Fraud in Real Estate, Are You Being Victimized? - Part II
The phone range and Peter was on the other end of the line. "Willard, I have a friend of mine that has a real estate problem." I said, "Send him over." Two hours later, Jerry sat in front of me terribly upset. Three years earlier, he had been talked into buying a 4 unit building in partnership with Smooth Talker, a knowledgeable, smooth talking real estate salesman. Smooth Talker offered to find the property, arrange the financing, manage the building and even put up the down payment. Jerry was told that all he had to do was use his perfect credit to qualify for the loan and then sit back, wait seven years and the money would come rolling in.
Smooth Talker also promised that the two of them would do more deals and Jerry would make over $100,000. What Jerry did not know and he would not figure out until 3 years later was that Smooth Talker had no intention of splitting anything and Jerry could kiss his perfect credit goodbye. 3 years ago, Smooth Talker had Jerry and two other buyers, buy three buildings, located on one street. The buildings cost $150,000 each. Smooth Talker put up $1,500 down payment for each property, while at the same time, telling the buyers that he was putting in $12,000.00 for each. There was an unexplained difference of $10,500 each.
Smooth Talker also collected a $9,000 Real Estate commission on each. Smooth Talker also agreed to take the building in as-is condition, with no inspections and without requiring the seller to make any repairs. There were, unknown to Jerry $10,000 worth of air-conditioning as well as other work. Smooth Talker had those other two buyers borrow from the Federal Government a remodeling loan of $48,000 to make the needed repairs. When those other two buyers each got their loans, Smooth Talker took all the money and said he spent it on Jerry's building. Let me clarify that. Smooth Talker stole the money from the other two investors, telling them he used it on Jerry's building. That is still stealing. My research later showed that he did almost no repairs to any of the buildings, and what little repairs he did have done, were not even paid for.
Smooth Talker cheated the poor workers out of their pay. No one could ever understand what he was doing. He even collected rent, pocketing any cash. When the buyers wanted an accounting. Smooth Talker wouldn't even supply it. When I came on the scene and demanded, as a matter of law, an accounting of what was received and spent. Smooth Talker didn't have any proof of what happen to all the money.
Jerry wanted out of the partnership but Smooth Talker didn't want the building sold; but he did want to make sure he got his due, if it was. He gave me a statement showing that he had put in $34,000 (which was not true) into the building and wanted that before any split of profits. This would of left Jerry receiving $5,000 and Smooth Talker making $46,400 on the whole deal.
To avoid being in this kind of a situation, I advice the following, before doing any sort of real estate deal; a) Evaluate your risk. What is your downside? Have a real estate expert study the deal. b) Set up operating and reporting guidelines with your partners. Put everything in clear English. c) Have everything reviewed by an attorney or an accountant. d) Choose your people partners with care.
About The Author
Willard Michlin is an Investor, Business Broker, California Real Estate Broker, Accountant, Financial Distress Consultant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net
See other article by Willard at http://www.kismetgroup.com
Related Articles:
Tips For Picking The Right Golf Cart Batteries
The batteries for your golf cart are something you should consider carefully ? remember that you will want your golf cart to last for the duration of the course, which could be quite a long walk. You do not want the batteries to run out before you have finished 18 holes, so you must make the choice carefully. The batteries for your golf cart are essentially the juice that keeps it moving, just like fuel for a car, and it is an important purchase if you want to enjoy your game.
Golf Accessories For Vacation
There are literally millions of golfers per year that plan a golf vacation. Whether they go to the exclusive, luxurious ?The Wayaya Club? in the middle of the Fiji islands, or the Greenbrier Golf Academy in West Virginia or some golfing R&R in the Hamptons on Long Island, the vacation aura and atmosphere permits the individual to relax despite the competitive intensity of golf. It is advisable for vacationers to seriously consider golfing destinations such as Arizona, Hawaii, Las Vegas or even Michigan for desirable golfing and enjoyment.
Celebrity High Rise Agent Sets Three Las Vegas Price Records as Hollywood's Elite Flock to The Harmon Residences
Las Vegas luxury real estate market continues to show strength as evidenced by celebrity high rise agent setting three new price-per-square-foot records for residential homes and residential high rise condos.
Outdoor Lighting Franchise, NiteLites of Fort Myers / Naples, FL Set to Dazzle Florida’s Big Boy Tech and Toy Expo August 12 & 13, at the Ha
Landscape and Architectural Lighting Business, NiteLites of Southwest Florida Franchise, to Exhibit at Florida’s Big Boy Tech and Toy Expo August 12 & 13, at the Harborside Event Center, Ft. Myers.
Florida Based Company Makes a Splash in the Auto Industry
AskPatty.com, Inc. certifies 18 Florida-based dealerships as Female Friendly
In Pursuit of the Best California Attorneys
One of the most important considerations when seeking for the help of a legal authority is to make sure that they are competent and knowledgeable about their craft. Finding attorneys in California can be very easy. Here are some simple guidelines on how you can find California attorneys.
Buying a Newly-Built Home? Ten Benefits of Using a Real Estate Professional
It might not seem necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. However, by using a real estate professional, you have someone to protect your interests and guide you along the right path.
A Little Golf In Philadelphia
If you happened to be a regular member of one of its most exclusive main line private clubs, then Philadelphia was everything it was meant to be in the fraternity know as G-O-L-F. For unattached, unaffiliated players, the venues were generally mere after thoughts in most cases. However, the many dozens of top-daily-fee golf courses have debuted on Philadelphia?s outskirts since the late 1990?s. A handful of the finest and kindest newcomers around the nations? fifth largest city come to hear and see the excitement of a town for public golfers. If you can learn how to be a champion or a prized golf player in Philadelphia, you can learn how to play golf like an expert anywhere.
Finding a good Real Estate Attorney
Any real estate course or seminar is not a substitute for a good attorney. Finding a high-quality real estate attorney might be quite difficult, since most attorneys are not themselves investors or very familiar with new creative transactions. Most attorneys would give you just necessary advice to keep them from getting sued up, but do not give enough advice for you to make more money out of any real estate deal.
The Golf Channel Reality Show, Road Trip: Myrtle Beach, Inspires New Pawleys Plantation Golf Package
The "Road Trip" Golf Package Features Golf Courses Spotlighted In Show's First Four Episodes