Recent Assignment Contract Bust

Fort Wayne, IN · Member since 2010 · 6 posts · 0 votes

I live in Fort Wayne Indiana. Just last year J. T. Radebaugh was charged and jailed for assigning contracts on real estate properties. He made around 800K in 2 years. The local Attorney General filed charges saying that because he didn't have a realtors or brokerage license he couldn't collect fees such as his "assigment fee". That is how the paper described it. They went on to say that he was negotiating a price with the home seller and marking it up to a "cash" buyer and collecting an assigment fee. This sounds an awful lot like what I have been working to do for the past couple months.

Anyone out there have any insight? I would like to think that double closing would eliminate this argument becuase I would essentially take ownership of title and then simply sell again. This can't be any different from buying it myself and selling it a month later in the eyes of the law. Any thoughts. If you want to read the article look up his name on the Journal Gazette of Fort Wayne, IN.

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Ryan Webber

Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes

15y

Here's what I could dig up.

http://www.fortwayne.com/apps/pbcs.dll/article?AID=/JG/20070928/LOCAL/709280322

http://www.journalgazette.net/apps/pbcs.dll/article?AID=/20080314/LOCAL/803140324/0/LOCAL07

Pages 7-9 http://www.in.gov/dlgf/files/ALLEN_2009_NARRATIVE.pdf

There is definitely more to the story here. It would seem to me that the State of Indiana DID use the fact that he was using an option contract and then assigning the properties rather than being in the chain of title to prosecute him. Now the reason WHY they decided to prosecute was not because he was assigning properties but because his Ponzy scheme was collapsing. He made up to double the purchase price selling the properties on allegedly inflated appraisals (the appraisers had their licenses suspended) to investors that he would then buy the properties back from on land contracts and then rent them out at rents that would not cover the mortgage payments. He stopped paying the investors and they went to the attorney general.

The Indiana attorney general's office stated

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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
I am looking into getting started with wholesaling in Indiana is it illeagal or not?
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Ibrahim Hughes
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
15y
Originally posted by Tyler Carpenter:
According to the Illinois Real Estate Act of 2000, if you sell or are involved in a real estate deal for COMPENSATION then you must have a real estate license.

I would have to read the exact wording of that law to believe that selling a contract (not a property) requires a license. Does anyone have it?

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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
I am not to far from Fort wayne just wondering if I am allowed to assign contracts??
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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by Ibrahim S:
Originally posted by Tyler Carpenter:
According to the Illinois Real Estate Act of 2000, if you sell or are involved in a real estate deal for COMPENSATION then you must have a real estate license.

I would have to read the exact wording of that law to believe that selling a contract (not a property) requires a license. Does anyone have it?

Information Maintained by the Office of Code Revision Indiana Legislative Services Agency
IC 32-17
ARTICLE 17. INTERESTS IN PROPERTY

IC 32-17-1
Chapter 1. Fee Simple Interest

IC 32-17-1-1
"Grantor"
Sec. 1. As used in this chapter, "grantor" means every person by whom an estate or interest in land is:
(1) created;
(2) granted;
(3) bargained;
(4) sold;
(5) conveyed;
(6) transferred; or
(7) assigned.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-2
Fee simple conveyance
Sec. 2. (a) A conveyance of land that is:
(1) worded in substance as "A.B. conveys and warrants to C.D." (insert a description of the premises) "for the sum of" (insert the consideration); and
(2) dated and signed, sealed, and acknowledged by the grantor;
is a conveyance in fee simple to the grantee and the grantee's heirs and assigns with a covenant as described in subsection (b).
(b) A conveyance in fee simple under subsection (a) includes a covenant from the grantor for the grantor and the grantor's heirs and personal representatives that the grantor:
(1) is lawfully seized of the premises;
(2) has good right to convey the premises;
(3) guarantees the quiet possession of the premises;
(4) guarantees that the premises are free from all encumbrances; and
(5) will warrant and defend the title to the premises against all lawful claims.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-3
Estates tail; abolition
Sec. 3. (a) Estates tail are abolished.
(b) An estate that under common law is a fee tail:
(1) is considered a fee simple; and
(2) if the estate is not limited by a valid remainder, is considered a fee simple absolute.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-4

--------------------------------------------------------------------------------
Lineal and collateral warranties; abolition
Sec. 4. Lineal and collateral warranties with all their incidents are abolished. However, the heirs and devisees of a person who has made a covenant or agreement is answerable upon that covenant or agreement:
(1) to the extent of property descended or devised to the heirs and devisees; and
(2) in the manner prescribed by law.
As added by P.L.2-2002, SEC.2.

--------------------------------------------------------------------------------

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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by mzlady:
Originally posted by Ibrahim S:
Originally posted by Tyler Carpenter:
According to the Illinois Real Estate Act of 2000, if you sell or are involved in a real estate deal for COMPENSATION then you must have a real estate license.

I would have to read the exact wording of that law to believe that selling a contract (not a property) requires a license. Does anyone have it?

Information Maintained by the Office of Code Revision Indiana Legislative Services Agency
IC 32-17
ARTICLE 17. INTERESTS IN PROPERTY

IC 32-17-1
Chapter 1. Fee Simple Interest

IC 32-17-1-1
"Grantor"
Sec. 1. As used in this chapter, "grantor" means every person by whom an estate or interest in land is:
(1) created;
(2) granted;
(3) bargained;
(4) sold;
(5) conveyed;
(6) transferred; or
(7) assigned.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-2
Fee simple conveyance
Sec. 2. (a) A conveyance of land that is:
(1) worded in substance as "A.B. conveys and warrants to C.D." (insert a description of the premises) "for the sum of" (insert the consideration); and
(2) dated and signed, sealed, and acknowledged by the grantor;
is a conveyance in fee simple to the grantee and the grantee's heirs and assigns with a covenant as described in subsection (b).
(b) A conveyance in fee simple under subsection (a) includes a covenant from the grantor for the grantor and the grantor's heirs and personal representatives that the grantor:
(1) is lawfully seized of the premises;
(2) has good right to convey the premises;
(3) guarantees the quiet possession of the premises;
(4) guarantees that the premises are free from all encumbrances; and
(5) will warrant and defend the title to the premises against all lawful claims.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-3
Estates tail; abolition
Sec. 3. (a) Estates tail are abolished.
(b) An estate that under common law is a fee tail:
(1) is considered a fee simple; and
(2) if the estate is not limited by a valid remainder, is considered a fee simple absolute.
As added by P.L.2-2002, SEC.2.

IC 32-17-1-4

--------------------------------------------------------------------------------
Lineal and collateral warranties; abolition
Sec. 4. Lineal and collateral warranties with all their incidents are abolished. However, the heirs and devisees of a person who has made a covenant or agreement is answerable upon that covenant or agreement:
(1) to the extent of property descended or devised to the heirs and devisees; and
(2) in the manner prescribed by law.
As added by P.L.2-2002, SEC.2.

--------------------------------------------------------------------------------

This is what I found after calling The Indiana Attoruney Generals Office in Indianapolis, Indiana They directed to the Codes of Indiana Simple fee..Can someone translate this for me ??
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Eric M.
Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
15y
An attorney is who should be translating statutes for you.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
15y
You also have to look at wholesaling differently for residential and commercial transactions.

Federal and state laws have conditions applied to residential that do not apply to commercial transactions.

So you have to know what you are targeting and what the rules are.
Podcast Guest on Show #47
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Curtis Gabhart
Real Estate Broker · San Diego, CA · Member since 2009 · 119 posts · 54 votes
15y
or god forbid you just get your real estate license which will
1 - probably make you much more money than wholesaling. Think about it, you only really make money if you find a steal or 1 in 20 deals. What about the other 19 deals you have to pass up that you could make 3-6% on (usually more than wholesaling). On top of that you actually have a pretty good contract that protects you from jack holes going around you
2 - you will actually learn something. Getting a license isn't always about getting commissions. It's amazing at the tens of thousands of dollars people pay these so called gurus who sometimes teach them pie in the sky dreams but don't really teach them the fundamentals of a transaction like how does title & escrow work. How to write up a contract etc.

It may be total nonsense to you are may make some sense but getting a license for me was the best thing I ever did for my investing career.
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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by Curtis Gabhart:
or god forbid you just get your real estate license which will
1 - probably make you much more money than wholesaling. Think about it, you only really make money if you find a steal or 1 in 20 deals. What about the other 19 deals you have to pass up that you could make 3-6% on (usually more than wholesaling). On top of that you actually have a pretty good contract that protects you from jack holes going around you
2 - you will actually learn something. Getting a license isn't always about getting commissions. It's amazing at the tens of thousands of dollars people pay these so called gurus who sometimes teach them pie in the sky dreams but don't really teach them the fundamentals of a transaction like how does title & escrow work. How to write up a contract etc.
I wrote an article a ways back about the benefits of getting your license [url]http://gabhartinvestments.com/articles/printing-money-with-a-real-estate-brokerage-license/

It may be total nonsense to you are may make some sense but getting a license for me was the best thing I ever did for my investing career.

Mr. Gabhart
I understend where you are coming from..and I'm not here to debate weither I should get my Real Estate License or not, My fiance has his license and he is contracted under one of the most well-known brokers in my area, and him among other Realtor's have been suffering behind this situation with the Real estate plunges. I am only trying to figure out away to make end meet w/ out having to pay a broker for brand, I am trying to establish my own brand, and I want to do it the right way. ATLEAST I am on here asking and not assuming that wholesaling is legal. And I have "learned something" I graduate in February of this coming new year with not one but two Bachelor's degree's in Business Adminstration & Human Resource. I am just trying to get some input from other people who are doing what I want to do. I appreciate the advice but you still did not answer my question! :roll:
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Curtis Gabhart
Real Estate Broker · San Diego, CA · Member since 2009 · 119 posts · 54 votes
15y
MZ

I think that came off wrong. Their was no disrespect intended and sorry if that is how it sounded.

If you fiance has his license that's great and probably a good way to get the best of both worlds. The reason I say people who wholesale should get their license is I get calls from them almost every day trying to sell me deal that I usually already knew about and passed.

What I realize is even when they have these deals under contract many can't close and unless they have a lot of control and trust with the people they are sending deals to it is very easy to get screwed out of your fees.

I think having your license helps protect you and also gives you access to a lot of information you otherwise usually don't have.

I can't answer your question about the state law or interpretation but i am sure someone else can. It sounds like you are definitely in the right direction and will do well.

Good luck

Curtis
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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by Curtis Gabhart:
MZ
I think that came off wrong. Their was no disrespect intended and sorry if that is how it sounded.

If you fiance has his license that's great and probably a good way to get the best of both worlds. The reason I say people who wholesale should get their license is I get calls from them almost every day trying to sell me deal that I usually already knew about and passed.

What I realize is even when they have these deals under contract many can't close and unless they have a lot of control and trust with the people they are sending deals to it is very easy to get screwed out of your fees.

I think having your license helps protect you and also gives you access to a lot of information you otherwise usually don't have.

I can't answer your question about the state law or interpretation but i am sure someone else can. It sounds like you are definitely in the right direction and will do well.

Good luck

Curtis

I knew you looked like a really nice guy :wink: and your are nice! I apologize if I was a little forward...I appreciate the feed back and thanks again for the advice have a good evening. mzlady
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Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by Ryan Webber:
Originally posted by CHAMPAK SHAH:
I believe " Assignmenet of Contract " is fine as long as all parties involved are informed.

You believe this exactly why? Did you read the articles I posted? Jeff Radabaugh was using "Assigments of Contract" and he now owes almost $1 million in judgments. His buyers would have been signing an assignment which would have clearly informed the buyer of his fee. It would have also been on the HUD-1. This is NOT about disclosure.

Originally posted by CHAMPAK SHAH:
I disagree with Johnny's comment --yes people do make and can make over $400,000 in one year -actually in three months --as a wholesaler --if you have cash and concentrate on upscale homes --over $500,000 ---your spread - fee is much higher--

The only people you will ever hear about making anything close to that kind of money in wholesaling are gurus, and gurus say they make that much so you'll buy their product. I've actually never even seen a guru claim that they've even made that much profit. And upscale homes in this market? That's the hardest hit market in the country. I think you should get your money back, Champak. Somebody sold you a bill of goods.

Originally posted by CHAMPAK SHAH:
I am planning to get into whoelsalling this--if any one intereste d- just saw a house -previously valued at $330,000 --is now on auction with minimum bid of $70,000 ---nice to have at $100,000 and Resell for $150,000.

You haven't even done a wholesale deal and you are on here telling people what they should and shouldn't do and what they can and can't do? WHAT?!?! Really, Champak, you should try talking less and listening more.

Originally posted by CHAMPAK SHAH:
Always check with local realtor, RE Attorney and Specifically Hard Money Lender about Assignment VS Double Closing --now some people use the term - Back to Back closing --

Ahh, no. In the case of doing assignments in Indiana, check with a qualified real estate attorney. I would actually ask them specifically about this case, and see what they have to say about it. Asking a realtor about anything but comps is a mistake. They won't even know what an assignment or double closing is. And hard money lenders? I'm not sure why you would ask them about whether you should assign or double close.

In every state other than Indiana, I would recommend assigning unless you are going to show a large profit, and then I would recommend double closing. REO's and short sales you have to double close, so those are a different category.

The bottom line being that if you are wholesaling in Indiana, you need to seek competent legal advice about doing assignments solely because of this specific case.

Also I talked with the Indiana Attorney General's Office and they wouldn't give me any straight answers on the issue (which I kind of expected) but they did send me over the official complaint, judgment, and punishment. The woman I talked to said that she didn't know of any other cases since or pending that are relevant to assignments but she said that she is unable to verify completely that there aren't any others.

If anybody is interested, message me and I'll send you the file the Attorney General's office sent me.

I would like a copy please.
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Jon Frame
Investor · Lehigh Valley, PA · Member since 2008 · 97 posts · 38 votes
15y
Originally posted by Curtis Gabhart:
or god forbid you just get your real estate license which will
1 - probably make you much more money than wholesaling. Think about it, you only really make money if you find a steal or 1 in 20 deals. What about the other 19 deals you have to pass up that you could make 3-6% on (usually more than wholesaling). On top of that you actually have a pretty good contract that protects you from jack holes going around you
2 - you will actually learn something. Getting a license isn't always about getting commissions. It's amazing at the tens of thousands of dollars people pay these so called gurus who sometimes teach them pie in the sky dreams but don't really teach them the fundamentals of a transaction like how does title & escrow work. How to write up a contract etc.
It may be total nonsense to you are may make some sense but getting a license for me was the best thing I ever did for my investing career.

After 3 years of wholesaling I did get my Real Estate license. So far, wholesaling has been much better but it is nice to have a license as well. I deal with properties that are usually under 30k. If I sell a house as a licensed Realtor , say for $25k, I would make a lousy $800 after my commission split with my broker...... 3-6% ????? Myself and most Realtor's will make 1.5%.......

Wholesaling.....I can make an average of 5k selling the same deal and maybe more.
Also, working with an investor and showing properties blindly with my License, I've worked with people for a couple months only to make a very small commission. When I have an assignment I can sell 3 out of 5 people and do a LOT less work. My wholesale deals come complete with a contractor ready to go, Property manager, and I can manage the rehab as well. The number's are solid and they've already been negotiated !!!

I know this thread went off track a bit so I will add that my Real Estate lawyer does the settlement's so yes, they are legal where I come from.
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Jimmy C.
Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes
15y
I come from the land of gurus. If wholesaling were illegal here, the prison would be even fuller than it already is.
2 Reply
Ryan Webber
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
15y
Originally posted by mzlady:

I would like a copy please.

Sorry after a month of no requests I threw it away. Contact the Attorney General of Indiana for a copy.

Most state's real estate licensing laws specify that it's illegal to buy or sell real estate without a license, and then down the page a little it specifies the exceptions to that rule. Owning the property is always one of the exceptions. The issue is whether having an interest in the property through a contract qualifies under whatever they term that ownership exception as.

I am NOT an attorney, but my understanding from different attorneys and from different cases that I've studied is that a valid contract does constitute an interest in a property, and that interest can be enforced in a court of law. That interest can also be assigned or sold. It is similar to having a lien on a property, and I can sell that lien or interest to someone if I want to and it does not fall under real estate licensing laws. That was my understanding and I was completely confident about it in all 50 states until I saw this case.

This is the very first case I've heard of where the point of prosecution was a wholesaler assigning contracts. The prosecution was asserting that he did not have an interest in the property, which to me, seems absurd. When I looked through the complaint it appeared to my untrained and non-attorney eyes that Jeff Raudabaugh did not seem to try and fight the prosecution in court. It appeared that he rolled over and just took whatever they wanted to stick him with, turning down an opportunity to even file a motion for a trial and instead immediately going to judgment. The outcome might have been different if he fought it harder. The whole ordeal came to light several years before and I would guess he was out of money and unable to afford adequate legal counsel.

Keep in mind that he had screwed a dozen investors out of almost a million dollars, too. That kind of thievery is going to strongly motivate the prosecution to find something to nail you to the wall with. I would guess that 100% of the prosecution's decision to try to nail him to the wall was because he was screwing people. They decided to try and nail him to the wall through this arguable semantic of contract law, and it worked.

I seriously doubt the Attorney General's office is going to start chasing down wholesalers in Indiana, BUT bottom line is that if you are wanting to wholesale in Indiana, you need to go talk to a qualified real estate attorney in Indiana about this specific case.
1 Reply
Scott Hubbard
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
15y
Originally posted by Curtis Gabhart:
or god forbid you just get your real estate license which will
1 - probably make you much more money than wholesaling. Think about it, you only really make money if you find a steal or 1 in 20 deals. What about the other 19 deals you have to pass up that you could make 3-6% on (usually more than wholesaling). On top of that you actually have a pretty good contract that protects you from jack holes going around you
2 - you will actually learn something. Getting a license isn't always about getting commissions. It's amazing at the tens of thousands of dollars people pay these so called gurus who sometimes teach them pie in the sky dreams but don't really teach them the fundamentals of a transaction like how does title & escrow work. How to write up a contract etc.
It may be total nonsense to you are may make some sense but getting a license for me was the best thing I ever did for my investing career.

Some states actually prohibit a REALTOR from participating in this type of scheme so a blanket statement advising people to get their real estate license in order to wholesale properties in poor advice.

In addition to states prohibiting such activity so do many broker's because E & O insurnace may not cover this type of activity which could leave the broker on the hook should something go bad.

Moreover, many agents who can legally participate in this activity are opening themselves up to more actionable litigation. A REALTOR takes an oath and is sworn to a higher ethical standard and if an agent screws up, it is much more likely they will be pursued than if an unlicensed investor makes the same mistake.

In addition to the above, not all wholesaler's stick to wholesaling. To some of us it is one of several exit strategies we employ. For me, it is the last option as I am also a buy and hold and a rehabber. By taking your advice, I would also be opening myself up to further acctions should I screw up in my other ventures.

Getting RE license is an option, but it certainly is not option for many investors....
1 Reply
Vonnetta R.
IN · Member since 2010 · 14 posts · 0 votes
15y
Originally posted by Ryan Webber:
Originally posted by mzlady:

I would like a copy please.

Sorry after a month of no requests I threw it away. Contact the Attorney General of Indiana for a copy.

Most state's real estate licensing laws specify that it's illegal to buy or sell real estate without a license, and then down the page a little it specifies the exceptions to that rule. Owning the property is always one of the exceptions. The issue is whether having an interest in the property through a contract qualifies under whatever they term that ownership exception as.

I am NOT an attorney, but my understanding from different attorneys and from different cases that I've studied is that a valid contract does constitute an interest in a property, and that interest can be enforced in a court of law. That interest can also be assigned or sold. It is similar to having a lien on a property, and I can sell that lien or interest to someone if I want to and it does not fall under real estate licensing laws. That was my understanding and I was completely confident about it in all 50 states until I saw this case.

This is the very first case I've heard of where the point of prosecution was a wholesaler assigning contracts. The prosecution was asserting that he did not have an interest in the property, which to me, seems absurd. When I looked through the complaint it appeared to my untrained and non-attorney eyes that Jeff Raudabaugh did not seem to try and fight the prosecution in court. It appeared that he rolled over and just took whatever they wanted to stick him with, turning down an opportunity to even file a motion for a trial and instead immediately going to judgment. The outcome might have been different if he fought it harder. The whole ordeal came to light several years before and I would guess he was out of money and unable to afford adequate legal counsel.

Keep in mind that he had screwed a dozen investors out of almost a million dollars, too. That kind of thievery is going to strongly motivate the prosecution to find something to nail you to the wall with. I would guess that 100% of the prosecution's decision to try to nail him to the wall was because he was screwing people. They decided to try and nail him to the wall through this arguable semantic of contract law, and it worked.

I seriously doubt the Attorney General's office is going to start chasing down wholesalers in Indiana, BUT bottom line is that if you are wanting to wholesale in Indiana, you need to go talk to a qualified real estate attorney in Indiana about this specific case.

Hi Ryan,
After much calling around and talking with Real estate attourneys in Fort Wayne I found out that Raudabaugh had assigned the contracts without having intrest in the properties which means he assigned an (option to Buy) which is not a purchase agreement which in return would of gave him equitable intrest in the properties, not only that but he was working with to city appraisers that were inflating the prices of the homes. He also had taken the properties back and nothing was noted at the accessors office for these transaction and thats how they were able to charge him with brokering without a license. Attourney Generals offices states that you can NOT assign a Real Estate without having intrest in the property, intrest would consist of a PURCHASE AGREEMENT between you and the homeowner.
0 Reply
Curtis Gabhart
Real Estate Broker · San Diego, CA · Member since 2009 · 119 posts · 54 votes
15y
Scott there is no absolute right or wrong answer. I have my license, used to be a commercial realtor but only buy and sell properties for my own investment groups.

I get SO many calls from people trying to wholesale deals who don't even understand the transactions or laws. Not getting your licensebecauseyou believe the extra liability is not worth it is really a silly argument to me.

Maybe you should re-evaluateyouractivities. Personally it has helped me out in many,many ways and has almost never held me back.

At one poit I thought about letting ot expire because I was concerned with the liability etc. Well I'm glad I didn't.

Even if you don't participate in acting As a realtor you should at least have the knowledge of being able to pass your state test.

All these bogus gurus talking about their real estate riches and asking people to sign up for expensive courses to teach them their proprietary (bs) methods of investing.

And then these poor people pay this money but don't even understand there states basic real estate law, don't even know how an escrow works or how to read a title policy.

On top of that they don't even know how to write a contract or even how to read one properly and know what it means.

I never ever represent myself on any transactions I buy but I am sure glad I have my license and learned the ropes being a realtor working with the type of Investors I wanted to emulate while making a LOT of money.

Anyways I really don't gave a dog in this fight just calling it like I see it. Should everyone get a license, no. Should 95% of the people who plan on treating this as a business and not a hobby and plan to make their living in real estate get one IMO yes.

Once again I will repeat if your not getting a license because you are afraid of the liability your probably shouldn't be doing what your doing anyways.
1 Reply
Curtis Gabhart
Real Estate Broker · San Diego, CA · Member since 2009 · 119 posts · 54 votes
15y
Btw Scott I see you offer "short sale services" according to our profile. Well hope your not doing it in California because you need a license to do that.
0 Reply
Ryan Webber
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
15y
Originally posted by mzlady:
Hi Ryan,
After much calling around and talking with Real estate attourneys in Fort Wayne I found out that Raudabaugh had assigned the contracts without having intrest in the properties which means he assigned an (option to Buy) which is not a purchase agreement which in return would of gave him equitable intrest in the properties, not only that but he was working with to city appraisers that were inflating the prices of the homes. He also had taken the properties back and nothing was noted at the accessors office for these transaction and thats how they were able to charge him with brokering without a license. Attourney Generals offices states that you can NOT assign a Real Estate without having intrest in the property, intrest would consist of a PURCHASE AGREEMENT between you and the homeowner.

So from what you're saying it seems the State of Indiana has determined that an "option" to buy does not constitute an interest in a property and selling that option can be construed as brokering. That's good information to have if you are wholesaling in Indiana. Again, always seek qualified legal counsel in your state.

0 Reply
C L.
near Philadelphia, PA · Member since 2011 · 78 posts · 33 votes
15y
Originally posted by Curtis Gabhart:
...... It's amazing at the tens of thousands of dollars people pay these so called gurus who sometimes teach them pie in the sky dreams but don't really teach them the fundamentals of a transaction like how does title & escrow work. How to write up a contract etc.

I agree Curtis. They're selling big pies in the sky with tons of missing critical details about legal, contracts, title, local regs, etc. I read all the time where the gurus advise people to almost jump out of bed and start being a real estate investor. Just "take action." they claim.

Many will take quick action and end up with nothing, if not a heap of trouble. Fooling around with people's homes can be dangerous for all sides when you don't know what the heck you're doing. It's not monopoly.

0 Reply
Juan Santiago
Elkhart, IN · Member since 2018 · 14 posts · 3 votes
8y
@Eugene Naroditskiy . Yes after reading all of it, that's exactly what he did. He optioned the properties and then assigned them without actually filling out a purchase contract with the seller. He was paying the buyers to sign the contract with the seller.

HEre's what it said in the document also...

"According to letters sent to a participant in some of the deals, Radabaugh is under investigation by the Indiana Attorney General‟s Office for practicing real estate without a license, though the office can neither confirm nor deny the investigation is taking place. "

"Indiana law only allows people to arrange sales of real estate if they are in the chain of ownership; the recorded documents do not show Radabaugh ever had any interest in the properties in question."
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