I want to know if real estate investment offers are legit?

Question

I have saved up some money while working overseas and have found some companies advertising on craigslist. I would like to run due diligence on them and to see if their offers are dependable.

One is in Florida- and these sell condominiums. I have emailed some lawyers there asking them if they would be willing to check them out. However, I have gotten no response at all.

The other one is in Georgia. The are advertising for credit partners. One co-signs mortgages or something like that and gets a profit after a certain time.

I have run both through BBB but they have shown no record of them. I have emailed them and they simply said that they are not BBB members but they have a tax ID and are registered with Secretary of State.

How can I run due diligence on both of these companies? Where should one look up their records, business history, complaints against them, etc. Who would be willing to do that?

Your reply will be appreciated,

Sincerely,

Answer 1

The Florida real estate market is full of scummy people more than happy to sell you an overpriced property. Dangerous market right now, be extremely careful. One client of mine got into a deal where by the time the home was built, he already owed $75,000 more than it was worth.

The Georgia stuff is probably actually illegal. "Credit partners" sounds like a nice name for "straw buyer". You buy the property, they cash in, promise to rent it out or make payments, but you never see a dime. You'll end up with multiple foreclosures.

This is a pretty scary investment, really. Proceed with the utmost caution. And I firmly believe that both of the options you just listed will cost you tens of thousands of lost dollars.

Answer 2

Although 25% return for money with very little strings attached (no appraisal requirements, no underwriting, no oversight, no points, etc) is not uncommon in RE investing, the principal amount of $1000 is hard to reconcile. Most posters here are correct, $1000 buys almost nothing in an RE transaction. If they were asking $10,000 with 25% return it would actually seem more viable. If you feel compelled to do this, ask to have a $1250 deed of trust attached to the property, that way it cannot be sold without paying you off. (However if the property is foreclosed, you will likely lose it all). Also, ask to see the numbers on the property, how they are going to make their money, the difference between the after repaired cost basis and the fair market value. To answer the doubters out there, the reason why there are people willing to pay 25% return is that the number of hoops to be jumped through with private money is much less and since the money is only collaterallized and underwritten on the value of the property, there is no credit check generally. The key to mitigate the risk is to get yourself and the repayment of the money lent attached to the title, and keep tabs on the property progress. The worst case scenario is that the person is completely incapable of running the deal and loses the house to the bank or other larger investors....do your homework!!

Answer 3

If you're interested in real estate investment with a company that doesn't seem to have a record accessible online it's probably a bad idea. However, if you are interested in investing in real estate, I work for Boston Equity Investments, a company which buys multi-family housing and converts them into luxury condos for a profit. We have a great success rate and a unique program that not only guarantees 95-100% financing, but eliminates risk for the investor. Boston's an amazing place to invest in real estate because of the high demand for living space. If you're interested in looking into our company, take a look at our site www.beipartners.com and you can check us out on BBB

or you can contact me directly for more information
Anna Carver
Boston Equity Investment
[e-mail]
607.280.1577

Answer 4

Sounds like you've pretty much answered your own question on the couple you mention. Doesn't sound like they HAVE much history, etc. Having a tax ID and being registered with the Secretary of State just means that they filled out paperwork, not that they are legit.

You could google both company names. If you don't find much of anything, stay away.