Real Estate Investing in the Real World
Real Estate Blog
WEDNESDAY, OCTOBER 17, 2007

Yesterday I posted a YouTube video about a sting operation busting some shady "Investment Advisors" who had defrauded a group of investors using a common tactic.  This was a variation on the standard buyer-seller kickback scheme that I previously wrote about.  Here's how it works:

I love real estate.  There are millions of honest, ethical investors out there making prudent, informed responsible investments to secure their financial future, but there are also a brigade of scumballs busying ruining it for the rest of us.  Keep your eyes peeled. 

 

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Comments(39)
posted by: Chris Smith
Comments
October 18, 2007
01:45 PM
Chris - Keep shouting it out until people hear. Sometimes I get accused of not caring about the victims or even that I think it's their fault.

Victims are exactly that. My point is that some of these people should put greed aside for a moment and use common sense. How about meeting some prospective tenants? How about reading your loan application? How about knowing that if you make $45,000/yr it's unlikely that you should be buying $2,000,000 of real estate all at the same time?

I don't want this to happen to anyone else. It's why I teach at UMKC in the community education division. If we can just educate the people, the would be real estate investor, how to recognize red flags when they are flying right in front of their face, then we should!

Keep up the good work.
October 18, 2007
04:44 PM
Chris: Thanks for the comment. I think a lot of the people who get hooked in these scams are folks who've recently read Rich Dad Poor Dad or have received some other similar motivational financial pep talk. Then they walk straight into the jaws of one of these hucksters who convince them that just because they only make $45k/year they can still THINK BIG and get rich w/ their $4 million investment. Then next thing you know they're in bankruptcy.
October 21, 2007
12:24 PM
This post illustrates why it is always a good idea to get a second or third opinion before investing. The old saying "if it's sounds too good to be true..."
October 24, 2007
02:30 AM
I know someone in financial trouble due to greed and ignorance. Reading your articles made me realize he is not the only one that was scammed in a real estate deal. Could use any advice to assist him...
October 24, 2007
10:04 AM
L Maxwell. I'd be interested in knowing more about your example. You could send an email (see the *contact us*) or simply respond as a comment. I recently wrote an article about real estate fraud which will soon appear in the Business Journal Network and in the process spoke with an FBI Special Agent working on real estate fraud here in Houston. There are a lot of variations and tricks out there, and we all learn when people like you share your stories.
November 11, 2007
01:12 PM
Not only do you have great content but your research/images are awesome. There are so many scams out there it's easy to walk right into a bad decision. Thanks for the information.
December 03, 2007
10:41 AM
Thanks Ryan - glad to have you as a reader!
April 18, 2009
04:54 PM
This post illustrates why it is always a good idea to get a second or third opinion before investing. The old saying "if it's sounds too good to be true..."

Jeff
bodybuilder forum owner
June 17, 2009
06:51 PM
I just started my investment blog and I know what your talking about. People are just being scammed left and right because they are easy targets in such economic times
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