Marco Kozlowski's promise of 100% financing not kept, former students say
In a YouTube video, Kozlowski claims he was mentored by Virgin Group's Richard Branson
Some investors who paid tens of thousands of dollars for Marco Kozlowski's real estate mentoring program say he failed to deliver on a promise to finance 100 per cent of their investments in U.S. property.
Until a recent statement to CBC News, Kozlowski was promising would-be investors they could get funding for real estate deals in the U.S. through him and his organization.
"All my students get access to cash so you can buy properties in the U.S. You can use my money to buy, using none of your own money," proclaims a Kozlowski marketing video featuring three Canadians who claim to have made money in just seven days.
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At a series of free seminars in Metro Vancouver earlier this month, Kozlowski's salesman Lance Robinson made the same promise.
"How many of you would love it if we fund every single one of your good deals out of our fund in the U.S. so you never have to take a dollar out of your own pocket?"
100% financing 'only reason I joined'
"That's the only reason I joined, that 100 per cent financing and it's guaranteed" says Vancouver investor Corrina Tanizawa, who paid Kozlowski more than $20,000 for his advanced real estate training course.
"I've been investing in the U.S. market for quite a while and the challenge is to find a lender," she told CBC News.
Tanizawa first paid for a $3,500 three-day training seminar with Kozlowski's organization. But she says that in order to get access to any lending funds, she was required to join Kozlowski's mentorship program, offered for $15,000 to $150,000 US. But even then loans weren't available.
Tanizawa chose the $150,000 level — the Diamond program — but elected to pay by instalment. She paid one instalment of $20,000, but was soon disappointed in the program when the financing fell through on a Chicago sixplex.
"So I brought them another deal and another deal and another deal and none of them closed."
She says she eventually found another lender and purchased the Chicago property.
Ultimately Kozlowski refunded all her money.
'Bank of Marco'
"That's why we signed up, was the funding advertised it as the 'Bank of Marco,' and then there was none," says Manuela Noel who, along with her husband, paid Kozlowski $100,000 for advanced training last year.
"Being involved in Marco's program for the last year, I have no faith in his program, or in him," says Mike Noel, who isn't aware of anyone from his class who obtained financing from Kozlowski.
Noel breaks down in tears, saying he regrets encouraging two young Vancouver brothers to sign up.
"They both signed up for the $100,000 course. They can't afford that," said Noel, who says they went into to debt to pay Kozlowski, and were never financed.
"Long on promises, short on delivery," he said of Kozlowski.
'Mentored' by Richard Branson
Manuela Noel said one of the reasons she and her husband trusted Kozlowski was because he claims his mentor was Richard Branson.
In a YouTube video, Kozlowski states, "I worked very closely with Richard Branson for quite some time. I was mentored by him — a very special program that I'll discuss at a later time. It was a very good experience, I learned a lot from him."
At the free seminars in Vancouver, which CBC News attended, a photo of Kozlowski and Branson was on the big screen and his salesman told the audience that "Marco's friend, Sir Richard Branson," was the one who gave Marco the idea to teach people his real estate system.
In a statement to CBC, Kozlowski said, "The statement is not accurate and I have now provided Lance with the facts … I have worked briefly with Richard Branson, but he did not encourage me to start teaching real estate."
Kozlowski used that same photo showing him with Branson in an advertisement in the Vancouver Sun.
But Branson's communications director, Christine Choi with Virgin Management USA, says Branson has nothing to do with Kozlowski's business.
"The two may have participated in and met at a conference where they were among the speakers, but we have no insight into his business nor authorized this use," said Choi in a written statement.
'Funding for flips'
At first, when asked by CBC about his lending policies, Kozlowski stated in an email that he and his organizations "provide transactional funding for flips."
"We provide the funding in order for our students to buy the property and the funds are returned to us within hours or days when the new buyer purchases," he wrote, in a statement Nov. 14.
Kozlowski says if students want to hold rental properties, his team will only help them find "non-bank, private lenders who will lend based on the merits of the deal."
No longer funding students
Yet four days later, in an email on Nov. 18, Kozlowski provided a different answer about financing, writing: "We no longer offer in-house funding to our students."
He said his program has been so successful that "our funding reserves were depleted more quickly than anyone expected," and wrote: "For a short time a limited number of students were unable to access in-house funding to help complete their real estate transactions."
"We understand completely that this has been frustrating for them, and we worked hard to find alternatives," he added. "We help students who require financial support to identify external sources, including private lenders and other non-bank lenders." .
Yet just two days before that apparent change in policy, his sales staff were telling would-be investors in Toronto and Vancouver that if they signed up for future training seminars, funding would be available.
"We established a fund specifically to fund our student's deals," said Robinson to a crowd of Vancouver-area would-be investors, explaining they don't even need to make a deposit because Kozlowski' would use his "investor documents."
And in Toronto a speaker told potential students they could access Kozlowski's fund if they paid tuition to learn his system.
Consumers advised to be cautious
B.C.'s Financial Institutions Commission advises consumers to be cautious when it comes to free real estate seminars.
"We encourage those attending seminars like this to approach any investment opportunity with caution and to seek professional investment advice," said a spokesperson for the Superintendent of Real Estate.
"It is important that anyone who feels that a product or service is using false and misleading or deceptive marketing practices to submit a complaint to the bureau," said Phil Norris, spokesman for the Competition Bureau of Canada.
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With files from Paisley Woodward