"We had never invested in real estate until Ron introduced it to us. We initially purchased five lots and have sold all of those within six months to a year. We continued to buy additional lots, which we plan to sell in the next few months."
Thus wrote a couple, Linda and Daniel, in a promotional newsletter back in the heady days of 2006. They were writing about Ron Berg, a principal with RnR Solutions, who sold them properties at Grey Rock, a North Carolina community. Berg and RnR touted through its marketing materials and seminars that investors could earn $100,000 for an investment of $250,000. For a while, it seems, the couple were able to buy and sell lots at Grey Rock, using the real estate investment style called "pyramiding" to build up their profits.
Today, however, Linda and Daniel's are probably totaling up their losses. Grey Rock's parent company, Land Resource, has declared bankruptcy after walking away from its 19 communities, most of them not yet completed. More than 400 owners at Grey Rock, where only one model home has been built in four years, are wondering if their properties will have any residual value. As for RnR, their web site has been taken down, and it is probably a waste of time to visit their offices in New Jersey.
This is just another case of the old saw that if something seems too good to be true, it probably is. Some people learn that lesson the hard way.
Our friend Terry Molnar at Marian Schaffer Realty in Chicago is following the Grey Rock fiasco and its aftermath. You can read his article at Southern Way of Life.
