Wholesaling a deal with violent felon - what would you do?

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Wholesaling a deal with violent felon - what would you do?

Kristin Whitaker
Investor · Spokane, WA · Member since 2013 · 117 posts · 64 votes

Hello all,

Searched the forums with quite a few different keywords but didn't find any discussions similar to this.

I've come across a deal on a rural property, numbers are great.  Not a bad area, probably B-.  Just rural.  Homes selling on the high end for the region.

The owner wants to get rid of the property because he's let his sister live there who is married to a violent criminal with 17 assaults on his record.  Last time owner was at the property, husband answered the door with a gun to his face. 

So needless to say, I will not be touring the house or property.  Number is low enough that I don't feel like I have to anyway.

There is no written lease in place.  Owner says they are "squatting."  92-year old father is also there "squatting."  

My plan is to wholesale, but I can't really show any potential buyers inside.  I don't really want to pass this problem of a violent (and now even more pissed off) criminal on to any of my buyers either.

What would you do?

Pass on the deal?  Tell the owner to get rid of them THEN we can make a deal?  Go ahead and get it under contract and try to find a buyer anyway?  And the elderly father issue - kinda feel terrible about possibly kicking him out of his home at 92 years old..   

Gut tells me to walk away but I know there's a way to do this and make (almost) everyone happy.

Thanks for any insight!

Kristin

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Mike Hicks
Real Estate Agent · tampa, Florida (FL) · Member since 2013 · 206 posts · 96 votes
10y

I would pass. Not worth my safety to deal with an issue like this. However if I was the homeowner and knew that the felon owned a gun and wanted him out, I would call the police and tell them that I knew a gun was in the house and a felon living there. easy enough way to get him out.

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  • Mike Hicks
    Real Estate Agent · tampa, Florida (FL) · Member since 2013 · 206 posts · 96 votes
    10y

    I would pass. Not worth my safety to deal with an issue like this. However if I was the homeowner and knew that the felon owned a gun and wanted him out, I would call the police and tell them that I knew a gun was in the house and a felon living there. easy enough way to get him out.

    5Reply
  • Jacquelyn Sarpong
    Bronx, NY · Member since 2016 · 134 posts · 21 votes
    10y

    Nothing is worth your safety. Girl run as far and fast as you can.  

    2Reply
  • Kristin Whitaker
    OP
    Investor · Spokane, WA · Member since 2013 · 117 posts · 64 votes
    10y

    Thanks @Mike Hicks, I know he has gotten the police involved several times recently.  Will pass that tip along.

    Made me laugh @Jacquelyn Sarpong, not a funny issue but the way you phrased it :)

    I'm leaning towards giving him some advice to help him help himself get felon off the property, waiting til father passes or moves to continue discussion.

    1Reply
  • Sean Kuhn
    Minooka, IL · Member since 2013 · 353 posts · 85 votes
    10y
    Please pass, it's not worth it at all. There's other deals out there.
    0Reply
  • Shannon K.
    Buffalo, NY · Member since 2015 · 252 posts · 109 votes
    10y

    I actually came across a similar issue last week. Mid-40s guy, violently choked, punched, and dragged a woman in addition to stalking and harassment charges. House is in an A+ area, gorgeous, vacant, and I'd love to get my hands on and flip the house... I spent half a day trying to find next of kin or family members and I found them all...

    And then I thought... what if I end up actually getting this house and the guy gets out of jail and comes back for it? It's only a matter of time til he's out. With his history of aggravated violence and stalker tendencies, I decided to completely pass on the opportunity. Not only is the guy in jail for violence, but he must know his home is in default and getting foreclosed upon... I decided I don't want us to be the people there rehabbing it when he shows up! People are precious commodities, lol. Houses are aplenty...

    1Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    "My plan is to wholesale" so you have no property rights, just a contract.  If you were to buy, you could take possession as vacant, but that's not the case here.

    Walk away and don't 'grab the ears of the dog".

    0Reply
  • Kristin Whitaker
    OP
    Investor · Spokane, WA · Member since 2013 · 117 posts · 64 votes
    10y

    Great point @Shannon K..  People like that do tend to hold grudges..  and I DEFINITELY wouldn't want to pass this problem on to one of my buyers.  Thanks for making that point.

    0Reply
  • Cassie Sherie
    Seattle, WA · Member since 2016 · 81 posts · 43 votes
    10y

    @Kristin Whitaker do yourself a favor and move on to the next deal...No property is worth your safety, you can never be totally sure of what may happen when dealing with someone who has this kind of horrible track record with violence. It only takes a split second for your life to be taken or drastically changed. This violent lowlife has nothing to live for, no moral conduct, no integrity. You know the saying "better to be safe than sorry" listen to that. You also don't want to try and pass this nightmare on to someone else and compromise your reputation. 

    0Reply
  • Russell Naylor
    Colorado Springs, CO · Member since 2016 · 214 posts · 58 votes
    10y

    I'm gonna go with everyone else on this one and advise you to just pass and look for the next deal. No business is worth your safety or that kind of trouble. 

    0Reply
  • Kristin Whitaker
    OP
    Investor · Spokane, WA · Member since 2013 · 117 posts · 64 votes
    10y

    Really appreciate everybody taking the time to add some input.  Sometimes a little outside perspective can really ground you.  

    Moving on from this deal - the potential cost is too high.  Thanks again.

    1Reply
  • Account Closed
    Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Kristin Whitaker  First I should warn you.  I have been a bail bondsman.  Therefore, my tolerance of violent felons with guns might be a little higher than some people's.

    If I was going to deal with this property I would use a front company.  One that would make it very difficult to figure out who I am.

    Then I would have a lawyer deal with the eviction process.

    That would solve most of the safety problem.

    The issue about "squatters" on the other hand could be more complex.  Good luck getting the 92 year old father evicted without getting someone like adult protective services called.  Make sure you will really be able to get clear title before you do anything else.

    2Reply
  • Rick H.
    Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
    10y

    Weenies want weak-willed work!

    If you know and follow the basics (keep your personal name, face and home address out of the deal) you can benefit and learn a lot.

    Push all other risk into seller. 

    I'm not sure that this is a wholesale deal as the primary value that you add is selling with possession. Or, your end buyer has skills in hard-to-evict interlopers and pays you, in part now and part later, depending on difficulty of gaining possession. 

    Every felon has difficulty in being honest with themselves and others and therefore is, to some extent, delusional. And most of their actions fear based (paranoia). 

    Your end buyer can have adult protective services involved, who will contact police or sheriff, during the eviction process to "expedite" and use OPM (Other People's Muscle).

    I love thus business!

    4Reply
  • Dean Weltman
    Investor · The Colony, TX · Member since 2014 · 192 posts · 66 votes
    10y

    I agree with @Michael Biggs. My tolerance for violent @ssh*les is pretty high, I figure anyone I'm evicting probably has those tendencies. And the gun... Well, maybe because I'm from the great State of Texas, I just figure everyone has one. 

    So, I wouldn't pass, but I would use other people to do the dirty work, ie. have the constable do the eviction, etc. Odds are he isn't coming back. They know they aren't supposed to be there and are waiting for someone to have the balls (or a strong uterus) to kick them out. But they'll take advantage as long as possible. 

    Point two, most importantly, everyone is responsible for their personal safety, and most do what makes them feel safe, but ALWAYS be ready for the worst, always have a plan to get away or to stop (sometimes permanently) the other person. Remember, ultimately, the cops aren't responsible for your safety, you are. The cops generally take the report for the stupid things we do. /rant over

    0Reply
  • Dean Weltman
    Investor · The Colony, TX · Member since 2014 · 192 posts · 66 votes
    10y
    Originally posted by @Dean Weltman:

    I agree with @Michael Biggs. My tolerance for violent @ssh*les is pretty high, I figure anyone I'm evicting probably has those tendencies. And the gun... Well, maybe because I'm from the great State of Texas, I just figure everyone has one. 

    So, I wouldn't pass, but I would use other people to do the dirty work, ie. have the constable do the eviction, etc. Odds are he isn't coming back. They know they aren't supposed to be there and are waiting for someone to have the balls (or a strong uterus) to kick them out. But they'll take advantage as long as possible. 

    Point two, most importantly, everyone is responsible for their personal safety, and most do what makes them feel safe, but ALWAYS be ready for the worst, always have a plan to get away or to stop (sometimes permanently) the other person. Remember, ultimately, the cops aren't responsible for your safety, you are. The cops generally take the report for the stupid things we do. /rant over

     And @Rick H.

    0Reply
  • Jason V.
    Investor · Rochester, NY · Member since 2016 · 477 posts · 426 votes
    10y

    I'm with Mike, Rick and Dean on this one (but I can kind of understand everyone else's reluctance.) 

    Y'all just gotta up your body armor and weapons budgets - bunch of sissy A and B class investors :-P

    0Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    10y

    I have no issue with buying and having the guy kicked out, like it was said above use a front corporation.  The value add is getting folks evicted so the property is empty.  If you can only do a wholesale your pool will be more limited to investors who are used to dealing with things like this, such as retired law officers, or like some of the responders to this thread.

    3Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    10y

    Thought your co-wholesaler was a violent felon!  Is this rural, like out in Sprague rural? Or in Spokane still @Kristin Whitaker?

    I ask because I have dealt with rural stuff and the market and margins were skinny.  Hardly worth fooling with this kind of sludge.  If there is good potential, I like the ideas of the 'get some' guys above.  Don't think I'd do this as my first.  Have you done a few wholesales already?  Thanks for the colorful discussion!

    2Reply
  • David Clinton III
    Real Estate Coach · Coeur D Alene, ID · Member since 2013 · 458 posts · 295 votes
    10y

    I echo the questions Steve Vaughan has... it may be worth it if the numbers are there, but if it's Malden or Sprague, that's a different story.

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    I will add just a bit to what has already been said.

    It's not as easy as one might think to hide who is involved in a RE transaction.

    You will need a mailing address of record for where your property tax bill goes, even if you only own the place for a day or less.

    It's not super hard for a marginally resourceful person to figure out what else goes to that PO Box, and who ultimately owns that PO Box. 

    Example: I've got a guy looking to buy a bunch of drug labs and grow houses in Oakland because I was able to dig through public records, through all the LLCs and fronts, and find the actual home address of the actual owner (not the owner of public record, the actual owner of the drug empire), who lives a few miles from a well known Bay Area university that you have heard of (where he is obviously selling his product). 

    And I'm not even a PI or law enforcement. And you aren't even a drug kingpin. What sneaky skills do you have that a drug kingpin lacks, that you're certain will ensure that the violent scum-bag wont be able to find you? 

    @Kristin Whitaker

    (What's in it for me is that obviously I'm doing the cash-out refinances once my dude guts all the drug crap from any/all of these homes he acquires. My client in this case happens to be a formerly violent felon; I do not believe in credit discrimination against the formerly incarcerated. These homes currently trash neighborhood homes values in my market, so IDGAF about the drug guy and want him out of my market.)

    0Reply
  • Mary B.
    Real Estate Investor · Lansdowne, PA · Member since 2013 · 1k+ posts · 656 votes
    10y
    Originally posted by @Kristin Whitaker:

    Hello all,

    Searched the forums with quite a few different keywords but didn't find any discussions similar to this.

    I've come across a deal on a rural property, numbers are great.  Not a bad area, probably B-.  Just rural.  Homes selling on the high end for the region.

    The owner wants to get rid of the property because he's let his sister live there who is married to a violent criminal with 17 assaults on his record.  Last time owner was at the property, husband answered the door with a gun to his face. 

    So needless to say, I will not be touring the house or property.  Number is low enough that I don't feel like I have to anyway.

    There is no written lease in place.  Owner says they are "squatting."  92-year old father is also there "squatting."  

    My plan is to wholesale, but I can't really show any potential buyers inside.  I don't really want to pass this problem of a violent (and now even more pissed off) criminal on to any of my buyers either.

    What would you do?

    Pass on the deal?  Tell the owner to get rid of them THEN we can make a deal?  Go ahead and get it under contract and try to find a buyer anyway?  And the elderly father issue - kinda feel terrible about possibly kicking him out of his home at 92 years old..   

    Gut tells me to walk away but I know there's a way to do this and make (almost) everyone happy.

    Thanks for any insight!

    Kristin

    So where is the deal here? Generally I wouldn't deter anyone from putting forth effort even on complex situations if there is a chance to get the deal done but again....where is the  deal here? 

    If it were a situation where the tenants were all about to be forced out within a day or so...but unless the numbers are stupendously in the cash buyers favor and the owner was doing his damnedest in  getting them out (which he seemingly has run out of wind) I can't even see many r.e. agents wanting a piece of this crazy action. Now, if you have one of those off-world wacky investors in your arsenal then by all means go for it. I've seen threads on BP of investors knowingly buying meth lab houses with skinhead  & junky tenants still living there and whatnot so its not utterly impossible.  The crucially key factors to make this work in your favor here are the numbers have to be superb and the off-world investor has to be easily within reach for you. Otherwise I'd go with the masses to walk / run away from this. My coin.

    Kudos,

    Mary

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    You should pass, I would go for it assuming the deal was worth my time. I don't have a issue dealing with the tenants it is more a matter of time. I would offer considerably less than the asking and would purchase the property to make handling the tenants easier.

    0Reply
  • Justin Ho
    Real Estate Agent · San Francisco, CA · Member since 2016 · 11 posts · 4 votes
    10y
    Violence and squatting is a problem for sheriffs but can you effectively wholesale this if you haven't seen the extent of damages on the inside of the home? Is it possible to have this cheap enough where it isn't an issue? Serious asking btw I can't help but imagine what pissed off squatters can do to in a house for long periods of time. Cement and plumbing for one
    2Reply
  • Meghan O'Connor
    Carmel, CA · Member since 2015 · 47 posts · 15 votes
    10y

    Very good point Justin.  I am dealing with squatters right now...granted, not violent felons... But dirtbags nonetheless.  I thought about how they might react on coming to the realization that they'd finally have to move on...how qmuch might they try to damage my seller's home...a lot?? Not at all???   I walked thru with my broker and GC the other day and took tons of pix...I don't know all the existing laws protecting owners in case a tenant decides to physically retaliate by damaging the property.. Sadly, it seems to me that laws tend to lean toward protecting the squatters (Granted, I've had limited experience with this!  Thankfully).  Just something to think about.  Good discussion btw

    0Reply
  • Account Closed
    Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Chris Mason  If you pay lawyers, it is fairly easy to hide ownership of companies.  Probably the best way to do it is with foreign trusts.  Even a domestic trust can do a fairly good job of it.  You mentioned mail delivery.  There are companies that do nothing but house trusts.  They will trash or forward mail for a fee.

    0Reply
  • Kristin Whitaker
    OP
    Investor · Spokane, WA · Member since 2013 · 117 posts · 64 votes
    10y

    @Steve Vaughan, Spokane county.  Plenty of meat in the deal, otherwise I wouldn't have thought twice.

    I usually keep deals to rehab, occasionally wholesale if a property doesn't fit my needs.  This would have been a wholesale for several reasons (my funds are tied up / could go commercial and might hold more appeal more to some buyers / obvious criminal issues).  Not as experienced with wholesale, so a bit hesitant to dump this problem on someone else.

    I don't like the "hide your identity" program as I'm up front and honest with sellers, maybe sometimes too much.  Trust is key, so...

    Price is low enough that it doesn't matter if the house is a teardown @Justin Ho.  Like I said, I would have not given it a second thought if there wasn't serious meat in the deal.

    @Mary B. looks like I may have found that crazy guy in @Gerrit Harner.  Check your PMs Gerrit!

    Again, thanks all for your input and a lively discussion.  

    @Justin Ho

    0Reply
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