Posted by Kate (VA) on May 23, 2001 at 08:00:42:
I agree with you totally regarding the buyer’s responsibility. I actually sent a letter to the editor regarding that (along with some other points). Every buyer has the right and responsibility to protect themselves and ask to see the appraisal, comparable sales, do a walk-through before closing, etc…
Ted Sherman is definitely using scare tactics to paint the picture that investors are ‘bad’. Unfortunately, most people will believe him.
Kate
NJ Flipping Article- PART TWO - Posted by Ben (NJ)
Posted by Ben (NJ) on May 22, 2001 at 11:50:54:
this follow up article is ugly too, note the comment that even the mob is getting into flipping!
go to today’s stories
then to “Probe of NJ Firm”
Re: NJ Flipping Article- PART TWO - Posted by Joe(NY)
Posted by Joe(NY) on May 22, 2001 at 14:21:56:
The article makes is appear that flipping a home for a profit is illegal. Is this the case? Or is it simply the fact that the individuals flipping the properties did not properly insure that needed repairs were made prior to the sale? Actually, if they fixed it up it wouldn’t be a flip would it? How could these companies have taken better care to ensure that the deal would be win/win for the buyer?
Sorry for the naive questions, newbie here.
Here’s the link… - Posted by IB (NJ)
Posted by IB (NJ) on May 22, 2001 at 11:56:04:
Thanks Ben. I was just reading it:
http://www.nj.com/news/ledger/index.ssf?/page1/ledger/1352f00.html
Re: NJ Flipping Article- PART TWO - Posted by Kate (VA)
Posted by Kate (VA) on May 22, 2001 at 14:34:28:
The illegality is in the fact that the company used inflated appraisals to support higher than market value prices, thereby defrauding the lender and the homebuyer. Flipping for profit is not illegal if you are buying at a discount and selling for a fair price. The company apparently also misrepresented the repairs they would be doing on the houses, but it is not clear in the article if the repairs were promised verbally or in the contract. My guess is that the company said ‘Oh sure, we’ll fix all those things.’ and the buyer took them at their word without getting it in writing. It doesn’t sound like this company cared about making this a win-win situation.
Kate
Re: Here’s the link… - Posted by Clare Z
Posted by Clare Z on May 22, 2001 at 12:59:14:
I think investors in NJ should do what was suggested earlier and get together as a group (local CRE club?) and issue a statement to the press - even a press conference would be great - especially.
It is called free publicity and it needs to be said. Make sure your speaker is someone who can articulate and knows his stuff.
Otherwise a letter signed by a bunch of CRE investors sent to the paper and other media. Just make sure to have it proofread first. A rambling, poorly spelled missive will do more harm than good.
Good luck.
Clare
Re: NJ Flipping Article- PART TWO - Posted by B.L.Renfrow
Posted by B.L.Renfrow on May 22, 2001 at 22:29:44:
While it’s clear this guy was a rogue, it’s not mentioned until nearly the END of the article that the real issue is the bogus appraisals. It clearly would leave the average reader with the distinct impression that selling at a higher price than the purchase price in a short period of time is illegal.
That impression – the writer drones on quoting some moron who uses the term “conspiracy” in reference to buying low-selling high – is becoming more widespread, as more of these stories appear nationwide.
What really gets me is that NOWHERE in this article, or for that matter, any of the others I’ve seen, does it place ANY responsibility on the buyer. Were these buyers forced at gunpoint to sign these notes they could barely afford? Did they not know enough to turn on the light switches BEFORE they signed the closing documents?
All of us who have done a few deals probably know how quickly buyers “forget” what they’ve been told, and often, even what they’ve signed. Now, I am NOT defending this investor, if the report is accurate. If he truly used bogus appraisals and promised repairs which were never done, he deserves to be sent up the river. But we’ve seen only one side of the story, and none of those sources quoted struck me as very objective. They’ve ALL got an ax to grind or a point to make.
The bigger issue, as I see it, is the lazy reporters and editors who don’t explore the issue enough to determine the difference between legal, for-profit transactions and illegal fraudulent deals. It’s not that difficult to understand. There seems to be a rush to label any transaction in which “excessive” profit is made as illegal, or fraud. What’s excessive? Who knows? I guess to this writer, $100k.
I think there truly is a bias among many members of the media against business-people, and especially investors. The portrayal of investors and landlords as rich, greedy, profiteering and self-centered is common, while the poor, average slob who doesn’t pay his rent or mortgage is always the innocent victim.
Funny thing is, when I was a reporter (a LONG time ago) I’d dismiss those comments about the “liberal media” with a wave of my hand and say, “Naaahhh…it’s not like that…”
Brian (NY)
Good idea Clare… - Posted by IB (NJ)
Posted by IB (NJ) on May 22, 2001 at 14:06:39:
I’m going to attend and bring this suggestion up at the next local REI meeting.
And not one quote… - Posted by IB (NJ)
Posted by IB (NJ) on May 23, 2001 at 15:03:55:
from a RE Investor who legitamately conducts business. The media consistently uses these scare tactics to excite the reader and sell more papers. That’s why we call that paper the “Star Liar” around here.