SCAM...beware inexperienced investors!

SCAM...beware inexperienced investors!

Investor · Peabody, MA · Member since 2015 · 114 posts · 107 votes

Not that we are super experienced but if we hadn't taken classes this is something we may have fallen for. 

Recently we found a house for sale by owner on Zillow. We contacted the seller and received a text back that it was still available for the price of $50k..he just wanted to sell it to pay off his mortgage. We looked up the history of the home and they had purchased the property in 1999 for $200k so it was possible they only owed 50k and just wanted to get rid of it. 

The guy's story was that he and his wife had already moved to Virginia and needed to sell the home. They were currently renting it out we should do a drive by and make sure we were really interested before he puts out his tenants. Fair enough. So we drove by and were very interested, the the place looked great so we wanted to get it under contract to show were were serious and we would do our due dilligence after we secured the property and back out if there were any huge issues. 

I wrote up a contract including a $100 deposit and sent it to him to sign at the email he provided. The email was the first and last name of the deed holder at yahoo.com. The fact that we couldn't seem to get this guy on the phone was a bit of a red flag but we hadn't put any money down or locked ourselves into anything so we'd proceed with caution. He also had a phone number from Nevada which was odd but in doing research I found that the couple who owned the house got married in Vegas so there was a small Nevada connection. 

We waited for the contract to come back signed. Instead he asked when we could provide $1000 check so that he could hold the house for us. We explained that we wouldn't send him money directly because we had no proof this was legit and asked for his lawyer's contact information which he provided. We would put the money in an escrow account and he'd get it when we closed. He said okay but still didn't send the signed contract. A couple hours later he asked about the deposit again like we had never had the previous conversation. Some people are slow so we explained again about the lawyers, escrow, blah, blah. 

Still no contract so we were pretty sure something was up (as we were suspicious of the whole time) so we called the number he gave us for his lawyer and no one answered. He then called us and could barely speak english and the connection was terrible. We knew then 100% that it was a scam but decided to mess with him anyway. We asked him for a copy of his drivers license. He sent some picture of a Texas driver's license with the name Chris Osborne, a picture of an older fellow and a birthdate of 1975. He called us a few more times and we told him we knew it was a scam and we were going to report him. He got angry and eventually text'd "Mugu!". We googled it and found this was a Nigerian term for "you fool". So he called himself out.

I called the real deed holders to warn them that someone was trying to sell their home and they were thankful we called. We never sent the money and never would have but there are probably many out there who wouldn't know any better and may have sent whatever amount he asked for that they would never see again.

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Colorado Springs, CO · Member since 2015 · 10 posts · 6 votes
11y

It's amazing how slack some people really think everyone else is, especially if you went so far as to let him know how much you really knew what you were doing in regards to the actual transaction...   Yet he continued to attempt to lead you astray...    I'm quite new, and it's unfortunate in my quest to learn, it's situations like this which make me hesitant.   I know however, I can't let situations like this stop me or I'll never make my first deal.  Wow! But the fact that I did buy my own primary home keeps me motivated in realizing that I can do this.

Thank-you for sharing,

See this reply in the discussion

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  • Real Estate Agent and Investor · Los Angeles, CA · Member since 2015 · 52 posts · 20 votes
    11y

    This is actually pretty common. Just recently the FBI came public saying that Americans lose Billions every year with this and other similar scams. There have been people renting apartments from people who were being evicted. Others have locked a vacation rental on the beach or on the mountains, just to show up to an already occupied property in the middle of the night.

    As real estate agents we advertise our properties all the time. Once we got what seemed to be a great lead via email - someone who was very interesting in looking at a home within a few days, over that weekend. On further inquiring and despite she tried to hide it we found out she was 12! THat is one of many reasons why we do not make appointments to show property until we have seen and verified a pre-approval letter.

    Bottom line is, with new leads, we never know who we might be communicating with. When having a semi public life, we are all subject to scammers and spammer, specially with platforms like Linkedin and BiggerPockets, which make our email addresses public whether we like it or not  : )

    ~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.
    Josie Roman
    BRE License # 01306222

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Josie Roman

      there was another thread today.. and it was about pre approval letters and one of the posters commented that they were not necessary etc. and back in the day that's probably correct or in a severe buyers market..

    but now with this type of fraud forget about market conditions and any other sales type tactics this is for financial safety and human safety ... My wife has been a broker for 20 years and she has pretty good   weirdo radar when guys want to look at homes and when she arranges for one of our other agents.. they are like NO I only want to meet with you.. that's a red flag   for someone hitting you off the interenet.. LOL...

  • Real Estate Agent and Investor · Los Angeles, CA · Member since 2015 · 52 posts · 20 votes
    11y

    @Jay Hinrichs

    Oh yes, we've got some of those also. My rule of thumb is if they are willing to show me a pre approval or they are willing to go thru the process with one of our lenders, then they are serious buyers so I may work with them or hand them to a team member once we have the document on hand. Otherwise they are just wasting your time as a Realtor, whatever their ulterior motives might be, hitting on you, looky loohing property, fooling you, getting out of their lonely place, etc.

    Pre-approvals are essential in any market. Without them you and your prospect may be wasting time looking at property they ultimately can't afford it, so that is the very first thing we settle when we get a buyer's lead.

    ~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.~.
    Josie Roman
    BRE License # 01306222

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    not a new scam.  been in the rental market for a few yrs even had a conversations with a few detectives about this involving our properties 

    the new kink is that it's move to the retail side of it.  

    but I got this scam beat.  they will never be able to use my houses again to profit from it.  I guarantee it. 

  • Investor · Peabody, MA · Member since 2015 · 114 posts · 107 votes
    11y

    @George P. 

    Great work outta you

  • Investor · DFW, TX · Member since 2013 · 319 posts · 101 votes
    11y

    @George P.

    Do tell? Not sure how you'd be able to guarantee this, besides not owning any houses? 

    I remember reading about some reporter who briefly took title to the Empire State building as a stunt a (maybe not so?) few years ago. As long as there is paperwork, there will always be fraud. Trust that spidey sense!

  • Bowie, MD · Member since 2014 · 12 posts · 1 vote
    11y

    This is very bad, many people are falling victim that's why they continue to do what they are doing . 

  • Investor · Plano, TX · Member since 2013 · 63 posts · 11 votes
    11y

    Wow! Great timing on reading this post.  My wife is a Realtor and helping a client find a new home to rent.  Her client found a lead on Craigslist, inquired and received a fishy email, which was forwarded to my wife for vetting.  A property where market rent would be ~$1,600 is listed for $1,000 with all bills paid!  What a deal, right?  So, the "owners" have already moved down to Harlingen for their church and the utilities on the house are paid for because the owners are involved in a government program that covers the rent.  The email had clearly broken English and the name they used was not the current owner, but who owned the property last year.  When she reached the owner by phone he got very frustrated when this was brought up and ended the phone conversation.  I'll have to ask the wife for more details, but this was so crazy!  This was for a house in Frisco, TX by the way.

  • Rental Property Investor · San Antonio, TX · Member since 2015 · 272 posts · 50 votes
    11y

    Thanks for tip!!

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    11y
    Originally posted by @Dmitri L.:

    @George P.

    Do tell? Not sure how you'd be able to guarantee this, besides not owning any houses? 

    ...

    One way is to "watermark" your photos using a site that embeds text into the photo.   That might be what George is doing. 

  • Edgewood, MD · Member since 2014 · 79 posts · 17 votes
    11y

    Theft by Fraud is a criminal offense. Report it to the States Attorney.

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @Ronnie Wilson:

    Theft by Fraud is a criminal offense. Report it to the States Attorney.

     better yet...  Nigerian CIA

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @Steve Babiak:
    Originally posted by @Dmitri L.:

    @George P.

    Do tell? Not sure how you'd be able to guarantee this, besides not owning any houses? 

    ...

    One way is to "watermark" your photos using a site that embeds text into the photo.   That might be what George is doing. 

     no. 

    http://www.biggerpockets.com/forums/52/topics/199819-ideas-on-preventing-craigs-list-ghost-ads-avoiding-cl-for-rent-scams

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    11y

    Get them on Skype video. Gets rid of almost all scammers immediately.

  • Investor · Sparks, NV · Member since 2014 · 5 posts · 0 votes
    11y
    Dmitri L. They can do ACH withdrawals from your account if you provide your account details. Usually it would be your account number and routing number. I spoke with a banker last week and this is happening more frequently. FDIC law states you can get the money back if it is reported within 30 days if you are a consumer, but if it is from a business account you have to report it within 5 days. She said she is seeing situations where people will use ACH withdrawals to pay credit card bills, student loan payments, whatever. So be careful! Don't give that info out!
  • Investor · Springfield, VT · Member since 2014 · 158 posts · 75 votes
    11y

    Oh no... the Nigerians are back!

  • South Jersey, NJ · Member since 2014 · 154 posts · 50 votes
    11y

    I've seen a few of these.  I'm in the research stages of becoming a real estate investor.  There's a town near where I grew up that I'm most interested in.  Its a less designable area because of the schools, but is overall safe.  Housing is very affordable and makes me comfortable to start there.  But I keep seeing houses that "need work" but still shouldn't only cost $50-75k.  $100k seems fair.. these listings will be up for 2 weeks then they are just gone, no off the market, or any trace of them at all.  This is in NJ, I have to imagine they are similar scams.

  • Stockbridge, GA · Member since 2015 · 159 posts · 33 votes
    11y
    Originally posted by @Erica Nagle:

    Not that we are super experienced but if we hadn't taken classes this is something we may have fallen for. 

    Recently we found a house for sale by owner on Zillow. We contacted the seller and received a text back that it was still available for the price of $50k..he just wanted to sell it to pay off his mortgage. We looked up the history of the home and they had purchased the property in 1999 for $200k so it was possible they only owed 50k and just wanted to get rid of it. 

    The guy's story was that he and his wife had already moved to Virginia and needed to sell the home. They were currently renting it out we should do a drive by and make sure we were really interested before he puts out his tenants. Fair enough. So we drove by and were very interested, the the place looked great so we wanted to get it under contract to show were were serious and we would do our due dilligence after we secured the property and back out if there were any huge issues. 

    I wrote up a contract including a $100 deposit and sent it to him to sign at the email he provided. The email was the first and last name of the deed holder at yahoo.com. The fact that we couldn't seem to get this guy on the phone was a bit of a red flag but we hadn't put any money down or locked ourselves into anything so we'd proceed with caution. He also had a phone number from Nevada which was odd but in doing research I found that the couple who owned the house got married in Vegas so there was a small Nevada connection. 

    We waited for the contract to come back signed. Instead he asked when we could provide $1000 check so that he could hold the house for us. We explained that we wouldn't send him money directly because we had no proof this was legit and asked for his lawyer's contact information which he provided. We would put the money in an escrow account and he'd get it when we closed. He said okay but still didn't send the signed contract. A couple hours later he asked about the deposit again like we had never had the previous conversation. Some people are slow so we explained again about the lawyers, escrow, blah, blah. 

    Still no contract so we were pretty sure something was up (as we were suspicious of the whole time) so we called the number he gave us for his lawyer and no one answered. He then called us and could barely speak english and the connection was terrible. We knew then 100% that it was a scam but decided to mess with him anyway. We asked him for a copy of his drivers license. He sent some picture of a Texas driver's license with the name Chris Osborne, a picture of an older fellow and a birthdate of 1975. He called us a few more times and we told him we knew it was a scam and we were going to report him. He got angry and eventually text'd "Mugu!". We googled it and found this was a Nigerian term for "you fool". So he called himself out.

    I called the real deed holders to warn them that someone was trying to sell their home and they were thankful we called. We never sent the money and never would have but there are probably many out there who wouldn't know any better and may have sent whatever amount he asked for that they would never see again.

     Hello Erica,

    Thanks for the information. This will certainly assist most of the "flippers" on here.

  • Investor · Willis, TX · Member since 2014 · 245 posts · 124 votes
    11y

    @Erica Nagle

    Excellent story and great that you are sharing it for others! Well done!

  • Investor · Indianapolis, IN · Member since 2015 · 143 posts · 82 votes
    11y

    Ive been waiting for a scam like this to come across my path. I have a plan to make fake western union confirmation numbers and make the scammer make at least 3 trips to western union thinking he will get paid.  Each time they come back to me I will tell them I screwed up 1 number and they need to go back, thats why it didnt work.

    Haha, this way they at least waste valuable time and gas having to go to a western union location over and over again.

  • Real Estate Agent · Orlando, FL · Member since 2015 · 28 posts · 13 votes
    11y

    Thanks for the post. I'm glad you were able to recognize the scam before it was too late. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    I wonder if this is common in Canada  Australia Great Britian ext.. were you have robust RE markets and investors..... or do they just think us USA citizens are the dumbest on the planet ? 

  • Roy N.Pro Member
    Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
    11y
    Originally posted by @Alexander A.:

    Ive been waiting for a scam like this to come across my path. I have a plan to make fake western union confirmation numbers and make the scammer make at least 3 trips to western union thinking he will get paid.  Each time they come back to me I will tell them I screwed up 1 number and they need to go back, thats why it didnt work.

    Haha, this way they at least waste valuable time and gas having to go to a western union location over and over again.

     There was a fellow in Edmonton, AB a few years ago who strung along a Nigerian scammer for several weeks and recorded all of their interactions.  You can probably still find it online.

    Jay, they prey on the entire first world ... not just North Americans.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Roy N.

      well that does make me feel better !!.... they are crafty...

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Erica Nagle

      I just got this one an hour ago:

    Dear Entrepreneur

    Pataya Investments Management Group is venture capital
    firm specializing in growth capital investments.It seeks to invest in
    public and private securities in a broad range of areas including real
    estate, energy, oil and gas,emerging markets, and high-technology. Within
    the technology sector the firm focuses on communications, software,
    Renewable Energy Real estate services.they wish to loan out or invest
    between $20Million-$100Million in any viable projects. If your company requires

    funding on an investor capacity, after review of your Business Plan
    we shall determine on the projects possible funding.This will be a private
    and confidential Investments..Endeavor to respond promptly if the
    investment proposal meets your company's proposal.
    Contact Pataya Investments management

    Kindly Regards,
    Mary Ferguson
     
       I took the hyperlink out so no spam could happen... you send these guys a business plan and within 48 hours you will be approved for 20 million just send us 50k for due diligence LOL

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