Summit Financial and Investment Group, Kim Powell collected fees did not make loan South Jordan UT
RED FLAG FOR SUMMIT FINANCIAL INVESTMENT GROUP (SFIG) AND KIM POWELL. THEY DO NOT DELIVER PROMISED FINANCING. This is not the classic simply get the money upfront and disappear operation that exists in the financing business. In our opinion Kim Powell is not a typical con guy. He is very thorough and all the doted I’s and crossed T’s are taken care of.
The bottom line is the same, Kim Powell and Summit Financial Investment Group get upfront money and do not perform. We had a hotel construction project that was a bit of nightmare. We provided the usual underwriting information, including market study, pro-forma forecasts etc., and paid a deposit. The information was valid and remained consistent.
We received a preliminary loan approval and an underwriting document list requiring 74 different documents. Our project experienced a significant time delay because we encountered wetland issues on the property that could only be addressed during the growing season. Because of the long delay our responses were not within the original specified time, however SFIG continued to process the underwriting documents and indicated the financing would be completed.
There was no indication that the loan commitment had changed. At the time when the underwriting documents had all been provided and accepted and the site plan had been submitted to and approved by the local agencies, SFIG advised that things were in place for the final requirement, a MAI appraisal. We were billed for and paid SFIG (not the appraisal firm) for the appraisal.
We obtained a copy of a preliminary draft from the appraisal company that included, among other conclusions that:
• The best use of the site was for a hotel â—¦ "Development of the site for hotel use is the only use that meets the four tests of highest and best use. Therefore, it is concluded to be the highest and best use of the property as if vacant.”
• The recommended size and type of hotel was consistent with our plans â—¦ "Based on our analysis, there does not appear to be any alternative use that could reasonably be expected to provide a higher present value than the proposed use. For these reasons, hotel use is concluded to be maximally productive and the highest and best use of the property as proposed.”
• The value would be commensurate with the cost â—¦ "Based on our analysis of the market there is currently adequate demand for hotel use in the subject’s area.
It appears that a newly developed hotel use on the site would have a value commensurate with its cost. Therefor hotel use is considered to be financially feasible.” Kim Powell intercepted the draft copy of the appraisal and after communication with the appraisal company delivered a dramatically different final appraisal. It reversed the conclusions noted above and eliminated most positive elements in the draft copy.
Powell delivered a final appraisal with a value approximately 20% below cost. Kim Powell then falsely accused us of presenting forecasts that overstated prospective occupancy and rates. In fact our numbers were conservative compared to recommendations in the market study and actual results in the market.
Powell also stressed that the value of the real estate we invested in the project was understated and that had a negative impact on the appraised value. In fact the higher land value increased our investment and the value of the project. The original SFIG commitment was to provide construction funding for the lesser of a specific dollar amount or 75% of the value of the project.
The low ball appraisal and Kim Powell’s accusations became the justification for SFIG to not provide the funding that had been committed. SFIG refused to provide any funding, in spite of their original commitment. They also refused to refund any portion of the money deposited with them. In my opinion the situation has all the appearances of a fairly elaborate scheme to justify a predetermined negative decision.
In a candid conversation Kim Powell made the comment that "they make the most money on the deals they don’t do.” We believe Kim Powell collected money, never intending to make a loan. We suspect that Summit Financial Investment Group most likely was not capable of providing the amount of funding they promised and at the very least Kim Powell never intended to perform the terms of the commitment. In my opinion Kim Powell appears to be in the business of collecting fees, not making loans.