Indy BBB just rejected our entire industry!!! - Posted by js-Indianapolis

Posted by JT-IN on October 14, 2003 at 21:29:09:

The gals are simply wired a bit different than us guys… (the weaker sex). Good thing, as I can’t imagine being on that same wave length ALL the time… Thank GOD for the Ladies bringing us beasts out of the woods once in a while…

Enjoyed the story; thanks.

JT

Indy BBB just rejected our entire industry!!! - Posted by js-Indianapolis

Posted by js-Indianapolis on October 13, 2003 at 16:37:43:

I?ll just let the conversation brew here first, before I go spouting off about my feelings on this. This was in the Indianapolis BBB?s ?FOCUS ON BETTER BUSINESS? flyer this month.

Begin Quote

We “Buy” (?) Homes

We’ve seen the signs everywhere. “We Buy Homes” or “We Buy Houses.”

Have you ever wondered what those were about? Well the Bureau did, so

we did some investigating. After some checking, it’s the Bureau’s

opinion that many of these companies do not “buy” homes.

Most people expect when a buyer “buys” their home, they will receive the

money to pay off their mortgage at the time the buyer takes possession.

We found that many of the “We Buy Homes” companies (in fact all of the

ones that willingly provided the information we requested) do not do

this. Instead, the mortgage stays in the seller’s name, and the buyer

takes over the mortgage payments. What does this mean? It means that

the seller still has an outstanding mortgage in his/her name, and, if

the buyer is late making payments or the house goes into foreclosure,

it’s the seller’s name and credit that is dragged through the mud.

Once papers are signed to sell the home, the seller signs the title over

to a real-estate management company (another name the buyer does

business as). The buyer then rents the home out, usually to people with

poor credit. This is supposed to give the renters the opportunity to

build up their credit so that within a few years they qualify for a

mortgage. The renters would then buy the home from the “We Buy Homes”

company, which would then turn around and give the original seller the

rest of the money owed on the home. Everyone wins, right? Well, it’s a

little more complicated than that. Since the mortgage is still in the

original seller’s name, and the managing company’s rights are all

derived from a power of attorney rather than ownership, questions are

raised as to the original seller’s liability in the case that the

renters trash the home or worse, if the tenants are injured on the

property. Confusing? You bet!

There are other types of these companies that buy homes for cash to

rehabilitate, and these are usually a clear cut sale. However, the

primary market seems to be the one mentioned in the description above.

So, what has the BBB done with this information? For the first time in

the Central Indiana Better Business Bureau’s history, we revoked an

entire industry. We did it on the basis of misleading advertising

because it is our opinion that these companies are not “buying” homes as

their signs say. Just another example of the BB working to not only

education consumers, but protect the reputation of our members.

End Quote

Re: Indy BBB just rejected our entire industry!!! - Posted by john

Posted by john on October 15, 2003 at 20:54:54:

Did itums fewings get hurded by bad BBB? It appears as though the American entrepreneurs spine has withered to room temperature jello pudding. It?s good that men started this country oh so many years ago. The modern American woman (87% of modern America) would have a facial and manicure every time an ?icky? word was uttered in a business meeting. Just follow the heard and let us predators hunt freedom and profits.

Leaders lead. They don?t want to lead. Its just who they are.

Re: Indy BBB just rejected our entire industry!!! - Posted by Scott T.

Posted by Scott T. on October 14, 2003 at 16:39:30:

OK Vaughn family…what gives…you have deleted 3 posts today. I thought this was an open forum…I did not use any bad language, ect…and would like to see if anyone out there happens to agree with me and the Indy BBB. It would not hurt the CRE online people to hear another objective opinion…for petes sake, it seems most of these people will agree with you anyway…but why not be objective and see what others out there may think???

Thanks,

Scott T.

Excellent summary - Posted by Jack

Posted by Jack on October 14, 2003 at 11:32:49:

Despite what your may fell about the BBB (I don’t really care what the BBB says about anything), their summary of the ‘we buy houses, subject to’ business was excellent.

THE FOX WATCHING THE HENHOUSE… - Posted by William Bronchick

Posted by William Bronchick on October 14, 2003 at 08:51:41:

From all these comments, it seems like people have MORE COMPLAINTS about the BBB than any of the companies the BBB are supposedly keeping tabs on!

Subject To IS a Scam - Posted by FrankLee

Posted by FrankLee on October 14, 2003 at 05:54:52:

What’s the problem? You know it, I know, we all know it. Duping a homeowner into signing over their deed while remaining on the mortgage is a stroke of genius. So is a Ponzi scheme. I’d welcome one, just one con man, er, “investor” to say with a straight face that they have the best interests of the homeowner in mind. Heck, that they have ANY interests of the homeowner in mind.
Please, guys, get off your high horses and accept yourselves for what you are: used car salesmen dealing in a different commodity.

MORE INFO-and random thoughts/venting - Posted by js-Indianapolis

Posted by js-Indianapolis on October 14, 2003 at 02:50:59:

A few months back, the BBB asked everyone who was part of the “We Buy Houses” crowd to submit all the contracts they use in their business. Now, the investors I know promptly told them to go take a flying leap through a rolling donut…or something to that effect. However, it’s obvious, someone did. And chances are it was some new investors, trying to play nice with a not so nice company, the BBB.

Someone I know, a longtime member of the BBB, wrote a very detailed letter explaining how a sub to transaction works. How she has sellers hug her for buying their home. How without her, the sellers were hosed, and might have gone into FC. How Indiana has the highest FC rate in the country, and it would be higher without investors. How people can get achieve that “great American dream” of home ownership, even if their credit is less than perfect.

Their response? Show us your forms.

Her response? I don’t need to keep sending you my dues, if I’m going to get treated like that.

So, after that debacle, the local super keen investigative team from channel 6 gets to asking the question, “You ever see those ‘We Buy Houses’ signs on the sides of the road?” They proceed to hose the entire industry, and then to back up their claim, drag one idiot investor who botched two sub to deals. They didn’t mention that they tried to get some dirt on one of the investors from our local club, couldn’t, and didn’t show ANY positive view. Funny thing though. They focused on the signs, and the Sub to’s, and left the rehabbers alone.

Interesting, how the BBB report and the media jived. Wonder if Channel 6 is a BBB member? Or if the BBB advertises on Channel 6.

All this comes down to one thing. We have no organization fighting for us. Well, maybe more than one thing. Without some sort of ethics board, we’ve got no one to tell investors to quit littering towns with those ugly signs. I’ve been harping on that forever, saying it gives us ALL a bad image. And now, look at the results. No organization to get to bad investors before the media, and BBB, pounce all over them all. Should we? I?m undecided about that.

One more thing. I’m sure your circle of investors would never do immoral things. But let me tell you, this business has more immoral, unethical, half cocked idiots who try to make money come outta a hat than any industry in the world. Odd, when you can make 5 and 6 figure profits from nothing, legitimately, you have people who work twice as hard to do it illegally. Why? No need. Really, who in their right mind goes through all the hassle of setting up a sub to, and renting it for a while, only to let it go into default, and lose your back end profit. Flip it to a new investor who has more money than brains already!!! At least they can pay for it. Sheesh.

Sorry, I’m just venting now. Bottom line, people. Act professional, ADVERTISE professional, and never, never, never, take a bad deal, just to have a deal. How hard is that?

BOY !!! Such Guts; Such Stupidity: So unfair - Posted by NiceEthicalREInvestor

Posted by NiceEthicalREInvestor on October 13, 2003 at 22:12:20:

Oh boy !!! I think the BBB just set themsleves out to be f$&ked, big time.

If the Creative Real Estate Industry had an industry association, this would be a very nice lawsuit to sock to the BBB. I see so many issues should be resolved: antitrust issues, unfair trade practices (against the BBB), defamation (yes of an entire industry), restraint of trade issues, etcetera, etcetera etcetera.

This lawsuit would cost over $100,000, but I bet I can slap the BBB with a permanent injunction, and make them forever cease and desist from making such ignorant, unjustified, unfair,harmful, sweeping generalizations, hurting a whole industry, and thereby ACTUALLY costing people who are employed in this industry money (this is no joke).

Money damages may not be easily recoverable, but we will go for a couple hundred million dollars. That’ll make 'em sweat for sure.

But…

I reject the BBB… - Posted by William Bronchick

Posted by William Bronchick on October 13, 2003 at 21:30:35:

The BBB stands for the “BIGGEST BULLSH*T BUSINESS”.

Read the numerous complaints on
http://www.badbusinessbureau.com

In 1995, we became members of the BBB so we could advertise this on our “WE BUY HOUSES” postcards. A representative gladly took our money. They never interviewed nor checked out our business before taking the $350 fee.

Our membership had lapsed for a month because they failed to bill us for the renewal. Ironically, I was IN THEIR OFFICE THE WEEK BEFORE teaching a seminar and nobody had mentioned a word of it.

The BBB filed a complaint against my company with the Attorney General’s Consumer Fraud Division for advertising the fact that we were in fact members of the BBB. I called them up and said, “hey what the f*** did you do that for?” They said, “well technically you’re not a member - you are expired.” So, I quit, told them to go scr*w themselves.

Three years later, I re-applied under another business name and they accepted it, along with my money. No questionaire, no background checks on my business. Then, they took another $300 so I could put a logo on my website.

Renewal time came and I declined. I’ve decided not pay into their scam any more. I took the logo off my website.

They’ve got a point… - Posted by Brandon

Posted by Brandon on October 13, 2003 at 21:10:24:

But they just didn’t do a very good job of telling the whole story. I have always thought that the obsession of many in regards to sub2 is ridiculous. I’m sure it is an appropriate financing technique in some situations (because it isn’t an investing technique, but rather a way to finance a deal). But I find the whole lack of investor liability to be very unethical. With that said, it is irresponsible for the BBB to declare that every person who markets with a bandit sign is part of a scam. Marketing techniques aren’t the same thing as a scam…

Re: BBB ,who & what is that? (nt) - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on October 13, 2003 at 21:01:05:

$

I bet those beautiful we buy houses signs - Posted by Houserookie

Posted by Houserookie on October 13, 2003 at 20:48:19:

brought their attention to the industry. I saw this one coming months ago.

The next industry will be the we buy houses phone calls that claim they are “buying” houses so they can beat the do not call list.

Mark my word on that one.

Re: Indy BBB just rejected our entire industry!!! - Posted by Bryan-SactoCA

Posted by Bryan-SactoCA on October 13, 2003 at 20:32:24:

Well, they’re partially right. What they are describing is what we call a combination subject to/lease option deal. The investor buys subject to and then lease options it out. Like they say, the seller has all the liability in case something goes wrong. In fact the seminar gurus advertise this deal as easy to get out of and with no liability-for the investor. This means that when something goes wrong the “investor” who is really a seminar junkie working as an office assistant, who has poor credit themselves, simply disappears leaving the poor “seller” with a trashed house occupied by hillbillies who won’t leave, and with no way to force them out. I’ve heard of several companies who specialized in these sorts of schemes going bankrupt forcing the sellers into foreclosure. Selling directly to a rehabber should entail paying off the seller’s mortgage, after which the seller is released from liability unless the rehabber is doing the aforementioned scheme. What they didn’t address is wholesaling, where the wholesaler buys the house outright and then sells it outright to a rehabber who usually puts up cash for the sale, either his own or a HML’s. Since there is a full double closing, there is total release of liability for both original seller and wholesaler. I’ve always thought that sub2’s were stinko, and the liability issue is why.

Re: Indy BBB just rejected our entire industry!!! - Posted by tom-FL

Posted by tom-FL on October 13, 2003 at 20:20:28:

OHMAHGOSH!!!

Say Josh, do you think some idiot from the BBB was watching that TV news expose by the other idiots a few months back, and decided make a name for himself around the office?

Fight back - Posted by Hank FL

Posted by Hank FL on October 13, 2003 at 19:43:25:

>>Since the mortgage is still in the original seller’s name, and the managing company’s rights are all derived from a power of attorney rather than ownership<<

Huh ?

When an investor “gets the deed” , “ownership” has changed hands.

You Indy people might want to educate these BBB guys that quite often, the investor is the only hope for some seller to move on with their lives and/or be relieved of debt.

Is a realtor going to help a guy with a fully mortgaged house that has to move quickly to FL to take care of his Mother? That guy will have to write a check at closing which won’t happen for several months. Will the realtor be making those house payments in the meantime ? I could go on and on (as I’m sure you can) as to how subject-to investors, or rather the sub2 technique, is helping helping sellers every day across this country.

Show them how paying full price with an investor loan for these houses may not be the smartest move.

Get a good lawyer on board as well to show the legality of what you’re doing.

Some people are saying that is doesn’t matter what the BBB says. I think it does matter.

People will read that and will talk about it. People also see stupid anti-investor reports in their local paper and TV news.

Bad word of mouth, over time, can kill ya.

Not exactly the ENTIRE industry - Posted by Doug Pretorius

Posted by Doug Pretorius on October 13, 2003 at 19:01:48:

Only the ‘take over payments’ portion of it.

I’d have to partially agree with the BBB on this, in that much of the ‘investing’ going on is as reckless as they suggest. The sad truth is that sub2 in particular has been promoted as a no cash, no credit, no job, no risk way for anyone with a $500 course under their arm to acquire real estate … and hey, if things go bad, it’s not your problem!

Unfortunately as with all things, the legitimate businesses who have sufficent financial backing, get thrown in the same mix as the seminar-graduate fly-by-nights.

If this is really going to effect your business enough to complain about, why don’t you just start using money partners? Buy the houses outright then you’ve got nothing to worry about.

Re: Indy BBB just rejected our entire industry!!! - Posted by Rob FL

Posted by Rob FL on October 13, 2003 at 18:33:27:

So don’t be in the “we buy houses” business. Be in the real estate investment or the real estate remodeling or some other related business. Personally, I don’t think a company being part of the BBB really means anything, but on the other hand it makes the company “appear” to be reputable.

So what… - Posted by rm

Posted by rm on October 13, 2003 at 16:51:36:

The BBB is an irrelevant organization.

And a major pain in the backside, to boot.

Re: Indy BBB just rejected our entire industry!!! - Posted by js-Indianapolis

Posted by js-Indianapolis on October 15, 2003 at 23:29:50:

Dude, what are you smoking? I have no idea what your first thought was, and your second is no better. Come to think of it, your third thought, “Leaders lead. They don?t want to lead. Its just who they are.” tells me you are obviously NOT a leader. Like someone who tells you how honest they are repeatedly, is blowing smoke up your arse, I have a hard time believing you are leader.