The Queen of Mobile Homes: The Chimene Van Gundy Story

In this week’s episode of The Dark Side of Finance, CEO and co-founder of PAX Financial Group, Darryl Lyons, tells the astonishing story of Chimene Van Gundy, a woman who rose from extreme poverty and foster care to amass a multi-million-dollar fortune flipping mobile homes. However, her success story takes a dark turn as she becomes embroiled in a financial scandal that left hundreds of investors in financial ruin.

Key show highlights include:

The incredible rags-to-riches story of Chimene Van Gundy, who built a $2 million fortune flipping mobile homes.
An exploration of the lucrative but ethically murky mobile home industry and the financial strategies Chimene used to grow her empire.
The unraveling of her scheme, leading to an $18.5 million fraud case that devastated 600 investors across the country.
Insights into how deceptive practices and misrepresentations tricked investors into believing in a secure and profitable venture.
Tips on how to avoid falling prey to high-return investment scams that target everyday people.

Tune into this week’s episode to uncover the dramatic rise and fall of Chimene Van Gundy and gain the knowledge necessary to protect your financial future. Keep your head on a swivel, and let’s navigate this dark side together. If you enjoyed the episode, share it with a family member or a friend!

Transcript:

Hey, this is Darryl Lyons, CEO and Co-founder of Pax Financial Group, and you’re listening to The Dark Side of Finance. This information is general in nature only. It’s not intended to provide specific investment, tax or legal advice. Visit paxfinancialgroup.com for more information. I’ve got a rags to riches story for you today.

So, Chimene Van Gundy, she was born in Des Moines, Des Moines, Iowa. And actually, I’ve been there, it’s beautiful. If you haven’t been there, it’s, it’s, it’s like one of the up and coming places in the country. A lot of people are migrating from California to Des Moines. She was fifth of seven kids.

And they were, they were poor. So poor that the parents couldn’t take care of them and the kids were forced into a foster care system. The original parents were kind of a church cultish kind of family.

She was trafficked at 17, finally was able to escape the whole system, I guess, right at 18, maybe because that’s when you foster out. And she was able to get on with her life, but as you can imagine, the trauma- she got married, divorced.

But Chimene had grit. She was able to go to, to a college in Georgia and get an associate’s degree, paralegal work, and ended up actually going to University of Texas, San Antonio, moved to Texas and getting a degree in criminal justice from UTSA, University of Texas, San Antonio. Got remarried, ended up having five kids. Now, tried the corporate gig, but got laid off in 2015.

So again, a woman with grit, read a book that changed her life. Robert Kiyosaki’s Rich Dad, Poor Dad. And at 37 years old, she was blown away. She heard that he did conferences, so she went to one of his conferences, and it was a much deeper dive into real estate. Her enthusiasm accelerated.

They offer at these conferences, if you’ve ever been to them, some, extended, more deep dives into the tools, the resources and coaching and mentoring, and this Kiyosaki conference was no different. So, Chimene signed up for a coaching strategy mentoring class, a course, but it was $20,000. Now their family didn’t have $20,000, so she sold her grandmother’s jewelry and heirlooms, and her husband scrapped together $3,000, and she went through a Robert Kiyosaki Rich Dad Education Program.

So going through that program, she became passionate about real estate. Now someone reached out to her and asked her, “Hey, Chimene, can you help me? I have a title issue on my mobile home.” She said, “Yeah, I’ll help you with that.” And she started to think a little bit about these mobile homes. These could actually be good investments.

She learned that somebody wanted to get rid of a mobile home, and just wanted somebody to move it off the lot, just get, I just want to get rid of it. I don’t, I don’t even need to sell it. So, she took the mobile home, cleaned it up a little bit and sold it for a thousand bucks. And she goes, “Huh. This is a good business.”

And 18 months later, by buying mobile homes and flipping them, she went from a -$50,000 net worth to being worth over $2 million. Flipping trailers. You don’t want it, I’ll take it. I’ll fix it up and I’ll sell it for a couple grand. Her husband, who was a nurse, quit, stayed home with the kids.

Now to take this strategy one step further, because there’s only so much Chimene can do by herself, she thought, you know, okay, here’s, here’s the challenge. I have this home that I’m refurbishing, and I want to sell, but some of these people, they don’t have the money. So, I could be the bank. So, then she was the bank. She would lend them money, and then she’d receive interest payments and use the mobile homes as collateral. It was a fairly reasonable strategy.

And so, she was making money on the flip, and she was making money on the financing. And really, nobody wanted to do this in the marketplace. And she considered a niche, what, what she considered, she considered this to be the last frontier of affordable housing in the United States. KB Homes were too expensive, homes in the city were too expensive, apartments were too expensive, but people could still pay for mobile homes.

And her strategy earned her recognition as Woman of the Year, Mentor of the Year for the Power Organization, which recognizes women in excellence, International Association of Top Professionals. She was at an award gala at the Plaza Hotel in New York City, magazine covers, YouTubes, podcasts, so you can see all these YouTubes, you can, you can see her everywhere.

She created five companies- banking, flipping, investing, marketing, consulting. The main company was called Outstanding Real Estate Solutions, and that had about three employees. She was killing it. Loves her children, loves animals, been spending time at the ranch. She actually lived in New Braunfels, Texas. Altogether, she flipped over, flipped over 780 homes in the country.

Now, keep in mind, I think it’s important to know, I mean, it’s tangential, but mobile homes do have a variety of designs and builds, in fact, the vernacular can be different. Prior to 1976, they called them mobile homes, and for some reason, after 1976, they changed it to manufactured homes. And of course, you can get singlewides and doublewides.

For those that don’t know me, I actually, in high school, lived in a mobile home. Our family moved to a little mobile home park, trailer park on the side of Highway 90 in Castroville, Texas, and wasn’t, I wasn’t unfamiliar with mobile homes. So, when I read about Chimene’s story, I thought this is interesting because in college, during the summers, my dad actually, my- let me say it this way.

My dad sold mobile homes for a while. And so, during college time, to earn a few bucks, I would work the mobile home lot. And basically, my job was to clean it up. And I was young and had a good back. So, I would move furniture from one mobile home to another if a mobile home got sold or, a refrigerator or, and sometimes I’d actually have to, not a lot, but, clean up mobile homes that got repoed, which, you know, that could be kind of dirty.

Learned about the skirting and strapping them down and, so, you know, pretty familiar with the mobile home industry. In fact, it’s, it’s interesting that even Warren Buffett in the 80s, he actually had investments, not in the mobile homes themselves, but in the financing of mobile homes.

Actually, if I think about it, I think he actually might have had an indirect ownership in a mobile home manufacturer in the 80s. And so, there’s generally good margin in it, but it’s, it’s not for the faint of heart. Oftentimes you’re charging above-average interest rates to people with lower quality credit and you get into this gray area of ethics.

And so, for that reason, my dad’s not in that business anymore. But, if for those that, for those that it works, it’s, it can be lucrative. It, but it’s, but it is a challenging one because oftentimes you’re having to make a decision on whether or not you sell an expensive insurance product or a high-interest rate loan to somebody who’s just scraped, scraping by.

That’s where it becomes very challenging. But Chimene, she did it. And she was selling. In fact, she was selling mobile homes to doctors, attorneys. They didn’t want complexity in life, they just wanted to keep it simple. They wanted to, just maybe, give me a plot of land out in the country, and I’ll put a nice doublewide on it, and these are manufactured houses, some of them are very nice.

Now, some people actually were retirees that wanted to live in mobile homes, like in a retirement community where somebody could come in and mow their lawn. It was affordable, you know, with inflation where it’s at today, wages remaining flat, these mobile homes were still, like, within reason, and especially in the retirement community, too.

So, to a certain degree, they were recession-proof. And the lending part of it was very attractive too, because you’re collecting these interest payments. But Chimene, you know, had limited capital. I mean, good amount of capital. She was making money. I just told you her net worth was $2 million. But she started to recognize I can really scale this thing out.

So, she started gathering other investors to be able to buy mobile homes and participate in it, so they would get a, an interest rate on- they would get a cut of the interest rates, and they would get to participate in the flipping. So, she was certainly, gathering people around the country and, and sharing the story and the strategy because people were overlooking mobile homes.

And then she started to get investors to, to do this thing with her. And so, she ended up raising $18.5 million from 600 investors around the country, selling, buying and flipping these mobile homes and receiving, they were receiving about an average rate of return of between 15 and 20%. So very, very attractive business. I mean, it makes sense, you know, with inflation and affordable housing and, and the economics makes sense and, and the rate of return makes sense.

And hey, you know, if they default you, you take these mobile homes back and okay, that all makes sense. So, people were really excited about working with her and her story. Like, also her story. Foster care system, overcome a lot in life. But then, one of her investors out of state became a little suspicious.

And he pressed for more information.

And then investors’ payments.

We’re not transferring the dividend payments they were expecting, we’re not transferring to the bank account. This was June through July of 2021. Chimene and her team sent formal letters out to all of their investors saying that there was a payment processing system and they’d been locked out of their bank accounts. But don’t worry. And her, her and I quote her, “Your investments are safe.”

And again, recession-proof.

That was when the scheme fell apart.

Chimene did not own all the mobile homes she claimed to have owned.

In 2023, the SEC, the Securities Exchange Commission, now, they take a little, and take a little, detour real quick. She went outside of the Securities Exchange Commission oversight. So, when you think of PAX financial Group, our company, we are subject to the Securities Exchange Commission oversight. So, if somebody were to invest in some type of investment strategy, and we have before offered real estate strategies and they’re often defined by real estate investment trust, it’s a formal, formal strategy.

There’s extra paperwork that somebody has to sign. It’s kind of frustrating, we get frustrated, but it’s because the Securities Exchange Commission is trying to protect the consumer. So, we fall under this Securities Exchange Commission so everything that we do is subject to the Securities Exchange Commission’s process, procedures, oversights, audits, fines, regulations, suspensions, all those things. Chimene was outside of the Securities Exchange Commission.

So, she was doing private investor, which is very possible to do. But she was not subject to any of these regulations. But she was developing the framework, the literature, the collateral material. She was developing all that. So, it mimicked what you might see in a legitimate investment advisory platform. So, all the language you would receive, all the disclosures that you would receive would look very, very much like what you would see at a legitimate investment institution.

But the Securities Exchange Commission in May, 2023 charged Chimene for violating registration and the anti-fraud provisions of the federal securities laws. And the complaint alleges that this happened between 2018 and 2021, and it included three of her salespeople: Santos, Maria, Michael. There was, the SEC contends that there was material misrepresentations and omissions in offering documents, advertisements and other solicitations.

Let me tell you about the misrepresentation, and you can see her YouTube videos. She claims to have flipped over 400 mobile homes. And 248, so it wasn’t 400, 248 mobile homes were connected to the organization, but when you took inventory, there was only six they actually owned. Only six out of the 400 that she claimed. Why were 248 connected to her?

Because she would identify the identification numbers of mobile homes that other people owned and made a claim that she owned them, and that she had attached liens to those, and they had nothing to do with her. She told everyone she owned over 400. She flipped over 700, she owned 400, yet they only owned six.

And by the way, they owned six, they had no liens against anything. None. And many of the investors that she had were considered unsophisticated. They had never done these types of investments before. Her salespeople had made over $1 million in commissions. And several of them had told the investors to take out home equity loans to invest in this scheme.

Now, the county judge appointed a receiver to take control of the company.

And the company is ultimately going to file bankruptcy because there’s nothing there. So, in this process, Chimene has to go to court and kind of explain herself and have the attorneys say, where’s the money? Where, where can we find the money to help make some of our investors whole? And she wouldn’t show up to the court hearings.

The attorney, Michael Morris, said that she’s had some seizures. And her doctors won’t let her go to the court.

The salespeople are also involved with this. One had actually found a way to pay back a little of the money, and the other two were playing some legal games with the SEC and trying to fight the charges.

The company is completely insolvent, that she started, completely insolvent. Nothing’s there.

Chimene filed for Chapter 7, and again won’t show up to the meetings. And even though there’s some of the meetings are by telephone.

The claim is, is that she suffered a brain injury last year by falling and hitting her head on the table at home and it’s caused memory problems. People want to know, where’s my money? And her answer, “I don’t remember. I’ve suffered seizures.”

She does get unemployment now. She even mentioned in one comment, “I’ll pay you back by selling my eggs to a fertility clinic.”

She still lives in New Braunfels. This is not completely wrapped up. But there’s nothing there. These investors have lost, some of them, their life savings. She claimed to be the queen of mobile homes. And you can see her YouTube videos. Very, very impressive lady, the way she communicates.

In my research, I stumbled upon a comment. You know, you look at the, you know, watch YouTube videos or find articles and a comment said she changed her last name and has another business now in New Braunfels.

I don’t know if I believe anything anymore. The foster story, the divorces. For somebody to do what they, this person has done, Chimene, what she did is unbelievable. And to know that people out there have the audacity to lie like this and to take people’s money and set up this entire scheme. And as I think about it, it’s really easy for all of us to find somebody who has so much charisma and then, and then articulates an investment strategy that your gut says, “That makes sense,” and then become endeared to their story.

It’s hard to discern.

It’s hard to understand if this is legitimate. This is a tricky one. But this did, this did fall outside of the Securities Exchange Commission. And as a result, I think that’s where us and his investors have to do our due diligence. And we might have done a due diligence by saying, “Well, I want to see the identification of these mobile homes.”

And she would have been able to provide that. So that would have been a little tricky. But I think the Securities Exchange Commission one would have been an important one. And of course, if anybody invested in something like this being very careful about the amount of home equity loans, but she went out, she went to people, a lot of people weren’t sophisticated investors, and they were, they were being offered returns that, frankly, they couldn’t get anywhere else.

So, this one’s tough. And I feel bad for the investors, as usual. But we’ve got to keep our head on a swivel, as I said before. Because these people are out here and they’re targeting our friends, our family, our community, and our loved ones. Thank you for listening and have a great day.