Report: #1158888

Complaint Review: Property Management Inc. Bankruptcy Steven Hart

  • Submitted: Tue, July 01, 2014
  • Updated: Wed, April 08, 2015
  • Reported By: John — Virginia
  • Property Management Inc. Bankruptcy Steven Hart
    2940 WEST MAPLE LOOP DRIVE #104
    LEHI, Utah
    USA

Property Management Inc. Bankruptcy Steven Hart Property Management Inc. Franchise Defaults on SBA Loan LEHI Utah

*REBUTTAL Owner of company: Steven Hart's Response

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I was looking at the Property Management Inc. franchise opportunity, and Item 3 of the FDD lists a bankruptcy by President Steven Hart.  The bankruptcy filing is a public record on the PACER website, so I looked it up online. 

Among his creditors was the Small Business Administration, which gave him a $49,000 loan.  The taxpayers apparently will not get their money back.  He also apparently defaulted on a $2.7 million "development loan".

Here's the curious thing, though.  At the time of his bankruptcy filing, Steven Hart claims he only received $207.47 per month as his salary for being President of Property Management Inc.  But just two months later when trying to reaffirm the loan on his Cadillac Escalade, he claims his household income had increased by more than $7,000 per month because "my company is doing better now so I am now taking a larger income."

Property Management Inc. is supposedly doing better a mere two months after the filing of the bankruptcy, but at the time of the bankruptcy, Steven Hart listed the worth of his share of Property Management Inc. as zero.  That's right, $0.00. 

I don't believe that a company that can produce such a large amount of money each month just two months after a bankruptcy was filed was worth nothing.  I'm sure the SBA and the other creditors would have liked to have seized his share of the company and resold it in order to get some of their money back.  Maybe the SBA will re-open the bankruptcy case based on this and be able to seize the company anyway.

And this is a person and a company that wants to sell me a property management franchise?

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This report was posted on Ripoff Report on 07/01/2014 04:03 PM and is a permanent record located here: http://www.ripoffreport.com/reports/property-management-inc-bankruptcy-steven-hart/lehi-utah-84043/property-management-inc-bankruptcy-steven-hart-property-management-inc-franchise-defaul-1158888. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

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#1 REBUTTAL Owner of company

Steven Hart's Response

AUTHOR: Steven Hart - (USA)

As the President of Property Management Inc. (or "PMI" as we like to refer to it), this "report" is troubling to me. However, it is telling that this "report" is NOT made by a franchisee (at the time of posting this, we presently have 102 franchisees across three countires), a property owner (our franchisees presently manage approximately $1.0 billion is assets) or anyone that has anything to do whatsoever with PMI. In fact, the clear intended purpose of this "report" is to harm me, personally, and to try and use my personal misfortune during the real estate crisis to dissuade potential franchisees from joining our Company.

It seems more than a coincidence that this "report" was filed on a public website July 1, 2014, at a time when new competitors had just entered the market and existing competitors were trying to find a way to squelch PMI's rapid growth and obvious success.  In fact, I don't know of anyone named "John" from Virginia that was ever considering purchasing a PMI franchise. This "report" was likely made by a competitor, self-interested in diverting business from PMI.  In any event, it is certainly a stretch to believe that a possible franchisee, interested in buying a property management franchise, would go to the trouble of creating an account on PACER (a paid database primarily used by attorneys to access federal and bankruptcy court cases and docket information; a database that requires the skills of an attorney or legal staff to navigate, locate and pull information) and then spend hours reading documents and developing the manipulated "story" told in the author's "report".

As anonymous internet postings often do, this "report" manipulates the circumstances surrounding my 2011 Chapter 7 bankruptcy filing. It certainly IS NOT reflective of the truth, and has nothing to do with PMI. In 2006, as real estate prices were climbing and development was at its peak, I was developing a very large multi-million dollar parcel of land and had personally guaranteed a loan for this property. And then, in 2007 (as we all now unfortunately know), the real estate market crashed across the nation and took the value of this multi-million dollar parcel with it. While I worked as diligently as possible to keep the development solvent, after 5 years of effort, time, many capital contributions, the project failed. The banks simply would not loan the money required to finish the development of the property. Sadly, as was the case for so many in this country, I was left in a terrible personal financial position. Because I had personally guaranteed this loan, my family lost almost everything, including our home.

I am disappointed to see someone attack me, but find it dreadful that someone would attack PMI. PMI has employees that work diligently each day to improve and make our systems better. And that depend upon PMI for their livelihood. We have talked about this "report" in numerous company meetings, and the PMI Team knows that I believe that one of the reasons PMI has been successful, is because we always try to learn from my mistakes. And as I and many in this great country learned recently, real estate prices can be very volatile. But, I have learned that's not the case with property management. In fact, IBISWorld just reported that from 2009 to 2014, the property management industry grew annually by 3.1%. This just confirms what those in the industry have always known... property management is far more stable and recession-resistant than virtually any other industry.

Building one of the nation's largest property management franchises has not been easy. As with many start-ups that are privately funded by family and friends, for several years, as we built the foundation for PMI and absorbed start-up costs, I took little to no salary from PMI. And despite the difficulties faced by many during the Great Recession, I believed in myself and in the company.... and over time, so have many others. In fact, as others have come to recognize the value proposition that property management provides, we have grown faster than I thought we ever would. And I credit much of this growth to the great team of professionals that PMI has assembled over the years. We aren't the only property management solution available, but we believe we are the best. And others are recognizing us as a result.

Right now, PMI is one of the fastest growing franchises in the country. In January 2015, we received Entrepreneur Magazine's coveted Franchise 500 award, and we were just recently named one of the 100 Fastest Growing Franchises in the nation. We presently have more than 100 franchises, and hope to keep growing by leaps and bounds for years to come. If you would like to learn more about PMI, please visit us at www.PropertyManagementInc.com

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