I received a phone call the other day about another disturbing story of someone getting conned in a real estate transaction in my area.
One of our local hard money lenders (we will call Mr. Smith) was making his rounds to view his properties. He pulled into the driveway of a single family home he owned, and there was a car in it.
This property was supposed to be vacant!
He walked to the front door, knocked on it, and a gentleman answered the door asking, “Can I help you?” Mr. Smith said I hope you can, you are living in my house!
The tenant had stated that he rented the house from Mr. Jones. Mr. Smith got Mr. Jones number from the tenant, called him up, and asked why he rented his house out!!
Mr. Jones stated that he had purchased the home from Mr. Smith on a “seller financed” deal placing $10,000 down, and making $500.00 per month payments for 10 years.
Mr. Smith stated that he is Mr. Smith, and had never sold the home on those terms! He also asked Mr. Jones to meet him at the property with the paperwork showing he made the transaction.
A few minutes later Mr. Jones showed up with the paperwork, and sure enough someone had forged Mr. Smiths name on the docs, and the buyer was out of $10,000.00! The police were called to the home, and a report was filed.
This whole situation could have been avoided by using a closing attorney or a title company for the transaction. I have seen several deals go bad because people have trusted a con artist, and closed their deals on a handshake!
For roughly $500.00 an attorney or title company can handle the transaction for you, and you can rest easy knowing that you have a safe investment with an insured title.
I would rather spend $500.00 to find out I have a bad deal on my hands then to give someone $10,000 with almost no way of getting it back! Real Estate investing is a business, and needs to be treated as one!
I will do a follow-up post on the actual outcome of this deal. Remember, there’s never is a dull moment as a Real Estate Investor!
Have you ever dealt with fraud in a Real Estate deal?
