People who have been scammed by a real estate con man look back and wonder, “How could I be so stupid?” Don’t be so hard on yourself. It’s not a matter of intelligence, necessarily, but these people know how to push the buttons that incite you to make bad decisions involving large sums of money.
The following advice from Jason Hartman probably applies to confidence games in any segment of the economy, but we’re going to use it for real estate.
Don’t you love the deal that allows no time to investigate the particulars but plenty of time to scratch a check? Seriously, don’t even think about falling for this scam. There is no “deal of century” that, once gone, will never arise again. When it comes to real estate, there is always another deal around the next corner. Be patient. Land is bought and sold around the country on an almost continuous basis. You will find another deal. We suggest you make it a matter of course to never allow yourself to be pressured into buying something through the threat of a short deadline. Just don’t do it.
Interest Rate Shenanigans
Ridiculously high rate of return offers should not pass the sniff test, especially if the rate is substantially above the normal for a similar financial deal. You find this with developers sometimes. What you’ve got to ask yourself is why on earth are you being offered a rate that is so out of whack? The answer is that he may be hoping you’ll be so enamored of the number you’ll fail to notice the inherent risk of the deal. Just remember, if something is strange, there’s a reason.
Can’t Understand the Deal
Any person of average intelligence should be able to understand a real estate deal they are contemplating without dragging in Donald Trump as a lifeline. Certainly, there are plenty of creative ways to structure a deal, but it should not be an exercise in obfuscation. If it is, don’t put up money and don’t sign on the dotted line. Another thing – read the documents! You’d be surprised how many times people don’t take the time to actually read the darn things. That, friends, is a perfect way to think you’ve bought something you really haven’t.
Bottom line – don’t get conned. It’s not fun even a little. (Image: Flickr | stevendepolo)