The Commercial Real Estate Professional Investors Group http://www.CREPIG.com, has become a great place to get Internet eyeballs on your deals. It is inevitable that two things may occur on CREPIG and many other places on the web. One is that a person with great integrity is working as an agent for someone that does not. I have found that many scams are perpetrated via very intelligent, but not necessarily savvy deal makers.
You should never pay an advance fee to secure a loan. Legitimate loans, like loans obtained through Lending Club, do not require an up-front payment. Here are tips from the Federal Trade Commission on how to avoid lending scams:
• Don’t pay for the promise of a loan. It’s illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver. Requiring advance fees for loans also is illegal in Canada
• Ignore any ad — or hang up on any caller — that guarantees a loan in exchange for a fee in advance. These are called Front Money Scams.
• Remember that legitimate lenders never guarantee or say that you will receive a loan before you apply, or before they have checked out your credit status or contacted your references, especially if you have bad credit or no credit record
• Don’t give your credit card, bank account, or Social Security number on the telephone, by fax, or via the Internet unless you are familiar with the company and know why the information is necessary
• Don’t make a payment to an individual for a loan; no legitimate lending organization would make such a request
• Don’t wire money or send money orders for a loan through Western Union or similar companies. You have little recourse if there’s a problem with a wire transaction. Legitimate lenders don’t pressure you to wire funds
• If you are not absolutely sure who you are dealing with, get the company’s number in the phone book or from directory assistance, and call it to make sure you’re dealing with the company you think you are. Some scam artists have pretended to be the Better Business Bureau or another legitimate organization
• Check out questionable ads by calling Project Phonebusters in Canada toll-free at 1-888-495-8501. If you live in the U.S. and think you’ve been a victim of an advance-fee loan scam, report it to the FTC online at www.ftc.gov or by phone, toll-free, at 1-877-FTC-HELP (1-877-382-4357)
Bulk REO Scams
I have been involved in several of these. Most of the people involved are seasoned and legitimate professionals that seem to be taken in by large sums of money paid as commission. In your usual day to day deals you are used to working with people you may know as legitimate and if you do not know them at least there is a procedure where you will be able to check with who and what you are dealing with.
Many of the professionals I have worked with in the bulk REO market seem to throw caution to the wind in order to get these mostly fake deals done.
If you are not a Real Estate Lawyer and you solicit million and billion dollar BULK REO deals on the internet, and are asking for proof of FUNDS etc. you are probably in violation of the LAW!
Make sure you find out who you are dealing with and beware of the realm of secrecy and have to move tactics that are so prevalent in these deals.
Find out and corroborate any past deals that have been done.
There are legitimate brick and mortar companies that handle bulk REO and you should seek them out if you are an investor in these commodities.
BG’s, PPP, MTN, LC and SBLC’s
These deals seem to be scams also. Bank Guarantees almost definitely are scams. You can search out the Internet for more information and you can check out the FBI site http://www.fbi.gov/majcases/fraud/fraudschemes.htm
Gold, Oil, Diamonds and other commodities
More of the same. I have worked many oil deals and know the ins and outs. Again most are scams.
I am sure I will get emails back about this information from those of you that claim to have legitimate sources of money, property or investment platforms. I will not argue the validity or your deal with you or anyone else. What I will say is that if your stuff is legit, then it should be easy to prove. I say if you have nothing to hide than you hide nothing.
I know of an FBI sting going on to catch a group for stealing upfront money investments and the people that were duped were all successful, seasoned and intelligent. The problem is that we all seem to lose our heads when large amounts of money are involved. Also when your life is falling down all around you and someone tells you they can get you millions without great credit or collateral be very leery.
The important point here is not to believe anything you hear or read. If you get a call from a trusted friend who says they are working with someone direct to a bank that has bulk REO’s and needs a buyer; great. Go to the bank and substaintiate the claim.
If you need to get the information on any bank or financial institution, their asset managers and / or lost mitigation etc… Try Lane Guide. It has all the most recent information and I have used it to connect to banks directly. Use it… Call them… Confirm.
Please do not come back to me to check out your particular deal. I will not. It is up to you to do the due diligence.