The Texas Flooding: 5 Scams For Homeowners to Avoid During Rebuilding


During this time of disaster and tragedy throughout Texas, I would like to send my condolences to the families who lost loved ones during the flooding. I would also like to warn my fellow investors to be advised of scams and scam artists who may be entering your market. Although I am not familiar with the Texas market, I am familiar with those who seek to take advantage of those in distress. In any major catastrophe, ill-intentioned opportunists see this as a time to make a quick buck and exploit homeowners.

If you are a Texas investor or any investor for that matter, during natural disasters you must be cautious of those looking to provide services and assistance in the name of charity and goodwill. I have not experienced anything like the flooding throughout Texas, but here are some of the following things to be aware of…

Out-of-State Contractors

Beware of out-of-state contractors. This is a major red flag. If there are numerous out-of-state contractors looking to assist in rebuilding your property, you will need to make sure you vet their credentials.

Related: My Property Fell Prey to a Craigslist Rental Scam: Here’s How I Handled It

You will need to find out if they are authorized to perform contactor services by cross referencing the company name with the BBB (Better Business Bureau). If there are any discrepancies, avoid contracting their services.

Door to Door Solicitors

Another scam that is often utilized during catastrophes is the door to door solicitors. Their pitch is simple and easy: “We are able to work with your insurance provider and are willing to make the needed repairs at a reduced cost due to the severity the of the natural disaster in the area.”

Always follow up with your insurance provider to ensure the company is authorized to provide services on your carrier’s behalf, and you can take it a step further by getting the name and license plate number of the solicitor. Again, ensure you vet the company with the BBB and also ask for references.

“Limited Time Only”

“One time only.” “Limited time only.”

If you hear these phrases, make sure you listen attentively. Also know that according the law in most states (not sure of Texas laws; this is not legal advice), you have the right to cancel a contract within a certain timeframe. So if the offer is too good to be true, then it might be. Make sure you read the fine print on the contract, and if you do still move forward, just know there are timeframes associated with any contract. Please remember: Don’t rush into anything!

Warranty for Service

If anyone is offering a warranty for service, please make sure you obtain the warranty in writing. Some people are very trusting and are willing to take a stranger’s word, but I advise you to have that uncomfortable moment and inform them that you need everything in writing. If you receive any push back from the service provider, utilize your insurance company as a scapegoat and inform them you are sure your insurance representative will need this information for the file.

Phony Insurance Company Offerings

Phony insurance company offerings were a scam that took place in the midwest during recent tornados. Not to say that this will occur in Texas, but it is always good to be aware. Phony insurance company reps may contact you to offer you new coverage in the wake of the tragedy. Obviously, this will occur sometime after clean up because no one will change coverage during a claim. However, the opportunity to offer you lower premium coverage for your existing coverage amount may sound like a great deal, but this is the lure.

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I recently read that the Houston Bar Association is willing to answer questions and provide legal advice over the phone regarding landlord/tenant laws. This is a valuable resource on how to conduct yourself as a landlord during these disastrous times.

Again, I pray that your properties, tenants and more importantly, your families are safe from harm.

Are you aware of any other scam that our Texas investors can be on the lookout for?

Please share! We are a community and we need to help our fellow community members.

About Author

Marcus Maloney

Marcus Maloney G+ is the Executive Officer of Equity Realty & Investments as well as 3rd Generation Management & Holding LLC, both are family owned and operated real estate investment firms. The firms' goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona and Chicago, Illinois. You can follow Marcus on Twitter

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