Real Estate

Monday Morning Cup of Coffee: Manafort to forfeit $21.7 million in real estate holdings

Plea deal includes five properties and three bank accounts

Monday Morning Cup of Coffee takes a look at news coming across HousingWire's weekend desk, with more coverage to come on bigger issues.

First up, in case you missed it, Ryan Serhant, New York’s biggest real estate broker and star of "Million Dollar Listing New York," spoke at HousingWire’s first-ever summit on Friday morning. And guess what. It was a hit.

Serhant spoke about his life and the circumstances that led him to real estate, where he scrapped for a foothold and faked it 'til he made it. His keynote drew a standing ovation from a very impressed and thoroughly entertained crowd at the Renaissance Dallas Hotel.

You can read full coverage of Serhant’s keynote from HousingWire’s own Jessica Guerin right here.

Up next, we have new developments on the Paul Manafort situation.

According to a report from NBC News, Donald Trump's former presidential campaign chairman Paul Manafort will forfeit an estimated $21.7 million in New York real estate assets as part of his recent plea deal, which includes his apartment in Trump Tower worth an estimated $3 million.

Manafort pleaded guilty to two counts ­– federal conspiracy and conspiracy to obstruct justice – and agreed to cooperate with Special Counsel Robert Mueller in his investigation of President Trump’s alleged involvement with Russia. Manafort also admitted guilt to 10 outstanding counts from his earlier trial in Virginia, which prosecutors could use against him should he renege on his promise to cooperate with Mueller.

Manafort’s plea deal mandates the forfeiture of his Hamptons home ($7.3 million), three apartments in Manhattan, a Brooklyn townhouse, three bank accounts and a life insurance policy.

Despite these forfeitures, Manafort won’t be destitute when he makes it out of the pen. He negotiated to hang on to one of his bank accounts and according to NBC News, he still has at least three properties left in his name worth an estimated $6 million.

Next up we have Blackstone Group making major moves, angling to raise $18 billion – that’s billion with a B – to create its biggest real estate fund ever, according to a report from Bloomberg’s Sabrina Willmer and Heather Perlberg. The last fund, Blackstone Real Estate Partners VIII, closed at $15.8 billion.

The new fund will be used to invest in distressed properties around the globe, including residential properties.

Blackstone is striking while the iron is hot. According to Bloomberg’s report, investors seeking to hedge against inflation and diversify their holdings are betting big on property assets these days.

Blackstone is being rather hush hush about the fund and declined to comment for the Bloomberg article, but judging from the performance of its prior funds, it looks like this one is slated to do quite well.

Moving on, we have another tale of dastardly deeds in the real estate world.

On Saturday, Fortune reported that a New York real estate broker pleaded guilty to a loan scheme that defrauded banks of $3.5 million, a crime for which he will spend 21 months in prison.

Micahel Arroyo was sentenced to 21 months in prison and five years of supervised release for conspiracy to commit bank fraud by “shotgunning” loans, a practice where the fraudster submits several loan applications to different banks at the same time in order to underhandedly acquire multiple home equity lines of credit.

Arroyo and his partner in crime Rafael Popoteur obtained loans of more than $500,000 on residential properties in New York and New Jersey from multiple banks between 2012 and 2014, according to Department of Justice officials.

Popoteur also pleaded guilty to conspiracy to commit bank fraud and was sentenced to thee years of supervised release, including one year of house arrest.

In other news, there has been a slew of partnership launches and expansions in the industry lately. Here is a summary of a few that took place recently.

SWBC Lending Solutions teamed up with Veros Real Estate Solutions to offer and end-to-end collateral valuation and analytics services. SWBC Lending will now offer Veros’ automated valuation model services.

"We are thrilled to have partnered with Veros Real Estate Services,” SWBC Lending Solutions CEO Ted Robinson said in a statement.

“They are the leader in AVM modeling and technology, and our customers will benefit greatly from these innovative products,” he added.

New Penn Financial has selected Tavant’s FinLeads, a component of the Tavant VELOX platform, to transform its lead engagement process.

“New Penn Financial specializes in finding the right loan for every borrower and FinLeads allows us to connect with customers in real-time. The data-driven experience coupled with a true omni-channel customer engagement will effectively convert leads to loans,” New Penn Financial Senior Vice President of Direct to Consumer Lending Rob O’Han said in a statement.

FinLeads is a customer engagement platform that uses algorithms to automate the journey from lead to loan issuance.

And finally, Bungalo, an Austin-based digital home buying platform just expanded into North Texas, according to the Dallas Business Journal.

The startup is backed by Amherst Holdings which invested $225 million to launch the platform and has pledged an additional $1 billion to fund Bungalo’s expansion in 2019.

With this most recent expansion, Bungalo now operates in three markets: Austin, Dallas-Fort Worth and Tampa, Florida but only sells homes in the last two, for now.

That’s it for this week’s Monday Morning Cup of Coffee. Have a great week!

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