They are young and famous. When your divorce is the subject of a Today show interview, you have to be famous, right?
Christina and Tarek El Moussa are the stars of the HGTV show, Flip or Flop. They buy homes, fix them up and sell them…usually at a handsome profit. They live and work in Southern California.
But they are also connected to a business whose real estate dealings in Niagara Falls is the subject of an investigation by the New York State Attorney General’s office.
In August, 2 On-Your-Side reported that Arizona-based Return On Rentals had flipped (bought and sold) 90 properties in the Falls, making as much as $1.9-million dollars in the process.
But while Return On Rentals says it sells rehabbed, residential real estate there are questions about how much work went into the Niagara Falls properties that it sold. Only nine of the properties had building permits on file. Return On Rentals has not provided documentation that demonstrate its properties were renovated prior to sale.
This discrepancy appears to be at the center of the on-going investigation.
What’s this got to do with the El Moussas?
2 On-Your-Side spoke with ten people who bought property in Niagara Falls from Return On Rentals. All of them say the first step in their real estate transactions was with another business close to the El Moussas, Success Path Education.
And if you go to the Success Path website, you’ll see all sorts of pictures of the El Moussas. Success Path offers real estate seminars around the country. The site says “whatever your skill set” the company’s seminars can teach people “how to become professional, savvy & creative property investors” as part of a “wealth creation strategy”.
Whose knowledge is Success Path selling? The El Moussas’. A video on the website shows an unnamed woman heaping praise on the El Moussas.
The unidentified pitch-woman in the video says, “Success Path is a cutting edge real estate program that was built upon the fundamentals, principles and strategies created by Tarek and Christina El Moussa. Now, Tarek and Christine are flipping geniuses!”
And at the twice-a-year Success Path Investors’ Summit in Las Vegas, the El Moussas appear, speak and even pose for pictures with seminar-goers.
This is also where people at the seminar are introduced to representatives from Return On Rentals.
10 people who bought Niagara Falls properties from Return On Rentals told us this is where their real estate transaction took place, at the Vegas gathering.
How is it Return On Rentals is at these Success Path events. An attorney for Success Path described Return On Rentals as a vendor. Another attorney, representing Return On Rentals acknowledges the business relationship telling 2 On-Your-Side that the Vegas gatherings are one place the business markets its real estate offerings.
Do the El Moussas make money from the Return On Rentals deals consummated in Vegas?
You wouldn’t think so talking to Roger Behle, the El Moussas’ attorney. In an email, he says, “My clients have no association or business relationship with the company called Return on Rentals.”
But the El Moussas are business partners with Success Path. Last year, the Associated Press reported the company acknowledged it pays the El Moussas
From its seminars.
Neither Success Path nor Return On Rentals would talk about the details of their business relationship. But, if money were changing hands between the companies, seeming some of the money taken in by Success Path would go to the El Moussas.
Is that the case?
We asked Robert Gemmill, attorney for Success Path whether the El Moussas got paid for deals done by Return On rentals at the Success Path Vegas events.
His answer: “I have no idea to be honest.”
2 On-Your-Side is staying with this story and we will bring you updates as soon as we have them.