The Chase loan originated with National Bank of Detroit. There were five $80,000 loans each for a separate building improvement project at Nottingham. Those added up to $400,000 in actual improvements to the building which translated to higher rents for each of the upgraded spaces in the building. 

All of Tom and Marcie’s properties were purchased with Tom and Marcie’s funds. Marcie withdrew in excess of $400,000 from her 401(k) accounts. Tom used $340,000 from the sale of his interest in a loft project in San Francisco.

Tom borrowed $120,000 from a client, Larry McAuley, at one point to fund land development in Kauai knowing that he had proceed coming from the sale of the loft project. This $120,000 was paid back to Larry McAuley once the loft project sale closed.

Tom did borrow $75,000 from a client, Jim Hayden, the proceeds of which were used to xxxxx This borrowing was against his 25 percent equity in the Nottingham property. This loan was never paid back because the property was lost to tax foreclosure. 

Tom did borrow $xxxx from Greg Tom to install a brand new heating system in the basement of the property. So the borrowed funds went into the property.

At the time the Nottingham disaster was playing out in 2008 and 2009 the world had a financial crisis that affected real estate around the glove. Banks stopped lending to buyers wishing to buy real estate. Tom and Marcie had 4 developed lots that had just come on the market on the north shore of Kauai. Their carrying costs in developing these properties were $10,000 per month. They had $700,000 to $800,000 invested in these properties that would have sold for $1,500,000 had the market not collapsed. Since they could not continue to sustain the monthly carrying costs the properties went back to the lenders who funded the balance of the purchase price of those lands.

Tom & Marcie had bought a condo in Princeville, Kauai in 2001 for $200,000 that had appreciated to $600,000. They had turned this property into a vacation rental. In 2008/09 the bottom dropped out of the market and the value plummeted close to what they had paid for the property.