I Exposed a Real Estate Scammer in Real Life

today I'm going to show you what I consider to be an unethical wholesaler and how that unethical wholesaler tried to screw somebody who is now a client of mine they'll be a surprising plot twist but first let me just quickly mention I'll be in New York next for the I'm over it tour so make sure to see me for some awesome in-person mentoring and no there won't be any up sales it is not like a sales webinar it is seriously one-on-one small group understanding and investing in real estate now just so you know I'm a licensed real estate broker I've been doing this for over ten years and I've dealt with wholesalers pretty much my entire career and if you don't know what wholesaling is let me just give you a quick little overview of what wholesaling is the ideal scenario of wholesaling is somebody comes in and let's say they buy a house or get a contract for a house of let's say $450,000 and the house is actually gonna be worth $600,000 after it has some improvements done to it well now the wholesaler might be able to try to mark at that $450,000 contract sell it to somebody for let's say five hundred thousand dollars and pocket the difference as what's called an assignment fee that might be fifty thousand dollars now there's nothing inherently wrong with that usually the wholesalers pitch hey well you know what you know you don't have to deal with anything we'll take all the trash out of the property for you we'll clear it out you don't have to worry about Realtors or open houses or showings or whatever I mean quite frankly the wholesalers regular argument is correct who wants to go through a house that's full of this kind of crap now in general there's nothing really wrong with this style of wholesaling however the way this deal corrupted we'll show you the example of an unethical version of wholesaling in my opinion and then what I did to actually end up with a little bit of a plot twist so stay tuned when I first walked through this property it was on the market for five hundred and nine thousand dollars and I thought it was a good deal while I was here I actually ended up making a video about asbestos acoustic ceilings which is still up you could check that out but I decided to pass on the deal in fact not only did I decide to pass on the deal but I posted on Instagram that I was passing on the deal because I thought it'd be too expensive to fix up know a few days after I passed on the deal I ended up getting a text message please call me I'm the actual owner of the property address call from this number only or I probably will not answer okay well usually stuff like that I don't respond to because it's like this seems like shady or weird or whatever but I thought ah let me just go ahead and call them on the phone with them long story short I end up at his house and we're talking about what's happening regarding this deal he showed me a contract from rbp Inc which if you google them apparently they sell like educational products on real estate and turnkey real estate investing services which yeah look I might sell a real estate investing course that's really awesome and gives you all of my experience from last ten years in the business and a real estate agent course but I don't offer to invest your money and I don't upsell you I try to keep things very straight and I help you out as much as I can especially in our private live streams but this seemed to be next level where they were actually working with people to try to find wholesale deals and sign up people into contracts and then turn around and flip them to other investors what was really interesting and kind of shady about the contract was that the contract itself was a $450,000 two-page contract that allowed the wholesaler to have the property locked up and allowed them to hire an agent to put it on the Multiple Listing Service to sell it to somebody else and I'm like wait a minute that's really shady like if they're gonna put it on the Multiple Listing Service why wouldn't they put it on the Multiple Listing Service and just give you whatever extra money you get because the bottom line is even though houses look like this you get cash buyers all day long from the MLS I mean I'm an investor I came to the deal because it was on the MLS I didn't care that all this junk was here now while inherently that looks kind of shady and weird and possibly unethical let's just say fair game you know what they want to bluntly wholesale it and basically lock it up under a $450,000 contract and then sell it to somebody like me looking at it for 495 whatever they want to do it go for it but that's also not exactly what happened see when I was meeting with the seller by the way offered me not only all the contracts and the documentation and showed me the lockbox that he sawed off that the agents put on this property without his permission but then he told me that the wholesalers actually demanded after seven days that the seller drop his price and the agreed-upon offer by another $100,000 so that they could buy this house for 350 grand so here they are on one hand trying to get it for 350 grand renege on the price and the original deal on the other hand the agents that listed this property working for this wholesaler are indicating that they have multiple offers at 480 490 500 whatever around that range and they're looking for a really quick clothes a really quick clothes is super important to make this deal happen because that is a very classic wholesaler move if you can close to escrow at the same time boom you never had to own the property and all you get is your assignment fee profit cool right now when the seller found out this was happening that's when he cut off the lockbox but what he also did is what really any potential seller of an as is fixer-upper property should do he contacted as many Realtors as he could to try to find out what the fair market value of the property would be I was the fourth broker he spoke with and he only spoke with me because people saw my car outside and sent him a picture going oh who's that realtor over at your house that's why he ended up calling me the advice he got was that even in the as is condition the house was in he would be able to sell it as is probably for $499,000 no problem and that's kind of consistent with what was happening when it was on the market when I sat down with him I took it a step further and said look we can sell it as is for $4.99 maybe we'll get more maybe we'll get a little less or you could give me twenty to twenty five thousand dollars I'll spend it all renovating the property at no cost to you and then we'll put it on the market for say 540 or 550 you'll pocket the difference which is probably a two to one difference that is making twice than when he put into it and he could benefit from that and then our conversation evolved after I gave him all of these options and he suggested well Kevin why don't you just buy it I don't really care if somebody gets a good deal on it and I thought oh that's kind of cool that's awesome sure I'll buy it but what's different about what I did and what the other wholesaler did in my opinion it's an ethical version versus an unethical version that is let me put all the cards on the tape you could sell this house as is the way it is on the MLS we could do some work to it I can help you make it happen if you want we could also buy it as this so what did we do we ended up getting this house under contract now we've got the keys and we're already working on getting bids and all the work that we need to do to it for $450,000 no costs to the seller removed all contingencies and gave him a $20,000 non-refundable deposit to show that we're serious and we're not coming back asking for a bunch of repairs later that is when he shook my hand offered me a drink and said thank you you're the kind of person I want to do business with let me just be really clear here I'm totally for wholesaling if it's done in my opinion in a fair way I'm just sick and tired of seeing people get screwed by wholesalers that come in and they say one thing they say things oh the MLS is bad realtors are bad don't put it on the market and then they turn around and put it on the market and do literally what they say was bad and then they pocket the difference to me that's a scam to me it's a scam to go in and say let's do a deal at 450 and then after you secure some buyers you grind off a hundred thousand dollars I mean look that kind of stuff is done all the time maybe that's not really a scam to renegotiate after you find some repairs or whatever but come on most of these people they come off and they say things like oh yeah yeah we'll buy it as is we'll buy it as is they get the deal under contract and then they grind and grind and grind the seller down to try to get the deal closed and take money from people I'm not a fan of that kind of negotiating I'm not a fan of that kind of wholesaling if I can go to somebody and say look we can put it on the market for this price I could even fix it up for you and we could put it on the market and make you more money or you know what if you want the other option which is somebody just buys it as is the way I'm going to do it is not only I'm gonna offer you that bottom line number that I told you you'd get but I'll also give you a non-refundable deposit and no cancellation rights because I'm not a fan of screwing people and saying 21 days or 30 days later yeah sorry couldn't find anyone deals not working good luck with your property you just let sit vacant for 30 days and decay more oh sorry yeah repairs came up I might be an experienced investor but I had no idea it had asbestos stocks oh my gosh what a surprise this is so terrible come on it's such baloney so whole sellers don't take offence if anything you should just like anybody else interested in making money in real estate come to one of the 13 locations I'm going to be at over the next 13 months teaching you about real estate investing in person I'll help you with wholesaling I'll even help you set up a wholesaling business the way I would do it if I wasn't a licensed real estate agent I'll talk to you about anything you want to know small group and after these 13 locations I'm taking a vacation [Music] [Music]

Channel: Meet Kevin

Views: 404,385

Keywords: real estate, real estate investing, investing in real estate, beginner real estate, finance, real estate scammer, real estate wholesaler, wholesaling real estate, real estate wholesaler scam

Id: AYKlj_DIg-Q

Length: 10min 3sec (603 seconds)

Published: Sun May 12 2019