Private Money/ SCAM - Posted by Jonathan Rexford

Real Estate Investing Real Estate Law
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Posted by Jonathan Rexford on January 29, 2001 at 20:52:49:

George,

This does have some impact on our business if you work in a certian market. Now when we do find deals we can borrow from other Private Lenders Hard Money with 15% interest with 5 points and 3% pre payment penalty. Under the terms that this guy got caught. He borrowed the money to purchase the property at 10-12% interest only for 5 year period. This is a pretty good plan if you do a lot of L/O or contract for deed for our buyers. I know I have borrowed hundreds of thousands of dollars from Private lenders some of them participate here on this site. I am at a point of my life I am looking for long term not buy fix and flip. I see your point but as you saud KEEP YOUR EYES OPEN. This guy borrowed money from people that were getting 2-5% in CD’s. That is a shame that they got taken. They have control of a lot more properties. This is only in ST. Lucie County Florida. They operated in Palm Beach, Martin and Central Florida. So who knows where the 16 million went.

Good Luck

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Private Money/ SCAM - Posted by Jonathan Rexford

Posted by Jonathan Rexford on January 29, 2001 at 15:16:04:

This really stinks. I have been looking for private lenders and have a few and something like this happens it really scares the pants off people. I thought the people on the Board would like to read the article.

http://www.tcpalm.com/news/psl/0128psl2.shtml

Happy Reading
Jonathan Rexford

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Re: Private Money/ SCAM - Posted by Merle

Posted by Merle on January 29, 2001 at 21:06:51:

One of these days I will write a response to the question someone asked a few weeks ago, “Do you really need to know how to sell to do this business?” Or, at least, the question went something like that.

Years ago, I learned that the best way to overcome any problem was to meet it head-on. Find a way to bring the problem up yourself rather than waiting for the prospect to do so. If they bring it up, you are often on the defense. If you bring it up, do so to explain how what you do is different.

Just before we started using private investors, we had a situation similar to the one you describe … $12 million. A lot of people were hurt financially. Articles in the paper nearly every day.

I cut out the articles and included some of them with our info packet we sent to prospects … with the appropriate explanation, of course.

During a face-to-face meeting with a prospect, I always found a way to bring up the subject, in a matter-of-fact manner … and used it to explain how our business worked … differently, of course.

No matter what objection the prospect brings up, your response should, in some way, say something like, “That’s exactly why I am here, Mr/Mrs. Prospect.”

Not only will you disarm them (lessen their objection), but you will sound even more authoritative. If “that’s exactly why you are here,” then it sounds like you had some previous knowledge of the need or problem and you have already dealt with it. Their response will be much better than if you stammer and stutter and try to find an excuse for them.

Gotta run … hope this stirs your thoughts,
Merle

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Re: Private Money/ SCAM - Posted by phil fernandez

Posted by phil fernandez on January 29, 2001 at 16:56:59:

George,

I disagree with you 100%. This does concern us and does have a bearing on all of us as real estate investors. If you read the article that Jonathan mentions, in it, it did mention that 36 of the properties have back taxes owed on them. We are out there trying to get people to invest money for our real estate projects. Isn’t this what the people did with the 36 properties that now have delinquient taxes did. It certainly sounds like, these were private individuals that lent their money to real estate investors so that the investors could buy property.

So this is very similar to our business.

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Re: Private Money/ SCAM - Posted by George

Posted by George on January 29, 2001 at 15:34:29:

What is your point??

I don’t see any relationship to our business. Ours is very clean, find a property below market, investor lends his/her money secured by the RE, then we sell, he/she gets his/her money with a handsome profit…end of the story…

Find the deals, and you will find the investors…it is that simple…and stop reading what I call “stupid news”

George

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Re: Private Money/ SCAM - Posted by George

Posted by George on January 29, 2001 at 20:03:52:

I agree that things like that can bring some worry if people focus on only one part of the news. Now what I saw that made me realize that did not apply to us was the fact that it seems that these people were offered an X return in their investment, but not ownership or even an interest on any real estate property.

It differs from our approach because as you know we offer our investors a participation in the deal as lenders or part owners of the property. It seems that in this “ponzi” deal, people were only giving the money expecting a very high return.

I understand your concern, it is easy to confound both situations, specially because the schemers company had control over 113 properties, 36 of them late in taxes. How late? Does properties had tax certificates? Or where close to be sold on the tax deed sale?

I could be missing something, meanwhile, I am not concern…I will keep my eyes open to learn more about this case…

Happy investment George Ruiz