Pasadena story: From flipper to accused fraud ringleader
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In the 2004 photo at right, an Ameriquest account executive named Jeanetta Standefor makes her pitch to appear on a cutting-edge cable TV show: She’s talking about the quick money she’s going to make remodeling a Pasadena condo and reselling it for a quick profit. Out with the Formica, in with the granite counters. She’s a flipper!
Fast forward four years to today’s newspaper: ‘The FBI arrested the president of a Pasadena company Wednesday, a day after a federal grand jury indicted her on fraud charges, accusing her of operating a real estate investment scam. The 11-count indictment, handed up in Los Angeles, charges Jeanetta M. Standefor of Altadena with wire fraud, mail fraud and money laundering.’
Same woman? From flipper to accused fraud ringleader? A parable for our times? I asked FBI agent Linda English, who spent Wednesday in federal court with Standefor and took a look at the photo above. ‘It is the same woman,’ she told me. I put in two phone calls to Standefor’s lawyer, and haven’t heard back.
The fraud charges against Standefor have nothing to do with flipping. She’s accused of running a Ponzi scheme in which she allegedly convinced 600 people to invest $18 million dollars in what was described as a ‘foreclosure reinstatement’ program. Investors allegedly believe they would make returns of up to 50% in 30 to 45 days by investing in a program that helped distressed homeowners refinance their mortgages and avoid foreclosure. The government alleges there was no such program at all, and that Standefor simply pocketed some of the cash -- and spent $1.9 million on cars, a fancy wedding and honeymoon, home renovations and other personal expenses.
Big giant hat tip: Geek Seek.
Photo Credit: L.A. Times.
Those who want to read the entire, original profile of the aspiring flipper, click below, the whole thing is there.
Flipping for fame and fortune
* Buy a house, fix it fast, try to sell it for a profit. It’s a way of life in L.A., and it’s headed for TV.
By Lynell George, Times Staff Writer
Relying mightily on her powers of imagination, Jeanetta Standefor paces the length of an unremarkable bare box of a dark living room of an equally nondescript condo complex in Pasadena.
Though just a week or so into escrow, Standefor already has big plans: ‘I want to replace that acoustic ceiling,’ she waves her hand at the ‘cottage cheese’ above. ‘I’m thinking, I want to do something Mediterranean in this room because that’s popular now.’ She muses, then heads into the next set of rooms. ‘That Formica? When was the last time you’ve seen that in a kitchen? I think I want to resurface it in granite,’ she decides, then strolls toward the rear rooms.
‘And here,’ she says, standing in the center of a forlorn-looking master-bedroom suite, ‘I’m going to work on different window treatments. Maybe plantation shutters. Then some Berber carpets.’
Even in the 100-degree heat, Standefor is unwilting. She ticks it all off in that bright-eyed, butter-cream cheerful spiel that we’ve become accustomed to -- and read as ‘enthusiasm’ -- on television. That’s because, ultimately, this will be for television -- or so she hopes.
That’s right. She isn’t sharing these grand plans with friends or curious potential neighbors but with two casting associates, Jennifer Ayala and Lindsey Topping, who are on the prowl for potential participants for the latest wrinkle in reality television: rehabbing homes to resell -- or ‘flip’ -- for big profits.
Tentatively titled ‘Property Ladder,’ the series will air on the Learning Channel next spring. It takes its name from its British inspiration produced by BBC’s Channel 4. Like its counterpart, the show will follow a series of novice real estate developers through renovation and resale. Concentrating on Southern California, the show hopes to tap into the ready-made drama of the insanely competitive -- and even more insanely priced -- California real estate market.
It was only a matter of time. Real estate stories in California have transformed into this generation’s turn on the amazing fish tale: the quest, the wrangling and the lament of the one that got away. Inherent in those over-heated house-hunting scenarios are ready-made narrative tensions rife with possibilities for outrageous success or dismal failure. So producers, always in search of new reality TV formats, are only half a step behind.
Standefor, a senior account executive at Ameriquest Mortgage Co., is auditioning to become one of the first-time flippers. She says it began to dawn on her, as she helped clients get into homes or acquire rehab properties, that she could do it herself. She bought this property for $285,000 and hopes to make at least a $50,000 profit.
‘I just began to realize that there are a lot of people who don’t think that it can be done, alone, by a female,’ she explains. ‘I wanted to show people that it isn’t that difficult.’
The ground rules for ‘Property Ladder’ are simple: Novice flippers will be coached by veteran flippers on the ins and outs of rehabbing property. They will have three to five months to purchase the property, rehab it and sell it (or, in real estate speak, to ‘turn it over’). Each episode is an individual stand-alone story that will track the process from beginning to end. The hope: that each rehabber will get his or her asking price.
Reality TV and real estate are proving to be a good mix. Viewers have already looky-loo’d deep into the nitpicky squabbles and tear-jerking epilogues of redecorating and rehabbing shows, from ‘Changing Spaces’ to ‘Extreme Makeover -- Home Edition.’ But why stop at rethinking one room or even an entire house when one can delve into the risky business of flipping? What happens when the amateur flipper finds that a simple rehab has devolved into a waking nightmare -- termite-infested walls, mildew, archaic or byzantine electric wiring? How they recover from it -- or don’t -- is the stuff of drama.
Overheated market
Flipping a home for profit has a few forms. There’s the quick turnaround that might find the property back on the market mere days after a sale reaping a profit of, say, $10,000 to $50,000. Then there is the multi-stepped version, rehabbing an on-the-wane property, then turning it around -- flippers hope -- for handsome profit.
In recent years, the region has seen a dramatic increase in flipping. In a recent report in the Los Angeles Times’ Business section, real estate experts noted that the number of homes sold last May after having been owned six or fewer months by the sellers was 47% higher than it was last year. These constituted 3.1% of all homes sold in the month, nearing the flipping record, set in early 1989, of 3.5%, according to DataQuick, a La Jolla real estate information firm.
Real estate experts see the trend as a sign of an overheated market. Television, however, sees it as a potential hot property, so to speak.
‘Property Ladder’ executive producer Tracy Verna notes, ‘The journey for each flipper is different.’ Verna, an executive in ‘lifestyle programming’ for FremantleMedia Inc., which produced ‘American Idol,’ said the show aims to ‘follow the trials and tribulations of these new rehabbers. We want to show what really happens. How renovating impacts a family [or] a single person. What if the balance of your life is thrown off? What happens when you are paying two mortgages? What happens when you open a wall and find that your electrical is a mess? There’s additional debt they’re incurring; they’ve got a deadline staring them in the face. The project is an albatross around their neck.’
Well, for ratings’ sake, they can only hope.
The producers are looking for half a dozen owners who will be doing some, if not all, of the rehab themselves. They will be coached by a host (yet to be named), a veteran developer who will help novices prioritize and make decisions. The show is scheduled to begin taping next month.
Early on, the producers cast a wide net: contacting real estate agents, attending design shows, trolling lumberyards and encouraging potential flippers to navigate to the show’s website (www.propertycasting.com) to see if they qualify. Already Verna -- who is also executive producer of another new reality series, ‘How Clean Is Your House?’ -- and crew have seen about 100 potential flippers and have tried out 300 prospective hosts with experience in the rehab fray.
The host’s role will be to help novice developers to keep cool and alert them to potential roadblocks. The husband-wife team of Russell and Paige Hemmis, local real estate investors who own their own company, RTO Investments, decided to toss their hats into the hosting ring. ‘There are things you just don’t find out about until you start tearing things apart,’ Russell Hemmis notes. ‘But the idea is not to be discouraged. Real estate is gold. It doesn’t disappear.’
‘That’s a pain’
Auditioning for the role of novice flippers, Chris Mullen and Mark Anthony Puopolo vamp for the video camera. Blueprints in hand, the couple stand on the walkway of the nearly 100-year-old California Craftsman, on which they just closed escrow. It’s a corner lot not far from Standefor’s property, on a lively tree-laden street. Kids whiz by on scooters, and an ice cream truck trundles by with its woozy music box, creating an idyllic suburban-urban nostalgic postmodern backdrop for the audition tape.
There are cosmetic changes they’d like, including a better garden to replace the dry yellow grass and scruffy succulents. ‘I’m thinking trellises and wisteria,’ says Puopolo. They want to add a 700-square-foot master bedroom and bath suite and know they need to apply for variances. ‘The major issue is the roof,’ says Mullen. ‘We found out there is asbestos. That’s a pain, and we figure that it’s going to cost a little bit more than we expected.’
They paid $487,000 for this three-bedroom, one-bath home and hope to sell it for $800,000 to $900,000, after five to six months of work. ‘It’s the small costs that tend to add up quickly,’ says Puopolo. ‘We worked out the numbers separately, and together we decided that our goal is to spend between $100,000 and $150,000.’ What they fear most is merging the personal and the professional and the stress that it might have on their partnership, says Mullen. ‘Stress affects me differently,’ says Mullen, 40. ‘It slides right off. With Mark ... he tends not to listen.’
‘I’m more of a realist. Chris is more of an idealist,’ says Puopolo, 32, standing off to the side. ‘I need to improve on my listening. But he needs to be realistic.’
Real estate experts see theatrical potential. ‘If they are going to be honest about it and show all the steps, it could be very interesting,’ says Gene Hamilton, who along with his wife, Katie, wrote ‘Fix It and Flip It.’ ‘There are so many factors -- the market, interest rates. And for that reason, we usually recommend a strategy that is flexible. A deadline certainly ought to work for entertainment.’
‘Managing the job is really crucial,’ says Katie Hamilton. ‘And if you don’t work it out, it’s a good way to flush out the relationship.’
Standefor is ready, come what may. She figures on spending $15,000 for her rehab but can go as high as $20,000 for everything from painting to new fixtures, countertops and even ‘staging’ the property -- setting up furniture to give potential buyers a lived-in, ‘you could be home right now’ feel.
‘I’ve done a lot of research on my own talking to other people, taking classes,’ Standefor tells the camera, finishing up her audition. ‘I researched the neighborhood to find out who’s the target market and did research on what styles are popular in the marketplace. For me it would be a first-time home-buyer. Maybe a single or a small family. So I have to keep that in mind with my rehabbing theme.’
Reworking this collection of dark, characterless rooms, she knows, will take a world of more than imagination. What she keeps at the front of her mind: ‘The reason I’m buying this is to make a profit’; and when the going gets tough, she’ll remember: ‘I’m pretty handy with a paint brush.’
Whether ‘Property Ladder’ will launch speculators scrambling for gold or scare them away as a cautionary tale remains to be seen. Gene Hamilton compares the concept to that of the ‘Antiques Roadshow’ on PBS.
‘And,’ exclaims Katie Hamilton, ‘look what that did for junk! I think it’s a good concept for a show, better than a lot of screwy things out there like eating worms.’