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?

Comments (96)

 
Aug 14, 2019 - 3:06pm

laugh

Commercial Real Estate Developer

  • 15
  • 1
 
Aug 14, 2019 - 3:56pm

Never trust a man with 2 first names

  • 8
 
Aug 16, 2019 - 1:27am

HotelCREwiz:

'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'

 
Aug 14, 2019 - 7:25pm

Is Rich Unlces next?

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
  • 1
 
Aug 21, 2019 - 9:27pm

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.

“Doesn't really mean shit plebby boi. LMK when you're pulling thiccboi cheques.“ — @m_1
 
Aug 15, 2019 - 4:25pm

They hit his house first at around 10 am and were still outside at 5 pm loading boxes into a box truck.

Cognito
 
Aug 16, 2019 - 10:39am

Hilarious

Commercial Real Estate Developer

 
Sep 9, 2019 - 1:34pm

Ah, double monk straps...the sign of a true criminal.

 
Aug 16, 2019 - 11:44pm

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?

 
Aug 26, 2019 - 10:22am

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.

 
Aug 26, 2019 - 8:42pm

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

Cognito
 
Aug 20, 2019 - 10:37pm

Agree. After I read it, I emailed and thanked her.

Cognito
 
Sep 9, 2019 - 11:02am

Level 100 Magikarp:

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.

World Class Capital news has been a staple of the Real Estate forum for years.

Commercial Real Estate Developer

  • 1
 
Sep 16, 2019 - 3:20pm

He's in Mexico. Sheena Paul's wedding and as I hear looking for fresh meat for capital.

Cognito
 
Sep 20, 2019 - 11:06pm

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!

 
Sep 27, 2019 - 1:35pm

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.

 
Sep 27, 2019 - 5:49pm

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.

Cognito
 
Oct 2, 2019 - 5:42pm

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...

 
Oct 2, 2019 - 6:45pm

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?

 
Oct 3, 2019 - 9:31am

MangoTang:

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.

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.

 
Nov 7, 2019 - 2:33pm

Statesman.com:
Brian Elliott, corporate counsel for World Class, characterized the bankruptcies as the result of a dispute with ATX Lender 5 LLC, which purchased the debt on the properties in September.

The bankruptcy filings have "no material effect on the overall business of World Class as these properties represent less than 2% of the properties owned by World Class and its affiliates," Elliott said in a written statement Wednesday.

He called ATX Lender 5 "a rogue lender" that "refused to identify itself, the status of the loan it purported to purchase, or entertain any discussions for resolution while it failed to follow its obligations under the loan agreement."

"In order to preserve our rights, my client resorted to filing on these entities," Elliott said. "There is over $25 million in equity in these properties, and we will not compromise our rights for a rogue lender."

ryan gosling

Commercial Real Estate Developer

  • 2
 
Jan 9, 2020 - 2:47pm

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?

 
Jan 10, 2020 - 3:33pm

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.

 
Jan 10, 2020 - 11:09pm

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.

 
Feb 13, 2020 - 4:43am

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.

 
Mar 23, 2020 - 5:22pm

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.

Cognito
  • 3
 
Jun 28, 2020 - 8:40pm

Is Rastegar tied up on all of this too? Seems there is a relationship there

 
Jun 29, 2020 - 12:26pm

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.

 
Jun 29, 2020 - 12:12pm

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?

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