| Local Real Estate Scam Continues Unabated |
Loveland - June 20, 2011
Martin Lee Hutcheson, who goes by Marty, has been successfully operating what appears to be a lease with option to purchase
real estate scam in Loveland for years. He operates his real estate business with the assistance of a local real estate agent and
cooperative landlords apparently anxious to make a quick buck from unsophisticated tenants. His business associates in a recent
transaction include one local property and business owner along with a real estate broker.
Hutcheson has a long history of trouble with the law. Prior to 1999 he operated Rains Motor Company in Estes Park. In 2002 he
was sentenced to 6 years in jail by a Weld County Judge for embezzling funds from his former employer. He apparently purchased
cars at auction with embezzled cash and later pocketed the money when he sold the cars. According to a 2002 article in the
Greeley Tribune, “Hutcheson was prosecuted for only six illegal car sales, though the Weld District Attorney's office had information
alleging 91 illegal sales and a loss of up to $1 million.” At the time Hutcheson co-owned Drive-In Auto Sales of Windsor and
according to the investigators sold the cars through his Windsor dealership while depositing checks written to Drive-In into his
personal account.
When Hutcheson was arrested for the car sales scam in Greeley he was still serving parole for a 1996 felony conviction in Larimer
County for “Obtaining a Controlled Substance by fraud and Deceit.” His parole and plea to this lesser charge was the result
of a 1996 arrest on accusations he sold an undercover Ft. Collins Police officer cocaine on Lemay Ave. in Ft. Collins on 3 separate
occasions in late 1995. Prior to that Hutcheson pleaded guilty to felony theft of a Ft. Collins “Rent-A-Wreck” franchise thus
racking-up 3 felonies before his arrest and incarceration in 2002.
Ironically, Hutcheson’s problems while on probation in Larimer County in the early 1990’s stemmed in part from probation
supervision on yet another unrelated out-of-state criminal charge and for testing positive for drug use – a violation of his probation.
Defense attorney Kirk Brush, who would later become head of the Republican Party in Larimer County, pleaded with the judge to
release him from representing Hutcheson in 1991 after being assigned by the court as Hutcheson’s government provided defense
attorney.
Now A Real Estate 'Professional'
Banned from the used car business, Hutcheson now operates with apparent immunity from local or state authorities while managing
rental real estate while also selling “options” to buy those same properties throughout Northern Colorado using his
HomesbyShepherd.com website. (June 21, 3:30 update - Hutcheson's website was changed 3 hours after this story was
published -- as of this time all the properties listed have been removed)
In an email exchange with Hutcheson last week LovelandPolitics inquired how he manages and sells real estate without a broker’s
license. Hutcheson’s reply stated, “The Colorado Real Estate Commission told us years ago that IF we were only
representing our clients (people who bought investment property through us) we did not need a real estate license to
manage that property.”
According to Hutcheson’s website Homes By Shepherd;
“Shepherd Home Services, LLC believes in partnering with potential home owners and tenant-buyers. We offer homes
through Larimer, Weld, and Boulder counties on a "Lease with Purchase Option" basis. This means that those who
would normally be renting year after year, throwing money away paying for someone else's home, can become part of a
program that will lead to personal home ownership and an improved financial future.”
Young Loveland Family Left Without Housing
Marty’s latest victims in Loveland include the Peppler family who invested thousands of dollars into a property they believed they
were buying due to promises they claim Marty made to them while showing the house and negotiating their contract. After paying
$2,500 upfront in 2009 along with an elevated rent of $1,550 monthly for the past 23 months for an older 3 bedroom house they
discovered niether Marty nor the company he represented owned the property.
Similar to an incident reported by LovelandPolitics back in 2009, the Pepplers discovered after moving into the Marty Hutcheson
“lease with option to purchase” property that Hutcheson didn’t really own the property. They didn’t meet the real owners, Richard
and Barbara Strick, until after Hutcheson collected their deposit, rent and they signed a 2 year lease commitment on an agreement
that is apparently now worthless. Only the owners of the property have the ability to encumber the title with lease agreements or
options to sell it in the future.
The “Landlord” in the Peppler's lease agreement is not defined as the owner of the property or even the owner’s representative.
Instead, “Landlord” is simply listed as Hazel Court LLC which according to Larimer County records does not own the property.
Nonetheless, the Peppler’s real landlords appear to be following a familiar pattern as other business associates of Hutcheson,
enforcing the agreement when it is to their benefit but denying knowledge or authorization of the terms when it is not.
In the 2009 Loveland case, the tenants put significant “sweat equity” into improving a property located at 1662 Saulsbury in
Loveland. Months after making significant investments in the property, Hutcheson appeared according to the tenants telling them
the real owner needed to sell the property immediately due to credit problems. Believing the lease agreement granting them 2-
years to reside in the property before buying it was valid the tenants/buyers fought the eviction notice in court.
According to those victims, Larimer County Judge Blair refused to enforce the lease agreement’s 2-year term. The Judge’s logic is
easy to understand, Marty Hutscheson didn’t own the property. The real owner never signed the legal agreement therefore the
property was not encumbered in anyway by the lease agreement with an option to buy. The real owner wanted the tenants out and
they had to abide or risk being charged with an unlawful detainer.
A nightmare for the tenants, this fact is likely the an important selling point Hutcheson uses to recruit more landlords thus properties
into his program. Besides collecting a large “non-refundable” deposit that is likely shared with Hutcheson, the real property owner
believes he or she doesn’t need to obey Colorado Landlord/Tenant laws by maintaining the property. As in the Peppler’s situation,
a leaky roof or mold becomes the “buyer’s” obligation to fix since the tenants are now treated as buyers at least long enough to get
them to cover those expenses. If the real owner wants to evict the tenants later for any reason or not return their deposit, he can
do that as well since the lease is unenforceable.
(“Lease with Option to Purchase” agreement for 1316 Hazel Ct.)
Ft. Collins real estate broker Clayton Roberts signed the lease for Strick’s property located at 1316 Hazel Ct. in Loveland
according to the Pepplers. Also, according to the tenants, Roberts only appeared in the last minute to provide his signature. Marty
Hutcheson was the point of contact for finding the "buyers," showing them around the property, negotiating their contract and taking
their money. Roberts has not responded to several inquiries about the matter.
History of 1316 Hazel Court in Loveland
According to county records, Richard and Barbara Strick bought a the 2,000 square foot, 3 bedroom home built in 1966 located at
1316 Hazel Court from US Bank for $201,000 after the property foreclosed in early 2007. Hutcheson moved a “buyer” into the
property on a 2 year lease agreement that same year. Not surprisingly, the family vacated after 2 years presumably losing their
deposit and ‘sweat equity’ invested in repairing and updating the Strick's property.
Hutcheson maintains that he isn't performing property management without a license yet Larimer County Court records indicate he
filed some 7 "unlawful detainer" notices with the court on various tenants in multiple properties. This also indicates that maybe
eviction and not home ownership is the consequence for many people who decide to do business with Hutcheson in hopes of
becoming homeowners.
In June of 2009 the Pepplers signed a two-year “Lease Agreement with Option To Purchase” for the same property (agreement
linked above.) Like other victims we interviewed, the Pepplers also say Hutcheson promised to assist with repairing their credit and
helping them in purchase the property. Previous financial troubles made home ownership through conventional methods unlikely for
the Pepplers so this sounded like a great opportunity. According to their lease agreement, the Pepplers would be able to purchase
the property for just under $270,000 if everything went according to plan and Hutcheson helped restore their credit.
Curiously, the lease agreement states, “Resident is required to improve the property as a condition of this Lease.” In other
words, the owner should expect to see the property value appreciate as the “buyer” adds to its value through various improvements
to the property. In addition, the “Landlord” reserves the right to increase the rent, “Landlord may increase or decrease the
monthly rental for future months...” While it may seem incredulous anyone would sign such agreements, tenants interviewed by
LovelandPolitics claim they were unaware of the odious terms of the contract up until the moment they were being asked to sign-it
so they could move into their homes.
While some houses did indeed transfer ownership under these terms, many other tenants are unable to purchase the property after
two years and find themselves without a home or their meager life savings. In the case of 1316 Hazel Court, purchasing a right to
buy the property the County Assessor values at $189,000 for $270,00 is hardly a privilege in today’s market. Below are two
important facts that are not likely explained to the renters at the time they sign these lease agreements;
1. When a house purchase contract price is 15% to 20% above the appraised value financing is difficult unless the
buyer can raise the difference in cash. In other words, the bank will only finance the appraised value of the property less
the buyer’s down payment so cash strapped buyer’s are unlikely to qualify.
2. If the property appreciates to or above the inflated agreed upon purchase price during the lease term, the owner is
not obliged to honor the agreement and can either keep the property or sell it to someone else at a higher price if the
owner is not a party to the “Lease Agreement With Option To Purchase.”
Like Hutcheson’s previous Loveland “Lease with Option To Purchase” property, the relationship between the actual owners and
Hutcheson is a tangled mess. The Pepplers have been told by Richard Strick that he quit claim deeded the Hazel Ct. property to
his wife Barbara (County records do not reflect such a change). Barbara Strick is said to have angrily confronted the tenants later
providing them a “3 day notice to quit” demanding they leave the property. Hutcheson is now out of the picture and Richard Strick
is said to have informed the tenants he never received their deposit thus suggesting Marty Hutcheson absconded with the funds.
Strick and Hutcheson did have a falling out that is now the subject of ongoing litigation.
In the meantime, one more Loveland family is losing both their savings and their home while Marty Hutcheson actively seeks new
opportunities in the local real estate game.
| Below is an email LovelandPolitics received from Marty Hutheson after inviting him to present his side of the story. RE: Shepherd Online Contact Form From: Marty Hutcheson <martyhutcheson@comcast.net> Hide Add to: To Do, Calendar To: guchwale <guchwale@aol.com> Date:Mon, Jun 13, 2011 9:36 am I will address these few questions but would still like to talk to you so we can make sure everyone is on the same page. With the way real estate is right now we are not pursuing any more properties for our program at the moment, so it might be a mood point, but would still like to have my side of the story represented. 1. The Colorado Real Estate Commission told us years ago that IF we were only representing our clients (people who bought investment property through us) we did not need a real estate license to manage that property. But IF we were to run a full “Property Management” operation we would need to do that under a Managing Brokers license 2. The advisement from the attorney who wrote our contract (same attorney that writes all the Colorado Real Estate Commissions contract) was to open a LLC for each property. I leave that up to the owner of the property. It seems that everybody has a different opinion on that and I let the owner of the property take care of that through their CPA or Legal Council. They all have different opinions of how that should look. But yes our tenants are fully aware that the payments are being made to a LLC. The only exception would be when a “owners” CPA or legal council says they don’t need or want to do it through LLC, then the payments are made directly to the owner. Our contract is approved through HUD so many times our tenants can do a FHA loan just using the Lease Option contract. As I said I leave that 100% to the owner of the property. We have a tracking system that allows us to help the tenant create a mortgage history to help them secure permanent financing ASAP. 3. I would like to have my comments in the story but would like to talk to you before. You have formed an opinion on one deal that didn’t go the way it should have. We addressed the issue and took care of it MORE than we needed to. Poudre Investments refunded the customer as did the LLC. The tenant had not been honest on their application and actually did an exact same deal with a different company upon us paying ALL of their moving costs to their new location. It would be nice if you could see ALL of our deals and see the people who have been honest with us and we have been able to help. Appreciate the opportunity you have presented Marty |
| Email Sent To Marty Hutcheson's Webpage after several missed phone calls and email exchanges: From: guchwale@aol.com Sent: Thursday, June 09, 2011 5:15 PM To: martyhutcheson@comcast.net Subject: Re: Shepherd Online Contact Form 1. Dear Martin Lee Hutcheson: I have tried to call today a couple times and just got voicemail. I was out all last week so that is why I didn't call you earlier. Here are a few questions I was hoping you could answer - 1. How can you represent and lease property owned by others without a valid real estate brokers license? 2. I noticed you continue facilitating leases with people that are not in the name of the property owner but instead an LLC is named as the "landlord." – do the tenants know the property owner isn’t signing their leases? 3. Is there a paragraph or comment you want me to include in the story in general? – please send it and I will include your side of the story. Thanks |
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