"Make Big Money in Foreclosures - Without Cash or Credit" is the title of the book. A website that calls itself "Foreclosure University" tantalizes the reader with the statement that "...Real estate investing has been taken to a new level as more and more investment opportunities pop up everywhere." Another website offers seminars, books and courses, private counselors and recommendations... "Make Big Money in Foreclosures - Without Cash or Credit" is the title of the book. A website that calls itself "Foreclosure University" tantalizes the reader with the statement that "...Real estate investing has been taken to a new level as more and more investment opportunities pop up everywhere." Another website offers seminars, books and courses, private counselors and recommendations...
Two things will always be true. 1) Investing in real property has been and will likely always be one of the best wealth-growing tools. 2) The appeal of "get rich quick" means that real estate investment has always been popular and lucrative area for scamsters.
Real Estate Investment Seminars are especially popular whether the market is booming or tanking because they promise to distill the skills and the intuition it takes to be successful in real estate, which normally take years to develop, into a few short hours.
A real-estate seminar promoter in Pittsburg received 30 months in prison after pleading guilty to defrauding more than 1,000 people over a five year period. His ads offered to "share in the profit" of any real-estate transactions that seminar attendees brought to him. These folks paid $1,500 each to partner with the promoter in his real-estate business. According to the FBI the promoter lived mainly off of seminar proceeds and that the income from his real-estate deals was scant.
For more about real estate seminar scams go to the FTC website www.ftc.gov and look up "The Seminar Pitch: A Real Curve Ball."
Let's say that you're wary of seminars but scams come packaged in lots of different ways. Here are some of the telltale signs that can reveal a scamster courtesy of John T. Reed's Real Estate B.S. Detection Checklist:
- Brags about his luxurious lifestyle
- Makes extraordinary claims about their reputation and associations
- Never talks about his mistakes
- Everything is positive
- Has a one-size-fits-all approach
- Offers lots of motivational pep talks
- Claims to do many, many deals
...and the list totals 55 items! To see the whole list go to: www.johntreed.com.
You have to wonder about the motivations of these Investment Gurus: If investing in foreclosures is a great business why are these people selling you and me "where the treasure is." Anyone who really thinks they've found treasure, digs it all up first, puts the proceeds in the bank and then – maybe – writes about it. Additionally, if these folks really had a heart to share their success with the less fortunate, why are they charging for their "tricks of the trade?"
The collapse of the subprime mortgage market has exposed fraud at the highest levels of the real estate investment market. Last week two Bear Stearns managers became the first executives to face criminal charges. But they're just the tip of the iceberg. In 2007, banks reported nearly 53,000 cases of suspected mortgage fraud, up from more than 37,000 in 2006, and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network. As a result the FBI has been cracking down nationwide through Operation Malicious Mortgage. On June 20th the Justice Department issued 400 indictments in Southwest Florida alone.
Here are some basic ways you can protect yourself when entering into any real estate deal:
- Take your time. Don't be rushed into buying anything.
- Thoroughly investigate the deal and the people you're considering investing in.
- Be wary of "success stories" or testimonials.
- Ask a lot of questions.
- Do your homework.
The best tip is to find someone you trust and take time to get to know them. Before you invest your money, invest your time.