Scams and their scammers - Posted by Gerald(NC)

Real Estate Investing Real Estate Law
1

Posted by rdlazo on June 16, 2005 at 13:41:47:

Thanks for sharing the info. US mail
order CO’s tell you to allow 3 to 4 weeks
for delivery, this must be the reason.
Knowledge is power, the more you know the
less likely you will get taken advantage of.
I will know a scam in RE from a distance.
Know who you are dealing with.
Use closing agent like escrow and title
insurance co on your deals. Verify ID
of sellers if buying and verify ID
and money of buyers when selling.
Avoid people who are in a hurry to buy
or sell unless you know there is
legitimate reason to hurry.
Have a mentor or mentors you can trust
giving you second opinion while
starting who will not steal your deals.
Talk to mentors when things smell fishy.
Be willing to pay back with favors
or pay money when it is time to do so.
Share knowledge and ideas when
opportunity comes.

RDLazo

2

Scams and their scammers - Posted by Gerald(NC)

Posted by Gerald(NC) on June 16, 2005 at 11:16:01:

I know there’s scams in REI, so I was hoping some of you would teach us newbies about them and your experiences.

I’m a lil pee’d right now cuz I have been attempted to be scammed. I sell automotive performance parts on the side right now. I have done a few international deals that have been fine. 1 $17,700 to Germany. I’ve seen most of the scams and know how to weed them out.

Well if I would have had the parts, or my wholesaler had the parts I would have just gotten screwed for $3750! Had a Jamaican order a turbo kit and an electronic piece from me. He was sending a certified check for the exact amount, (not the old certified check for more than your asking scam). Seemed totally legit. I even emailed him when the check hadn’t arrived when he thought it would. He then said he’d check with the bank.

By the end of the same week I received it. Don’t know why I did it, lol, but I held it up to the light to see if it had the watermark that it was supposed to. And it did! I was happy lol.

So I knew it’d be a few weeks before I’d get the parts, and knew my profit in the deal. So I used some of the money, lil more than my profit, to continue doing some of the work I am currently doing on my own home.

Well, yesterday I tried to order my domain name for my future REI business, and it wouldn’t accept my debit card. I was like wth? Even tried my Paypal card, knowing it would draft from my bank, thinking maybe it was just the card for some reason. Once it was refused, I went to my online banking site, and lo and behold I was -$735! Day before I had $3050! Autmotaically I knew there must be a prob with the check.

So I went to the bank and sure enough it had been returned, even though their computers hadn’t shown it yet. So I had to borrow $$ from the in laws, (just screams FAILURE! to me when I have to), to get the account back up to positive and cover some other things going through from the day before.

Anyway, I’m still screwed because of some probs I’m having with my Paypal and a past customer too. So I’m really thinking of going with my magazine creation I wanna do instead of even REI due to the susceptability of being scammed. My wife’s already “not for me doing REI” and now with my prob with this Jamaican dude, she’s even more against it. :frowning: Me too a lil.

So share your stories with us newbs please.

Thanks

3

Re: Scams and their scammers - Posted by dealmaker

Posted by dealmaker on June 16, 2005 at 21:20:36:

About 15 years ago I had an agent call me about one of my rentals, wanted to know if I’d pay a commission, told him NO. He said that was OK, he’d get it from the couple that wanted to rent the place.

That seemed a bit odd to me. I’ve been a “commission only” salesman for most of my life, and I don’t give up easily on commissions. Told him to bring them to the house, then we’d go to my office and I’d run a credit check on them. He said he’d already run one, OK.

I show them the house, and they like it, told them, $900/month rent, $1200 security deposit, two year lease. He says OK, we go to my office and the agent hands me the credit report on these guys, not great, not bad, typical for a renter.

OK I said, hand me your DRIVERS LICENSES so I can make copies, very guilty looks between the husband and wife. Guess what, neither name matched the name on the credit report. Tossed the out of the office and called the broker. I also called an agent buddy of mine and he alerted all agencies in the area. But some agent rented to them anyway, and evicted them 4 months later.

Always check IDs.

dealmaker

4

Don’t feel like the Lone Ranger… - Posted by Killer Joe

Posted by Killer Joe on June 16, 2005 at 14:52:38:

Hi Gerald,

Dealing across international boundries has its pitfalls. My wife and I own a retail store that sells imported products from Germany. Two years ago we got an order over the internet for 100 Grundig Short Wave Radios. That’s right 100! Needless to say my wife was rather pleased. I was sceptical why a person in Europe would be ordering the radios from us in California, when we have to import them ourselves.

The order was placed on a credit card, and the $17,000 was credited to our account. My wife purchased the radios at our cost and was getting ready to ship them overseas when I became very uncomfortable with the deal. It just never sat very good with me. I had her hold the shipment for three weeks just to be sure.

A little less than a month after the money was credited to our account it was recinded by the CC company. It took almost a full billing cycle for the card owner to get his statement showing the $17K purchase. He got his money back, and we had 100 radios in stock at a cost of $10K. You can’t just give 100 radios back to the distributor, so we made them ‘Loss Leaders’, and traded 50 of them to the distributor for multi-system VCRs and other goodies.

We didn’t lose any money in the end, but it tied up a good chunk of working capital for a long time. Had we shipped the radios, we would have been out a small fortune.

The lesson we learned was to not be overly optimistic about our chances of becoming the International Wal-Mart of German products. It also helps to have sufficient working capital to keep from drowning if you get scammed. My bet is you won’t fall for that crap again. We’ve had others try it with us, and now we just get a big laff out of those orders.

KJ