World Class Capital (Nate Paul) gets raided by FBI?
What I heard was Nate Paul's company World Class Capital in Austin is getting raided currently. Anyone know anything?
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Heard the same thing. Statesman posted this update but haven't seen anything more concrete.
But wait, there's more! 1. https://www.bizjournals.com/austin/news/2019/08/14/fbi-raids-world-clas… 2. https://www.kxan.com/news/local/austin/fbi-conducting-operation-in-down…
Jesus, he should be arrested for just wearing that tie in the ABJ article.
Never trust a man with 2 first names
This has always held true in my experience, honestly
big boise state fan uh
Looks more like Blue Mountain State to me
He looks like he could be a villain in a batman movie
He looks like an oompa loompa
Sometimes the universe enacts some cosmic justice
A very poetic justice today.
Rumor is Vista may have been raided too
Vista was not raided
'We are passionate about our role as the leader of reimagining real estate as we know it. We are World Class and the future is now.'
-Nate Paul, Founder, Chairman, President, and CEO
What the hell does that even mean? it's like he used the Dilbert mission statement generator. Add in the words "paradigm shift" and I think you win 'business jargon bingo'
.
Vista and Trilogy were not raided
You are correct. Maxwell Locke and Ritter was raided at the Frost, they ran taxes for him.
And the list of cringe-inducing RE Company names shrinks.
I'm sure he was also an investor in Prestige Worldwide
Yes, he was
Is Rich Unlces next?
Couldn't happen to a better person. Too bad it took them so long, maybe he'll get to spend some time in the comforts of a federal prison!
What do you all think will happen to his land portfolio?
Endeavor will pick it up.
Questionable reporting by KXAN:
"He has since invested in high-profile properties such as the IHOP restaurant site downtown at the corner of Cesar Chavez Street..."
Austinites, is anything high profile about this IHOP? Bold reporting in the city where breakfast tacos rule the world.
High profile because it’s a nice tract with huge development potential (near the convention center, near Rainey Street, near I-35) and unrestricted by Capital View Corridors.
Not trying to split hairs, but I'd call IHOP "high visibility" rather than "high profile". So much of this guy's story is bluster. Just like 99 Trinity is high visibility, he tried to make it "high profile" by announcing a high-rise that never materialized.
I've attended several SXSWs / Fun Fun Funs and I've always used their lot for parking. Funny, I live in NYC but this is the only IHOP I know off the top of my head.
It's a great site in Rainey, but in terms of breakfast, it is bottom of the totem pole in Austin.
Not much to go on, but Dallas Morning News reports:
'There were also reports federal agents searched World Class CEO Nate Paul's home.'
They hit his house first at around 10 am and were still outside at 5 pm loading boxes into a box truck.
This guy is such a slimy douchebag. My buddy works for a top RE law firm in Texas who Nate tried to hire - they literally refused him as a client and told him they cannot work with him in any capacity due to his reputation. He rolls around in a Bentley with prostitutes and waddles his fat ass around downtown Austin like a pimp.
That gaudy creamed-colored Bentley is arguably worse than his choice in dress.
Savage Glassdoor review.
Hilarious
It gets better and better...
www.forbes.com/sites/nathanvardi/2019/08/16/the-fbi-raid-of-texas-real-…
Forbes really killing it with their glowing profiles of Nate Paul and Elizabeth Holmes...
Ah, double monk straps...the sign of a true criminal.
Leave monkstraps out of this.
surprised and a bit disappointed that there's no discussion of exactly what he might have done in here. 3M said their deal was legit. this is more than just misstating assets. right?
We don't know anything as of yet and we won't know the full truth until this all plays out, which could take years. My best guess is some form of ponzi-scheme, where they were effectively using new capital to cover losses, show gains and rake in fees to affiliated entities.
I've believed this firm was a scam for over four years now. They own big profile (expensive) pieces of land in Austin that were supposed to be under construction years ago, but never broke dirt. Carrying costs are real, especially with our high property taxes, and I could never figure out how they were paying for debt service, property tax, property insurance and etc. on these deals while the land sat vacant for years.
I worked there for a little while. There was one guy in accounting with the title controller that worked for Sheena. He knew nothing about accounting but was one of the longest tenured people in the company. He spent all his time shuffling cash between 200 bank accounts. Seemed a little shady
Don't know any details but chalk one up for stereotypes proving true. The image of that place was today's Stratton Oakmont. Never checked out their parking lot but I imagine a lot of Camaro's
This is probably the best write up I have seen to date.
Not a ton of information, but good color
https://atxrealestatenews.com/2019/08/16/world-class-capital-fbi-invest…
Agree. After I read it, I emailed and thanked her.
This is pretty funny, they requested an interview two weeks back, then went cold. At least I feel validated they had actually did have a lot going on. lol
.
Sorry if I am out of the loop, but what's the big deal about this person? The comments make him sound like a scummy person, but these types of people are everywhere.
There he is!! You're done for Nate
World Class Capital news has been a staple of the Real Estate forum for years.
Could be an interesting day on the "World Class" front. One of their properties is due for foreclosure sale today. https://atxrealestatenews.com/2019/08/29/world-class-capital-property-s…
The difference here is whether or not Paul can get financing given the FBI raid.
Rumor is he's hiding overseas right now.
He's in Mexico. Sheena Paul's wedding and as I hear looking for fresh meat for capital.
Yes, and the famous Carmelo's site was officially listed for foreclosure last week. In other news, I saw where World Class refinanced some Eastside land with a one year note from a Hard-money lender. Probably paying 2-4 points and 12%-14% interest. That's called burning it hot!
The wedding was in Texas and he is still around. Does anyone know what happened with the Oct 14 foreclosures?
This story has come to fascinate me for some reason.
I set up a news alert on Nate Paul and World Class Capital Group, and this story popped up:
https://www.statesman.com/news/20190924/austin-developer-buys-three-pro…
A developer named Ari Rastegar is buying World Class Capital Group's South 1st Street Portfolio.
As it turns out Ari Rastegar worked for World Class Capital Group for years and arranged hard money and equity for their deals, more to come on this I am sure.
I understood from the WC accountants that Ari had a $20m unsecured loan made to Nate at 20% interest. I would think that would ruin Ari when it defaults but I'm sure its not really his money anyways. He probably learned that one from Nate.
https://www.statesman.com/news/20190930/judge-halts-foreclosure-of-form…
Really need Endeavor to step in and do their thing here...
Heard that he's defaulting in order to secure new loans with better rates. Don't know how plausible that is but he does seem good at getting new loans on these foreclosing properties. We will see what happens with this battle against the trustee at 3M campus...
While this may be possible. Some guys know how to make money in business regardless of the situation on the way up or down. I don't know the owner, it seems like he may be on of those guys. However, my question would be how would the debt yield metric apply from the lenders perspective? Would he just do a rate and term refi? Or short refi?
Yes, well crooks and fraudsters make money in all cycles because they're fundamental business model is cheating their investors and lenders, not actually creating value. Pickpockets thrive in good economies and bad.
Game over for "World Class". Four of his entities have filed for bankruptcy, including on the 3M campus, which is in receivership. While it's four individual properties, he can't get financing except for hard money lenders.
https://www.statesman.com/business/20191106/four-nate-paul-led-entities…
It's been fun following the "JT Marlin" of CRE.
If I can figure out how to shorten it, I'm getting a license plate that says "Rogue Lender".
Do you have any idea how he was financing his purchases? CMBS?
How do you go about identifying and purchasing a single loan like ATX Lender 5 LLC did?
His borrowing runs the gamut. CMBS for his self storgae portfolio. Also, banks, credit unions, debt funds. These days hard money lenders.
So how did ATX Lender 5 find that specific loan and execute a purchase? Anyone have experience here? New thread?
They probably approached the lender (Ladder Capital) for a purchase of the note.
We've had various brokers and other intermediaries approach us about buying Nate's loans ... seems like a fools errand though ... if you notice, he's placed nearly every property into bankruptcy where the lender has tried to foreclose. You'll be tied up in court forever.
Isn't filing bankruptcy the go to move when being foreclosed on?
I figured the investors would factor this into the PP of the loan. Hence why you hear distressed buyers acquiring loans for 30-50 cents on the dollar.
I have not done this myself. But if someone can provide any insight or links into how to price a distressed loan. It would be appreciated.
The raid from last year was related to a Vista Equity Partners investigation, confirmed. Ballsy move to publicly shame their close ally and someone with I am sure a lot of information.
It's pretty obvious who GB310 is from the 4am time stamp. Don't you feel guilty trying to through your 'mentor' under the bus after trying to steal $20m from him. I guess you would if you had a soul.
I think the word you were looking for is “throw”.
But, that said, you may be on to something with this comment.
Who got thrown under the bus? Who is Vista Equity Partners?
Finally got done reading this entire thread, sweet jesus.
Is Rastegar tied up on all of this too? Seems there is a relationship there
I think Ari Rastegar used to work for Nate Paul... so it seems likely, but who knows?
Speaking of, are those guys legit? Seems like they are very flamboyant/extra, but do they actually do shit/are they "respected"? My gut says no.
A lot of Properties previously owned by World Class were deeded over to Rastegar. About 6 last time I scanned. 60M worth.
It seems Nate is still quietly fighting his lawsuits. What is new is that he has started someting called the "Nate Paul Initiative". Some kind of non-profit, and he's paid advertising to get it to the top of a browser search in order to try to crowd out "World Class" and foreclosure or FBI Raid.
My favorite part is that the "non-profit" uses an abundance of the same meaningless buzzwords that Nate relishes: 'Our mission is to invest in philanthropy, impact investments, and social change opportunities that create actionable solutions to level the playing field and maximize opportunity for all.'
Who "invests" in philanthropy?
The guy is the gift that keeps on giving.
Also, El Presidente definitely "invests in philanthropy".
I mean, I agree with you that Nate Paul is a scumbag and this is just a cover, but it is certainly possible to invest in philanthropy, or do double bottom line investment.
For example, if I sponsored some kind of competition (to invent something? new business idea?) in a low income community of color and the winner got a sizable equity check to go and build out that idea.... that's certainly investment in philanthropy. Certainly I see folks in my industry (affordable housing) who give up a few bucks on a deal in order to accommodate a community goal - maybe that's putting in social services for residents, or taking a lower AMI base than is otherwise allowed.
I agree that most people who are using the term are full of shit and just want to be able to point to how "progressive" they are to deflect from the fact that they're the exact opposite. But it's certainly possible. Doing well by doing good is a thing.
There's news out now about Nate Paul being tied to allegations on the Texas Attorney General
This can’t be good for Nate:
“Paul’s alleged relationship with Texas Attorney General Ken Paxton has sparked a major legal and political whirlwind in the top echelons of Texas government. Seven senior Paxton aides have filed a criminal complaint.”
https://www.statesman.com/business/20201004/austinrsquos-nate-paul-tied…
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