What's wrong with the world today? - Posted by Brian_wa

Posted by Brian_wa on September 03, 2006 at 12:33:19:

I’m a minority. I still haven’t yet decided whether to use Brian or Ryan as my American name. However, I have never used a false email address whenever I post something. Jeanne knows of this already because I emailed her explaining that before.


What’s wrong with the world today? - Posted by Brian_wa

Posted by Brian_wa on August 29, 2006 at 19:11:39:

Joe Kaiser’s recent topic regarding “what’s fair” and some of the corresponding responses troubled me greatly. Why is it so hard for some people to see that buying 200k house from a distressed seller for 50k is not fair? Why do they provide a negative example to try to prove a negative point of view? Just because there are people who steal and cheat other people yet able to get away with it, does that mean it is ok for them to do so as well?

Being entrepreneurs and business professionals, shouldn’t it be second-nature to try and go beyond what’s fair when it comes to treating your clients, customers, sellers, buyers, or other human beings?

Can’t they see that leaders in most (if not all) business sectors are companies that go beyond what is expected of them? From customer services, to products, to social responsibilities.

Do these people really know the Golden rule? Do they ever ask themselves how they would feel if one of their loved ones unwittingly signed a P&S agreement with an investor to sell a 50k house for 200k? Would they advise this relative of theirs to proceed with the deal as agreed upon or try and find every possible way to get out of it?

Even if these people don’t follow the Golden rule, couldn’t they see that by operating a business in a moral and ethical manner (like truly successful entrepreneurs such as Warren Buffet or Bill gates), they actually would be able to make more money and be more satisfied with life?

These are just a few questions that I have. Am I being too critical?


I seen it done this way … - Posted by Frank Chin

Posted by Frank Chin on August 31, 2006 at 08:02:11:


Have the seller get an attorney first …

John Merchants post to Joe Kaiser’s thread mentioned below using an attorney to ascertain the seller’s competency, remninded me of this. The nice thing is, seller’s attorney attorney can be front and center in the seller’s foreclosure rescue.

While I don’t particularly work pre foreeclosrures, there were several came as a referral from sellers’ attorneys. One in particular, the seller was six months behind on his first, and six months behind on the second, which was an SBA.

The seller with his attorney already explored bankruptcy, letting it go to the courthosue steps, etc. The only real offers came from builders, and only for the cost of the land, around 70K. The way the numbers worked out, it’ll only pay the outstanding, little short on the arrears. The seller gets nothing.

The seller was also frantic to get a few dollars, because he owned several thousand to some loan sharks, and PAST DUE. The way it was explained, if the seller gets 10K, it’ll take care of this, the arrears, he’s more than happy!! The way the seller explains it himself “I won’t get my legs broken”.

So we worked the deal out to 80K, if we’re allowed to flip it. We advanced monies to cover the arrears, and for the loan sharks. Seller’s attorney’s normally do not like assignments up here, and it’s tough to get, but to have it volunteered is worth the 10K. The place worth 120K to 130K fixed up.

For Joe, Jim(FL), so far, – sound familiar, not the attorney part, but paying 10K for the guy to walk away, that is.

After reading Joe’s “who’s on first” post, the great thing here also was the seller’s attorney had done all the work, knew exactly what the outstandings are, knew who he spoke to, and even called the lenders involved and told them “Mr. Chin is working with us, and if you need a letter, we’ll send letter to that effect”.

All in all, there’s no question as to the sellers competency (he is stupid!!), whether he’s getting the best offer (10K more than anyone else), misinformed (attorney with him at every step), pressured (only by the loan sharks)

I have no complaints.

Frank Chin

Re: What’s wrong with the world today? - Posted by ANON

Posted by ANON on August 30, 2006 at 20:35:01:


What happens when a seller calls you at midnight and tells you his
house will be sold on the courthouse steps the next morning at 10 and
he needs 50K for his house that you figure is worth 100?

Your bank opens at 9 BTW.

What is his house now worth to you now?

What is it worth to the seller?

What would it be worth to the general public?

Could you even make ANYTHING happen for the seller at this point?

Joe could.

This is Joe Kaiser’s “marketplace”. These are the situations that he puts
himself in the middle of.

He’s an expert at what he does. He does it better than anyone else and
deserves the big bucks for being able to do the sort of things that no
other investor in town could do or be willing to do.

He didn’t put the seller in his current situation but he knows 101 ways
to get him out of it.

The type of deal he mentioned is totally fair and totally ethical in Joe’s

Here are a few questions I have. - Posted by Drew

Posted by Drew on August 30, 2006 at 18:40:29:

What happens to seller responsibility in your model?

I am assuming throughout this discussion that we are not talking about ?clean? offers, not market manipulation, misrepresentation or deliberately misleading the seller.

When I make an offer of $50k, I am presenting the seller with a choice. They are not a captive audience; I am not forcing anything upon them. I think we can agree that it is better to have a choice than to not have a choice.

As I understand your fundamental argument, the problem with me offering this choice is that it ?violates? a sort of militant Golden Rule; namely, it takes my economic benefit into account without proper consideration for theirs. I read this with interest, since I am still not entirely sure where I fall in this discussion. While I feel in my gut the rectitude of your position, I struggle with the following questions:

First. This militant Golden Rule implies that whenever I enter the marketplace, I am bound not just to represent my own economic interests, but those of other parties. I can never make an offer I would not accept myself, since my interests and the sellers? interests are linked (?Do unto others??).

How could a market ever efficiently operate in such a manner?one where individual value maximization is no longer the sole imperative? Those ?leading companies? you reference ?go beyond what is expected? because they have learned through experience that doing so will maximize their profits, not because they feel categorically obligated to represent any interest beyond the maximization of shareholder value. This equally applies to the goodwill generated by corporate charitable giving.

In the same way, I enter the marketplace to maximize my own value, and I generally assume the seller has done likewise. In such manner are fair markets made. It is not my job to guess the sellers? economic indifference curves and represent them against myself in a transaction. Good Lord, what a model to try to base an economy on??everybody represents everybody!?

What happened to the seller responsibility to represent their own interests?

?But the seller does not possess your knowledge and experience. They can not make a proper decision.? Fine. Let?s talk about that.

Under what divine commandment did the seller gain a God-given right to access my proprietary knowledge and experience? How did they become entitled to a complementary remedial education at my own expense, one they themselves were derelict in pursuing?

Or, if you prefer: How did I LOSE the right to benefit from my own knowledge and experience? Why do I become bound by the irresponsibility of the seller? Just what is the point of me personally developing expertise, if it is only going to be a communal asset, available to anyone I do business with?

What happened to the seller responsibility to obtain basic competence before representing themselves in a marketplace transaction?

I accept that I have ethical obligations and responsibilities as a buyer. I am not sure that educating and representing the seller are among them.

What about the responsibilities of the seller?

Caveat venditor. Caveat emptor.

Please, don?t flame me. Again, I am not 100% sure where I come down on this.


Re: What’s wrong with the world today? - Posted by Frank Chin

Posted by Frank Chin on August 30, 2006 at 08:00:29:


Based on answers I’ve seen there’s “no Golden Rule”. “No Mercy” is more like it.

Since Joe asked, this is MY IMPRESSION of the negotiations, and reading thru Joes’ example, it can charitiby be described as a “hard sell”, or at worst, a “con job”.

In his words:

“You talk for a bit and kind of strike up a friendship. Not really, of course”

The “not really” part to me seems like he’s dealing he’s dealing with a “prey”, as compared to dealing compationately with a “human”

He goes on:

“There wasn’t much negotiating going on, really. He just kinda said he’d take
$50k and be happy”

The price of the house is never discussed. It’s more like “Hope 50K sounds like a big enough number to this loser who never had more than $10.00 in his pocket”.

And finally:

“You don’t know how much more,
but you know in your gut it’s a great deal . . . maybe even a steal.”

An honest guy concluding a deal would know the numbers. If Joe stood in front of jury with this conclusion of the deal, he’ll be labelled a “con man” for sure.

What happens when stuff like this goes on??

The government steps in and make the rules when there’s NO GOLDEN RULE.

Frank Chin

Have you ever traded in a car? n/t - Posted by Jeremy FL

Posted by Jeremy FL on August 30, 2006 at 07:46:23:


Your kind of thinking - Posted by Marc Donovan

Posted by Marc Donovan on August 30, 2006 at 07:20:52:

Read “Atlas Shrugged”. Then come back and tell us what you have discovered.

Value, like beauty, is in the eyes of the beholder. This is what keeps capitalist economies humming along.

If my grandmother gave her house away, I would not be mad at all. If she was not aware of the value I would ask her why she did not inquire about comps. If she was aware, I would call it her decision and not something a judge or jury has any business second guessing. Either way, its down to her. Not me.

People have many reasons for selleing things way under market value. The wide majority of those reasons are no fault of the buyer.

Here’s a concrete example: I have a whole house full of furniture, nick-nacks, whatever. My employer says move or lose your six figure job. I need to pay a mover mucho dinero to haul my junk. I decide to sell it in my yard for 1/8 its market value. Do you fault my neighbors for not offering me 1/2 of fmv? Would you come along and buy all my junk at 1/2 fmv to save me from my ignorance?

I started out dealing mobile homes. Folks would pay me to take their homes. The blue-book value was typically $5K to $10K - true wobbly boxes. Would this be considered unethical to you?

What happened if I did not take the homes? They got sued for lot rent (usually $2k to $3K). Thier credit was shot, the park took the house and resold it.

I took their problem, paid the lot rent, sold the home to a new owner. They all knew what the market value was - I told them what I would sell it for.

Often their realtives would call me a thief. But I did not see them stepping up to the plate either.

I provide solutions to problems. I get paid well for that. My sellers are perfectly aware of “value” and they all thank me for fixing their problem.

I’m sure Bill Gates pays… - Posted by pboone

Posted by pboone on August 30, 2006 at 01:01:38:

Less than 80.00 per copy of windows now how much is a fair resale price? This or any business is not an emotional business you buy something for x then sell it for y. whats the problem?

OK, so then what IS fair? - Posted by Andrew

Posted by Andrew on August 30, 2006 at 24:23:35:

Where is the imaginary “FAIR” line drawn in your world? How much should you pay for a $200k house?

Re: What’s wrong with the world today? - Posted by Darren

Posted by Darren on August 29, 2006 at 22:33:34:

If your mother owns a house worths 200k and she wants
I agree with you Brian. You can profit and profit greatly without capitalizing on someone’s ignorance.

You are dead on with the the litmus test. If an investor were to give another investor’s mother 50k for a 200K house, investor A would be on the phone with his attorney the next day. The golden rule is to do unto others as you would have them do unto you.

All of these analogies about cars and stocks and cereal are weak at best.

Here’s a good start… - Posted by Killer Joe

Posted by Killer Joe on August 29, 2006 at 22:14:59:


Joe never said he bought a $200K house for $50K. Here are his words from a follow-up post below…“Someone suggested $200k, which pretty much distorted the intent of the post as people focused on that number. I was thinking more like $100k, but no matter.”

Your words…“Why is it so hard for some people to see that buying 200k house from a distressed seller for 50k is not fair?” Granted some folks jumped on the $200K figure and ran with it, it appears you are implying Joe was talking about that figure as well. I say this because the sum of your posts reflect that.

So you can see that even in as tight a group as we have here there is faulty communication leading to what amounts to false information and implications that are not supported by the texts presented.

Misunderstanding, in all forms, is one of the root causes for what’s wrong with the world today. It could be argued that in the case of someone selling a $200K property for $50K of their own volition there was some ‘serious’ misunderstanding going on. It could also be argued that the misunderstanding lay predominantly with the seller.

I liked Mike-Oh’s take on personal responsibility as I believe it is fundamental for success in life. If a person who lacks such a quality falls prey to their own inabilities to grasp the situation for what it is, the fault does not lie with others. It is a self inflicted wound that bears consequences. Such is life. The original post by Joe was not about someone out of the blue coersing a nieve seller out of their nest egg, but somehow the connotations shifted in that direction. A shade of misunderstanding to be sure.

Just my $0.02


Re: What’s wrong with the world today? - Posted by LK

Posted by LK on August 29, 2006 at 22:08:14:

A lack of compassion for our fellow man, a lack of personal responsibility, a lack of morality, etc, etc. But, I?m not sure what that has to do with buying real estate below market value. Everyone, no matter what business there in, knows what is right and what is wrong. Most people have a conscience. We can choose to give as much of our time and money to charity as we wish in order to help others. Most of us could live off of much less than we make. We could use this extra time and money to visit the poor and elderly to help them much more than ?saving them from foreclosure?. But none of us are perfect and we all have a business to run. Hopefully, it will be a successful business. This means if I don?t buy real estate at the lowest possible price, I?m not doing my job. This can be done without deceiving, cheating, manipulating, lying, or hurting anyone?s grandmother.

Doesn?t a homeowner have a responsibility to know what their home is worth or to at least be able to find out? Don?t they also have a responsibility make their payments? Is the bank being unfair or uncompassionate by repossessing a poor widow?s home that she has been paying on for half of her life? Maybe that is where a compassionate investor that?s not that concerned with profits should step in and help this lady keep her house for only a small amount of compensation.

I?m not a ?pre-foreclosure? investor. I have just been making observations and am simply presenting my opinion. I mostly purchase listed properties by making the lowest offer that I think the seller may be willing to take, regardless of the asking price or how much more the FMV may be. If the people I were buying from were close friends or family, I would want to tell them how to sell their house for more and may even feel bad for profiting off of their “loss”. If I did this for everyone (to apply the Golden Rule) I could not be an effective real estate investor, but I may make a good real estate sales consultant. No wait, that is called a real estate agent.

Why America is great - Posted by Luke

Posted by Luke on August 29, 2006 at 21:44:32:

Why sell an Armani suit for 6K when they could do it for 2K?
Why sell brand name cereal for $5/box when they could do it for $1.50?
Why sell gas for $72/barrel when they could do it for much less?

Because they can!

That is one of the reasons America is where it is right now. It’s a free market society and that drives economies.
Whether you like it or not it is survival of the fittest out here. It’s never going to go away.

Everytime there is a misfortune, there will be someone there to profit from it, why not you, why not me.

I have a lot of freinds that share your viewpoint and some that share mine. The very clear difference in these two group of freinds is their income levels. The ones that share my view point are far more wealthy than those who don’t.
Now, I’m not saying that you can’t be successful with your type of mindset but I do believe it’s easier.

Also who draws the line and where is it drawn? Should they give her 60K for 200K FMV? 100K?

Those are just my points and I stick by them.

Re: What’s wrong with the world today? - Posted by Tim

Posted by Tim on August 29, 2006 at 20:42:28:

It is my understanding that Bill Gates bought the core software for Microsoft for $50K from another group who were in a bind. Clearly he believed it was worth a lot more than that and has since been proven right. Warren Buffet does what most astute investors in stock do, he buys stock in companies that he believes are undervalued. How is this different from buying a home for less than market value?

I am not making a value judgement about the “fairness” of buying a 200k house for 50k, but your examples just don’t fly. I will say that Gates has started doing a lot of charitable giving, and I am pretty sure Buffet has for a long time. However, they both got to their current position by buying assets they believed to be undervalued.

Re: What’s wrong with the world today? - Posted by ken

Posted by ken on August 29, 2006 at 20:40:54:

What if $50000 is what the seller said he wanted for the property.Does the buyer have an obligation to pay more just because it is worth more even though the seller is the one who offered the sale at $50000.And if the answer is yes how do you guys who answer yes to that question decide what is a fair price?What is fair versus what is a reduced price but you are only making a living as opposed to a killing.

Re: What’s wrong with the world today? - Posted by Mike-Oh

Posted by Mike-Oh on August 29, 2006 at 20:02:45:

What’s wrong with this country is that we’ve turned into a society of victims and whiners. In Joe’s question, he clearly stated that the seller was not incompetent or otherwise unable to make a competent decision. People should be able to make decisions and enter into contracts AND BE HELD TO THOSE CONTRACTS.

Millions of Americans are too lazy to work - so the government (you and me) pay all their bills for them.

People make a choice to live in hurricane country without flood insurance and then whine when their property isn’t covered when it is destroyed by a flood. Of course, I have to pay for that too.

People lose their homes when they make stupid decisions regarding what type of loan to get and then the government has to pass predatory lending legislation.

What’s wrong with our world? A lack of personal responsibility and the expectation that the government must do everything for us!!!


The problem is… - Posted by IB (NJ)

Posted by IB (NJ) on August 29, 2006 at 19:32:52:

this world leans more towards individualism everyday. Everyone does what’s best for him/her and to heck with the next man. We can’t see how we’re all connected as human beings. Therefore we can’t see how if one of us is hurt and scammed, we all are. At the least we fail to see anything wrong with ripping off someone’s Mother, yet we don’t want our own Mother ripped off.


Re: What’s wrong with the world today? - Posted by Jack

Posted by Jack on August 30, 2006 at 22:32:05:

But even at the last minute, a competent home owner would know that they have two better options then selling their 100k house to Joe Investor for 50K (and pocketing maybe 10K), a. File bankruptcy. b. Let the property go to sale and collect the over bid moneys. In all probability some investor (like me) is going to bid 65K or 70K for the property. Of course the bid results will vary by local.

Re: What’s wrong with the world today? - Posted by Brian_wa

Posted by Brian_wa on August 30, 2006 at 20:42:31:


I’m also a foreclosure investor. Of course I know how to help this guy even in such a pressing matter. And I have stopped preforeclosures like these before. You could beg the lender… Pay a few ks to postphone the foreclosure. Or pay the arrears to the trustee at the auction…

Since it’s a lot riskier, I’d expect more compensation but the amount ain’t gonna be considered as stealing for sure.