thomas Osowik agreed to a preliminary injunction last week against the Westhaven Group and several affiliated companies owned by John Ulmer. This is the latest in legal actions against Ulmer-related businesses over the past few years.

Community activists have long complained about the allegedly predatory practices of the Westhaven group, which uses investor monies to buy dilapidated properties, improve them, and sell them to sub-prime (read: poor and/or poor credit) buyers at double-digit interest rates. Ulmer has been accused of selling properties with major undisclosed problems, selling to people who could never make the high payments, and repossessing properties on the most marginal of contractual technicalities.

The Toledo Blade's Mike Wilkinson, one of the principal writers in the Coingate/ Tom Noe series that uncovered a web of influence peddling and corruption in Ohio state government, has been working hard on this story. There have been several references to the Coingate saga in the latest flurry of articles into Mr. Ulmer's dealings.

At first I just assumed that this was an effort for the Blade to play off the glory of Coingate. Heck, if I had a story that hot I would be milking it for all it was worth, too.

However, I don't think the Blade can be taken to task on this one. Ulmer's latest troubles seemed to surface after authorities recovered $1 million of state monies that Noe invested in the Westhaven Group.

What would be the consequences of a firm like Westhaven suddenly having to return $1 million in investments? That amount represents about 4% of the unprofitable firm's total investments. My guess: returning the BWC investment has crippled Ulmer's cash flow, and this may be the death knell for Ulmer.

There will likely be criminal charges filed against Ulmer for selling unregistered securities, making false representations in the sale of securities, and engaging in securities fraud. Some have likened Ulmer's businesses to Ponzi schemes with new investors paying off the old; time will tell if this is the case.

I interviewed a homeowner last year who bought a home from the Westhaven Group. After she got in the house she learned about serious problems with the electrical wiring that took $3000 to repair. She also learned that the house had undisclosed problems with lead paint, and found to her horror that her 1-year old granddaughter showed elevated lead levels.

Eventually Westhaven and the city of Toledo's Housing Department worked out a deal with the woman to get her into a new property. To my knowledge, the troubled property remains vacant.

Defenders of Westhaven point out that Ulmer's company deals with inexperienced clients, and the high interest rates merely reflect the increased costs of doing business with high credit risk homeowners.

I have been in exactly one house sold by Westhaven, so I am not in any position to speak for all of the thousands of properties the company has bought and sold.

The house I saw, though, was sold at a price at least forty percent over its true value, and the 14% interest rate seemed to me to be an abomination.

But hey - that must just be the latent bleeding heart liberal in me, right?

15 comments:

Lisa Renee said...

My oldest daughter and some of her friends (against my advice) are renting a home from Westhaven. They already started out having problems as far as repairs that were promised not made. Thankfully with some phone calls the majority of problems have been fixed but I warned them. I also told them to make sure given the history of this company that they get every "promise" in writing.

Thankfully they are not buying the property.

Hooda Thunkit said...

Mike,
”But hey - that must just be the latent bleeding heart liberal in me, right?”

“There you go again…” -- RRR

;-)

historymike said...

Lisa:

I'm not surprised. It seems like there are a lot of unhappy Ulmer clients.

Hooda:

I was shooting for irony, but I am not sure if that translated...

Lisa Renee said...

You'd know the house Mike...I'll fill you in sometime Off blog...

:-)

Do said...

Lisa - please keep reminding your daughter to exercise caution with this 'transaction'. Westhaven does make repairs when threatened with rent escrows, court, etc. but the caliber of the repairs will probably be questionable. Just because someone shows up doesn't mean they have done a adequate job. Most repairs are still not going to meet city code.

The terms 'repaired' or 'renovated' when referring to Westhaven properties makes one shudder. The idea of 'renovated' is a one coat spray of cheap paint followed by a quick roll out of the cheapest carpet they can find. No serious repairs seem to get done. Just make it look shiny and new and VOILA! you have a 'renovated' home.

I know of several homes that Westhaven bought for less than $5,000 and after an investment of $1,000 (paint/carpet) they have sold them to unsuspecting folks for $40,000 and more. I'm not saying that if you buy a home and fix it up that you shouldn't make money - I AM saying that if you are going to make that kind of profit you should at least provide a SAFE environment.

Lead abatement is expensive. A couple coats of fresh paint is cheap. Upgrading electrical service can run into serious money. Painting the fuse/breaker box is cheap.

While I am certainly NOT a fan of Westhaven, I have to tell you that there are LOTS of 'wannabe Ulmers' that are performing the same way. They just aren't selling securities to do it.

Do said...

One more point that is huge in my book - if you research a Westhaven land contract you will find that property taxes are escrowed and paid by Westhaven. At least that's what the buyers are told. If you research the amount of properties held on land contract you will find that a LARGE portion of them are at least 2 years behind in property taxes, even though that money has been paid by the buyer.

And for the record - there is another very prominent property owner/landlord in Toledo who operates in the same fashion. He just doesn't sell securities in order to fund the operation. At least I don't know of any. But the tactics are the same.

liberal_dem said...

There have always been people like Ulmer through our history. They prey on the poor and get rich. Many are 'upstanding' citizens and church-goers.

The only difference between them and rapists and thugs is that they 'look so dignified.'

Certain politicians are more egregious offenders as they purport to be working for the benefit of their constituents.

A Midwest Antifa said...

"bleeding heart liberal"? Maybe.

Regardless of the labels others assign to us we all need to know that there are people out there, like Westhaven, who will lie to our faces, steal our money, posion our children and throw us out of our homes.

What keeps me going and gives me hope is that, while these people are all around us, there is a larger number of people who finds this behavior unacceptable.

Anonymous said...

Has anyone here had any real experience with westhaven or is this all just rumors?
I personally know some one that was a private lender to West Haven and they made a great reate of return and recieved the money back.

Anonymous said...

MY HUSBAND AND ARE CURRENTLY LIVING IN A WESTHAVEN GROUP HOME.I ONLY HAD $6000 DOLLARS TO OUR NAME. AND WENT INTO A LAND CONTRACT
WITH THESE PEOPLE PUTTING $5000 DOWN AND INSURANCE $757 DOWN THERE CHOICE .MY PAYMENT IN $1220.00 PER MONTH FOR ONE YEAR AND THEN WE CAN FINANCE BUT MY HUSBAND IS A TRUCER DRIVER AND GOT POINTS ON HIS LICENSE. AND HAVE NOT BEEN ABLE TO WORK FOR TWO MONTHS AND MY JOB IS JUST ENOUGH FOR BILL AROUND THE HOUSE NOW WE HAVE TO LEAVE..WITH NOTHING AND NOWHERE TO GO. THE HOUSE NEEDS WORK BUT AT THIS POINT WE WOULD HAVE TRYED 2 FIX IT I ONLY HAVE A FEW DAY AND THEN WE R ON THE STREETS ALL OUR MONEY INVESTED IN THIS AND IF IT WAS A FIRE WHO DO YOU THINK WOULD GET MONEY?????? WERE JUST OUT IN THE COLD

Anonymous said...

I am so tired of hearing people that contribute nothing to society play the victim. Mr. Ulmer has created many opportunities for people to own homes that would have never been able to on their own. No one forced any of these tenant buyers to deal with the Westhaven Group. They bought on rent to own, because they had poor credit or not enough time on the job. If these people want a better life, stop playing the blame game and take responsability for their own actions. Make a change, pay your bills on time, budget your money, save for a down payment, keep your job for more than six months and join the rest of society that contribute and not drain.

Anonymous said...

I held three mortgages on investments. Two other investments were unsecured although we were told they would be. Found out after Westhaven went into recievership, that two of the mortgages were released with our forged signatures. The one I still held was sold so cheap that after the taxes and fees were paid, and the attorneys were paid, I recieved $11,100. out of the deal. According to the judge's ruling, we can kiss the rest of our $60,000 good bye.

Screwed investor Lou

Anonymous said...

hello to everyone that sadly got caught up in the lies of this company!!! like myself not all that long ago. we are working hard to recover our money and will be contacting attorneys and court hearings. is anyone interested in taking this nasty group of scam artists down with us??? i will not rest until they are brought to shame and produce the monies that they have stolen from us. i have the means and will follow through with my intentions!!!

Anonymous said...

Dear anonymous,
The last commentor on this blog. Have you done anything to pursue Ulmer in court?

Jane Smith said...

Scott Ulmer lives in Jacksonville and is now making plenty of money and not paying those victims. His new business, which was started in his wifes name, is profiting on real estate scams under a broker named Bruce Buie. The company is called Little Pink Houses of America. He took $35,000 of company money to put a down payment on a huge home in Julington Creek. So he's living the high life again and his victims are not being paid. How did they get justice? He is scamming new people AND making tons that those victims are not getting! If you google his new company, Little Pink Houses of America, you can see videos of his new scam.