On today’s show we’re talking about doing business with people who are not real.
We had a recent interaction with a seller who turned out to be a liar. Sadly, these situations exist with alarming regularity. The property in question was based in Houston. Since we are in Texas, we will call the Seller Bubba.
I’m instantly suspicious when someone is using a gmail address or a Hotmail address. When that happens, it suggests that the person is not really serious about being in business. They can’t afford the $6 a month to go out and get a properly hosted email address with their own internet domain.
When we arranged a site visit, he refused to give us the address and decided to cancel the meeting and meet the seller himself without us. It’s clear that he doesn’t have the ability to close on the purchase.
So we conducted the most basic of due diligence on the internet. The wholesaler had no website. They had a linkedin profile and an Instagram account.
The only indication that this wholesaler was involved in real estate was a single video on his Instagram account.
Well the information in the Instagram video did not match what we were told in person. It turns out that the property doesn’t have direct access onto a public right of way. It would require an easement from the church next door, or access through another property that the seller owns.
The wholesaler went on to brag about how he was going to wholesale this property and earn a six figure income for flipping the contract to a buyer. Then he also went on to say more about the buyer. He described the buyer as an 88 year old man who owned a lot of real estate, restaurants, apartments, and that frankly he was a tired landlord.
The best part was that he was expecting to get the property locked up under contract very soon.
But wait a minute, he had just told us before he recorded the video that he had the property under contract.
When we confronted him about cancelling the site visit with our team, he proceeded to blame our team for not being trustworthy. He attacked our team members character.
I wish we could do more to protect hard working people from these kind of business predators.
I actually have no problem with working with professional wholesalers. The emphasis is on the word professional. They can be a source of great deals. I’ve bought two deals in the past year from wholesalers, and they have been rewarded handsomely.
Fakes show up in all industries, and I suppose real estate is not immune. When you perform due diligence, make sure you perform due diligence on the people who make representations. You never know what you might find.