American Greed? Real Estate stories?

Question

How does a real estate investor avoid being scammed by a real estate con artist? As I am watching episodes of "American greed", I am relieved that I am investing in real estate, something I have more control over than stocks or bonds, something I can add value to. However, the reality is that con artists work in every industry.  What are the typical or most common ways that con artists commit fraud or legally steal from investors in real estate? What are the experiences people have had with con men, being ripped off, being scammed, or someone trying to scam them, in real estate?  Perhaps these stories will prevent someone else from being ripped off. If you haven't watched American Greed, it episodes depict Bernie Madoff style rip offs (https://en.wikipedia.org/wiki/Bernard_Madoff). I like watching this show because it really makes you think about being careful and cautious in your investments. Thanks for any stories or warnings you all can share.

Account Closed · Answer

Great show!

Lelith Walker · Answer

I did the typical due diligence and still got screwed.  Con artist are not always consistent.  They will screw who they feel they can get away with and not do it to others.  I did not know about skip tracing tools until after I was ripped off and believe these are the best way to find out if someone is honorable.  I did have some gnaws in my stomach but I ignored it and would pass it off.  The one that I dealt with named, Wendy Lovejoy, who is on here was the marketing director of GAREIA and a minister.  She has been kicked off the board while I was doing business with her for screwing another person out of $250000.  She also went to jail for residential real estate fraud as well.  When I went to lexis and you can also find this on instantcheckmate you will see that she has been sued by many people.  You will also see that she filed for bankruptcy in order to get out of paying the people she owe.  Other things that I learned is that people pay for recommendations, so if you go to LinkedIn or some other websites you can not always depend on those references.  I called the church she belongs to and they said they never heard of her and that she does not preach there.  Some of them will get a ministers license over the internet in order to gain trust because they know most people are raised to trust ministers and doctors.  Plus as you know ministers get tax exemptions on the homes they own. My experience with her is that she promised she would be the project manager over the homes that I bought from her.  They needed major repair.  She tells me to give her the money for repair.  I ask for a contract.  She says she will give it to me later but she is trying to save me money because the house next door is doing a rehab and I can use his dumpster.  This person also bought those houses from her.  I went ahead and did it.  She then asks for more money.  I still did not get the contract and ask her for it.  I start not to feel right so I send my friend over to inspect the property and we see that no work has been done.  Go checkout 100 percent financed on youtube and you will see the video he did for me.  Its called when to fire your contractor or something like that.  Eventhough I posted here, ripoff report, consumer affairs, bbb, rei-blacklist I have found that she is still ripping people off.  If you go to ripoff report you will see that I am the first one and three other people reported to the site after me.  They say they are going to sue.  I say good luck because I found 3 pages front to back of people she owes and she probably will go and file bankruptcy again in order to skip payment.   Even if you decide to put a lien on her home, wages, and tax refund its going to take a while.  Your lucky if she will be alive before you get any money since she is 58 years old.  I will try to contact the fraud dept, some local news, and this show to let people know that she is a liar, thief and skank.

Ryan Dossey · Answer

Really it comes down to just completing your due diligence. Trust but verify. Check references. Ask questions. Etc. I haven't been screwed over and I'm probably more trusting than I should be.

Most common stories are people paying contractors upfront and the contractor walking.

Investors not giving realistic values. (Always run your own comps)

Most of the pitfalls can be avoided with common sense.