Re: Is this Ethical? - Posted by Joe Kaiser
Posted by Joe Kaiser on June 17, 2003 at 24:36:52:
You insult people when you assume they are poor helpless souls
who don’t know what’s best for them.
They’re not . . . and they do.
You said that they are the victims of someone who’s “literally
taking away all that they have.”
No . . . they got $100k.
I’d do this deal in a heartbeat. Locking up $100k for someone
who, left on his own, might lose everything, is a good and
valuable service.
Certainty is worth a lot. The “bird in the hand” thing is worth a
lot.
I’ve been to sales where huge equities are lost, where bidders
have conspired not to bid and later divide up their booty. Tell me
what happens to these people when the winning bid is $62k?
Don’t tell me it can’t happen . . . it happened to me.
Do you know why record companies get recording artists to sign
for peanuts? It’s because they lose money 9 times 10. It’s a high
risk venture. The one good deal has to pay for the other nine,
plus, just so they can come out ahead. Hopefully, that one deal is
a huge money maker cause if it ain’t . . . they’re history.
High risk transactions like foreclosures require significant profits
because the downside is huge and there’s real potential for the
investor to get blindsided and lose everything.
What happens when the investor pays the $10k, stops the sale,
puts money into the place to get it ready to market, finds a buyer
. . . and then the former owner says they didn’t understand the
deal and thought it was a loan?
What happens is bad things.
Free legal aid isn’t free to people like you and me by the way . . .
we pay through the nose.
If you’re in this business, you have to make huge profits for the
very fact that there’s a risk/reward ration that will kill you if you
don’t. That $100k profit may look unreasonable if you’re looking
at one deal, but in an overall view it may in fact be paying for the
deal last month that didn’t work out.
Finally, there’s nothing wrong with offering someone $100 for a
$5k rolex. I make those kinds of offers all the time, and when I
do, there are no obligations or strings attached. The other person
decides for themselves whether or not the offer makes sense. If so
and they are so inclined, we do business. If not . . . we go our
separate ways.
Distressed and motivated sellers are not the poor helpless souls
you make them out to be . . . and would likely be offended if they
realized you’d pigeon-holed them as such. They are people with
problems who would like the problems gone and some certainty
as to the resolution, and they will gladly pay you for providing
that service to them.
The alternative is rolling the dice, sitting with their fingers
crossed, hoping the house sells at the sale for an amount that
gives them enough to move on, getting the foreclosure stuck on
their credit report for ten years, wondering if the sheriff is going
to come by to throw them out on the street, fearing the new
buyer will show up unexpectedly and force them to leave, having
zero dollars to move or get into a new place, having to hire an
attorney and wait months to be able to collect any funds they
have coming from the sale, and on and on and on.
You seriously thing that’s a better deal then the $100k they got?
If so, you don’t know people.
Joe Kaiser
