Real danger of asking for private money - long bitter post

56 Replies

I debated on posting this because the incident has discourage me so much. But here it is:

Last Friday I arrived home to a business card from a detective from our police department. I had just got home from visiting my Dad in the hospital, and began returning all of my missed calls and found I also had a voice mail from the detective. Concerned that something was wrong, I called him back. When we finally talked, he let me know that my name came up in an investigation and wanted to talk to me. Since I'm not a criminal and don't associate with them either, this now had me extremely curious.  

The detective stops by later and asked if I knew a couple who are investors in my town. And of course I do. They flip houses routinely, buy at the master commissioner sale fairly often(courthouse steps), have the capability to pay with cash and close quickly. I "got lucky" a few months back when my broker passed me their contact info as good investors to wholesale properties to/work deals with.

My relationship with the couple is short, not even a year, but since we've met I've offered them 3 wholesale houses. The first opportunity I called them, they drove by, didn't want. The 2nd house, we met at the house and walked through it. This was our first face-to-face meeting and the house wasn't for them, but they wanted an agent who could negotiate short sales for them to buy, had leads, and they were fine paying wholesaling or bird dog fees. I was excited because now I get to deal with real investors instead of tire kickers, which seems like the majority of calls I get.

The August foreclosure sale included a property that was a borderline good deal, the house was well maintained and needed minimum work, but was a great buy for a cheap rehab and borderline if you took the rehab farther. I noticed the investors above were working on a prior foreclosure home that they bought at the foreclosure sale, it's on a street that I travel multiple times almost daily. So I stopped and talked to them outside and told them I was close to having this available as a deal and asked if they were interested. After talking preliminary numbers, we agreed that it was borderline  but a possibility.

During a walk through of the potential pre-foreclosure deal, I was permitted to take pictures for my investor clients. Again I stopped and talked to them (outside) at their current flip home, showed pics and discussed the possibility of a deal. Ultimately they passed on the opportunity, no big deal, it still makes a great rental purchase so I have other investors to contact.

As a sidebar to the story, I have flip home that I am working on, and I wanted to get a small private money loan to finish up and cover some expenses to get me through until it sold. I felt like I had a good relationship with these particular flip investors, so I called them and asked if they wanted to give a 2nd mortgage for $3k to $5500 loan at a high interest rate (can't remember but like 25% to 35%). The full amount makes a huge difference to me. The ARV is $89k to $94k, and I'm nearly finished with it, and there's a first mortgage of $58,800. The husband was interested in making the loan but not sure, would take to the wife and call me later. The next morning he called me and said the wife wasn't comfortable and would pass. No big deal.....

Until Friday when the detective shows up. The detective is asking if I know them, yes I do... had I been to their house, yes I have..... Did I ask them for money, yes I asked if they wanted to give a loan... have I stopped talking to them? NO I just don't have a deal close enough to call them yet and offer it to them. Apparently they had a break in at their house and tools stolen.

Then the detective, with my daughters home, asks if he can look in my garage without a search warrant. Now I'm offended and starting to get mad. But I don't have anything to hide and agree. Then he looks in the trunk of my dad's cars that I'm driving while Dad is in the hospital. So I figure why stop there, lets go look at my flip house and the storage building there. So we do. Before we left he asked me if I'd take a polygraph and of course I don't care. Then it hits me that the best clients that I had developed so far to wholesale deals to, now think I stole from them. With the detective standing there, I called them up and told them I didn't have anything to do with any burglary they had and I hope they catch who did. The investor blew me off.

I went from offended, hurt, to angry in a very short period of time. I work my butt off to learn and take action to feed my family. Times may be difficult, but to be accused of stealing without technically "being accused" has me over the top upset. I can't decide if I should quit the business or keep pressing on to make things happen. I don't think working hourly is going to give my daughter's the best life they deserve. And although there's financial difficulty, I want to prove to my daughters that hard work pays off. You have to hustle and you will be rewarded. I'll get my flip house done somehow soon enough and continue my way to success.

This Monday will be the September foreclosure sale at the courthouse, and I'll be there along with the investors. I have words for them, but can't decide if I should ignore them, unleash what I'd really like to say for accusing me (maybe they were just covering all the bases for investigation), or just wish them well. Not sure that I'd ever work with them again anyway. 

Moral.... Be careful of whom and when you ask for a private money loan, coincidence can leave you looking like a scum bag thief.

I'm sorry that happened to you. :-( Being accused of something you didn't do is awful. Don't get discouraged.

That is so weird.  I'm sorry it happened to you. 

Of course you don't quit because of this!!!  These aren't the right people for you to work with.  That is OK, you will meet other people.  Hang in there.  

I wonder if the police simply asked them for the names of all the people who were recently at their place, and you were one of them.  It might not have been that they were pointing a finger at you specifically.  Take some deep breaths and keep on trucking. 

Great story.  not that what happened to you is good but great detail.  

I friend of my is a detective and he said that the vast majority of theft related stuff is BS, but they still have to look into it. The fact that the detective and not the cops showed up is really good.  the fact that you got angry is GOOD.  innocent people get angry when accused of something they didn't do.  

quite frankly, the real estate business attracts a lot of unscrupulous and unsavory characters.  don't take it personally.  i'd bet that 1 in every 20 of us will run into the law at some point in our careers.   most of it will be just a waste of our time.
although polygraphs are inadmissible, i think the detective wanted to see if he was wasting his time pursuing you.  a friend of mine was accused of rape and he, like you, was absolutely furious and took a polygraph within a day.  he showed the results to the detectives and very shortly after the charges were dropped.  

as much as i'm sure you'd like to walk up to them and spit in their faces later this month, i'd advise professionalism.  however, it might be a good deed to warn others that they fabricate stories about innocent people.  maybe their accusations will dissuade others from working with them.

stick with it and best of luck.  go make a ton of money and buy your daughters something nice.  the looks on their faces will make it all worth it :) 

Side note-

for 3k-5k etc. 

Those no interest cash advance checks your credit card company always sends out would work well in this situation.

Definitely don't let this discourage you and don't get angry or "have words" for them when you see them. Once the truth comes out then they will feel stupid for accusing you.

Thanks @Account Closed  I'm glad your friend was cleared quickly. I also now wonder if these are the type of people that would commit insurance fraud just to get a few extra dollars. It's a stretch, I don't think they would. But the detective needs to work with urgency to catch who really did it.

@Chris K.  It's difficult to take the high road with such a personal insult. I guess if my house got broken into, and they asked me for all the names of people whom came by, I would tell them to help solve the case. Maybe that's how my name came up.

Regardless it's definitely still insulting and embarrassing!

not to sound like i know everybody, but I worked at a bank many years ago and had a client who was a professional "suer."  every few years she'd come in with a check for 200 - 800k from some lawsuit she won.  she didnt have a regular job - she just sucked on the system like a parasite.  

again, lots of people out there who do not care what damage they inflict.  they're just after a buck at all costs.

Originally posted by @Jody Young:

@Chris K. It's difficult to take the high road with such a personal insult. I guess if my house got broken into, and they asked me for all the names of people whom came by, I would tell them to help solve the case. Maybe that's how my name came up.

Regardless it's definitely still insulting and embarrassing!

 Trust me I 100% understand how you feel being accused of something. I have been there and even worse in my case is they took my belongings (that I could provide reciepts for) and will not return the stuff nor my phone calls to explain whats going on. So yes it's extremely difficult to take the high road but getting mad won't really do much.

@Jody Young   It sucks to be falsely suspected of a crime. But I think you're overreacting. Through no fault of your own you do look like a potential suspect and the cops would be negligent not to check you out. You've been to the property so you know what they have there, you're working on flip so you have need of tools, and your request for a small second mortgage at a high interest indicates that may be having some money problems. 

Someone stole from them. It was probably someone they know, probably even someone they've trusted. I wouldn't assume they felt great thinking that it may have been you.

@Scott Pigman  I may be overreacting. By getting the opinions of others, I'll know.

I live in a city of 50k people, only 100k people in the county. When you work you butt off to build relationships with the few people actually doing deals, it sucks to lose a relationship that was mutually beneficial. There's not many consistent flippers here.

This doesn't seem to have anything to do with asking for a loan.  I suspect they had a theft, called the cops and they gave them a list of people who had been around recently.  And perhaps mentioned you had asked for a loan.  The probably raised eyebrows with the cop and put you higher on the list of suspects.  No reason to be insulted.  The detective was investigating their leads.  You were (maybe still are) one of them.

Originally posted by @Jody Young:
it sucks to lose a relationship that was mutually beneficial.

It doesn't have to be like that. Hopefully the real criminal will be caught. Your name will be cleared. You say, "look, I was pretty shocked and upset when the cops showed up, but I understand that they were just doing their jobs. I'm sorry for flying off the handle. What do you say we put it behind us?"

Easy on the emotions....Take the polygraph, clear your name and let them move on with their lives.     Leaving doubt will only tarnish your name in that small town.    You may be innocent till proven guilty but if they told me their version of the story I'm not inviting you into my house to show/sell it.    Too many other agents to choose from.

Obviously you shouldn't have to do the test, and legally we all know you don't have to.  Doesn't change the reality that this will hurt you if left incomplete.    In theory you might actually come out ahead since they know you are honest when you pass.

@Jon Holdman  The detective mentioned that it because I asked for the loan, and then they haven't heard from me since. I think that's the only reason, but I do understand his point.

@Scott Pigman  I'm hoping so! I even thought about offering a reward out of my pocket for information leading to the arrest of the real criminal. 

Absolutely agree @Leigh C  . The sooner they clear me so we get back to business as usual, the better. I thiink it's still going to be difficult to send them deals right away if they thought that I did do it. But if it was just a matter of saying "hey, he was here and it wouldn't hurt to talk to him" then I'll just look forward to doing deals again.

@Jody Young  

The best revenge you can ever have is to succeed!  Go about your business.  Don't go out of your way to be friendly, but don't saying anything to them about it.  Just go about your business with integrity and hold your head up high.  You did nothing wrong. 

In the future, they will simply miss out on deals you are offering, because those are not the type of people you want to do business with. 

I don't know how or why the police wound up on your door step.  However, this "man" blowing you off, when you called him, tells me everything I need to know about his character.  You're better off.  If your deals are good enough, you won't have any problems finding buyers.  Post the deals here on BP, if you need to.  You'll get the buyers you need.


I sense you are making a lot of assumptions in that case. My personal recommendation is to involve a lawyer should you not be cleared quickly. The circumstances might be exactly as you describe. But until you have clear evidence for that, I would be very cautious. Neither party involved, except you, works for your interest.

Why are you taking this so personally?  You don't know their side of the story.  You don't know what they said to the police.  You have never even done business with them.  

Maybe the detective is a friend of theirs and following 10 different leads?  Maybe they said they didn't think it was you to the detective?

At the end of the day you have to let your pride aside and think about what actual damage this caused for you?  You're innocent and willing to take a polygraph.  The detective looked through your house.  

Move on.  Learn from it.  Since they have passed on 3 out of 3 deals what are you missing? 

Thanks @Hattie Dizmond  I'm taking your advice to heart.

@Steve L.  Good point. I guess I was hoping that as the deals get better that they would be there as wholesale clients if I'm not going to rehab the house myself. But you're right, we haven't even done one together.

I heard an interesting piece on our local NPR station.  They were interviewing a young man who had been stopped by the police and ended up getting pretty badly beaten.  He is now teaching a class on interacting with the police.  One of the things he mentioned was that you have to assert your rights or you can end up losing them.  So, when the detective "asks if he can look in my garage without a search warrant", you probably should have heard that as "will you waive your right to a warrant before we can search your property?"  Because you answered that as "yes" when you maybe didn't really mean that.

I don't know that not asserting my rights was the right or wrong thing to do @Jon Holdman  but I was too afraid that taking that position may give a perception of guilt, and I don't want anything to do with that.

After thinking about it, I'm pretty sure the officer never asked me where I was when the incident took place. If he didn't mention tools and compare my saws (at my flip house) to papers he was holding, then I wouldn't even know what was missing.

Still hoping they catch the perps asap.

Originally posted by @Leigh C:

Easy on the emotions....Take the polygraph, clear your name and let them move on with their lives....In theory you might actually come out ahead since they know you are honest when you pass.

 Watch this video and see if you still feel the same way:

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