Hi Fellow Investors,
First and foremost, we’d like to welcome you to our very first blog entry!
I hope you all had a very happy and tummy filling Thanksgiving this past weekend!
We want to share with you a story that happened to us last week. We think its pretty interesting, and most of all pretty alarming.
For those of you who don’t know us very well a quick introduction is a must =)
We Buy Houses 911 is a fairly young company, we established ourselves in July of 2012, my name is Kate and my partner’s name is Sandy. With huge passion for this business and industry we embarked on the challenging path to our success! With continuing education, fantastic mentors, role models and local REI clubs we feel empowered and grateful for our local REI community. We cant wait to continue our growth.
Oh, and I can’t forget to mention about what we do! We actively market for motivated sellers to find properties under market value in the Durham Region (Ajax and Whitby, to be precise). We wholesale properties at the moment, but are also working towards bigger-long-term projects!
So without further ado... Here is the story:
Last week we received a call from one of the “investors” we had previously contacted about one of our properties. This time though, he was calling us to see if we had any interest in taking on his proposed deal or passing it on to our pool of investors.
From our initial, rather short conversation, the deal sounded pretty appealing:
Here is the tricky part, we must act FAST and also this is a commercial deal (to which we have no previous experience at all!).
After discussing this with my partner Sandy and considering the fact that this is not our area of expertise, we were still pretty intrigued to find out more details about this “fantastic, no risk, fast money opportunity” (as per the “investor”).
We contacted him that same evening to let him know that we would consider it once we see the business plan, financial records of this existing business, market comps. Mainly what we wanted was a proper JV proposal. A rather standard request from a potential JV partner (in our experience). This was the exact response we received: “This deal was too good and we had to act fast, I didn’t have time for due diligence, but anyway, we got another investor for this deal already!” - Red Flag #1 No Due Diligence!?
Hmm alright, maybe we are over-thinking this? But not having any sort of due diligence on a commercial (or any) deal for that matter is a little strange to us!
Next day, that same investor called us for an urgent last minute meeting, to talk about another deal that came up! We dropped everything we were doing to have this lunch meeting. Mostly because we were curious to see what this fuss was all about.
After an hour and 15 minutes of this meeting we walked away rather confused, trying to put together what we just talked about. Here is what we were told:
Red Flag #2 - Jack of all trades, master of none!
They don’t say “The more you learn the more you earn” for nothing!
Referring to some of the biggest investors in Real Estate in Canada, some of the most respected educators in Real Estate and our mentors we saw some pretty big contradictions in what he was saying to us:
Just to name a few...
Only 20 minutes after our meeting we received another urgent call from this investor telling us he had a fantastic residential opportunity but once again, we MUST act FAST!
When I asked him “Why is this a good deal?” he said “because you will get $10,000 for going on title”. When I asked what will happen at closing he said “he didn’t care, maybe he’ll rent it”, When I asked what the average rent in the area was, he said “$2600”, and when I asked about comps in the area, he said “they were about the same as the house.”
Needless to say, at this point we weren’t even considering working with this individual (on any deals), but we were still curious to investigate what his plan was!
Here is the funny part, this “amazing deal”, was actually the most expensive property on the street (in fact, 35% OVER Fair Market Value), the rents in the area were not higher than $1600/month on a comparable property and essentially, the promised $10,000 at closing was nothing more than a lucratively worded discount on a ridiculously over priced property that we would be stuck with! Also (as if this isn't enough!) his license as a Mortgage Broker was actually expired! - Red Flag #3 Expired Mortgage Broker License
& Red Flag #4 Completely Ridiculous "Deal"
As pretty new real estate investors we were floored! Was he trying to take advantage of us? Was he trying to scam us? Or was he just a lousy "investor" trying to make ends meet?
We really don’t know, but what we do know, is that if it wasn’t for our fantastic team, mentors and our Real Estate Education, we could have been in a pretty big dill pickle of a situation!
We wanted to share this experience with our REAL Estate Investors, and any NEW eager investors out there, so you know what kind of people to avoid! Only work with people you are truly comfortable with!
Thanks for taking your time to read our first entry!
Feels good to be loved!
Until next time,
~Kate Babkova~
We Buy Houses 911.
First and foremost, we’d like to welcome you to our very first blog entry!
I hope you all had a very happy and tummy filling Thanksgiving this past weekend!
We want to share with you a story that happened to us last week. We think its pretty interesting, and most of all pretty alarming.
For those of you who don’t know us very well a quick introduction is a must =)
We Buy Houses 911 is a fairly young company, we established ourselves in July of 2012, my name is Kate and my partner’s name is Sandy. With huge passion for this business and industry we embarked on the challenging path to our success! With continuing education, fantastic mentors, role models and local REI clubs we feel empowered and grateful for our local REI community. We cant wait to continue our growth.
Oh, and I can’t forget to mention about what we do! We actively market for motivated sellers to find properties under market value in the Durham Region (Ajax and Whitby, to be precise). We wholesale properties at the moment, but are also working towards bigger-long-term projects!
So without further ado... Here is the story:
Last week we received a call from one of the “investors” we had previously contacted about one of our properties. This time though, he was calling us to see if we had any interest in taking on his proposed deal or passing it on to our pool of investors.
From our initial, rather short conversation, the deal sounded pretty appealing:
- Commercial Real Estate Deal: Convenience Store FMV $90,000, Wholesale $30,000
- Turn Around time 3-4 months
- We go on title for this deal
- He does all the work and organizes financing
- Closing will take place before November 1st, 2012
- We require a refundable $6000 deposit fee
- We get paid $10,000 (plus get back our $6000) on November 1st, 2012
Here is the tricky part, we must act FAST and also this is a commercial deal (to which we have no previous experience at all!).
After discussing this with my partner Sandy and considering the fact that this is not our area of expertise, we were still pretty intrigued to find out more details about this “fantastic, no risk, fast money opportunity” (as per the “investor”).
We contacted him that same evening to let him know that we would consider it once we see the business plan, financial records of this existing business, market comps. Mainly what we wanted was a proper JV proposal. A rather standard request from a potential JV partner (in our experience). This was the exact response we received: “This deal was too good and we had to act fast, I didn’t have time for due diligence, but anyway, we got another investor for this deal already!” - Red Flag #1 No Due Diligence!?
Hmm alright, maybe we are over-thinking this? But not having any sort of due diligence on a commercial (or any) deal for that matter is a little strange to us!
Next day, that same investor called us for an urgent last minute meeting, to talk about another deal that came up! We dropped everything we were doing to have this lunch meeting. Mostly because we were curious to see what this fuss was all about.
After an hour and 15 minutes of this meeting we walked away rather confused, trying to put together what we just talked about. Here is what we were told:
- Any real estate deal is a money making deal
- He goes through five deals a day and closes on one of them
- There are plenty of deals, just hard to find JV’s to go on title
- He does all types of investments (from debt consolidation, to Rent to Own to Rentals, etc.)
- Does deals anywhere in Ontario
- Doesn’t believe in long term investments
- Hamilton, ON is a bad place to invest
- His business card said he was a Mortgage Broker
- During the meeting he never mentioned anything about the deal he promised us and deflected every question possible!
Red Flag #2 - Jack of all trades, master of none!
They don’t say “The more you learn the more you earn” for nothing!
Referring to some of the biggest investors in Real Estate in Canada, some of the most respected educators in Real Estate and our mentors we saw some pretty big contradictions in what he was saying to us:
- There is way more money in the world to invest than there are deals!
- Even our mentors who have been investing for 10 years or more try to close on one deal per MONTH, not one per DAY!
- “Hamilton has been named the top city in Canada to invest in.” ~ R.E.I.N.
- Professional investors invest for positive cash flow
Just to name a few...
Only 20 minutes after our meeting we received another urgent call from this investor telling us he had a fantastic residential opportunity but once again, we MUST act FAST!
When I asked him “Why is this a good deal?” he said “because you will get $10,000 for going on title”. When I asked what will happen at closing he said “he didn’t care, maybe he’ll rent it”, When I asked what the average rent in the area was, he said “$2600”, and when I asked about comps in the area, he said “they were about the same as the house.”
Needless to say, at this point we weren’t even considering working with this individual (on any deals), but we were still curious to investigate what his plan was!
Here is the funny part, this “amazing deal”, was actually the most expensive property on the street (in fact, 35% OVER Fair Market Value), the rents in the area were not higher than $1600/month on a comparable property and essentially, the promised $10,000 at closing was nothing more than a lucratively worded discount on a ridiculously over priced property that we would be stuck with! Also (as if this isn't enough!) his license as a Mortgage Broker was actually expired! - Red Flag #3 Expired Mortgage Broker License
& Red Flag #4 Completely Ridiculous "Deal"
As pretty new real estate investors we were floored! Was he trying to take advantage of us? Was he trying to scam us? Or was he just a lousy "investor" trying to make ends meet?
We really don’t know, but what we do know, is that if it wasn’t for our fantastic team, mentors and our Real Estate Education, we could have been in a pretty big dill pickle of a situation!
We wanted to share this experience with our REAL Estate Investors, and any NEW eager investors out there, so you know what kind of people to avoid! Only work with people you are truly comfortable with!
Thanks for taking your time to read our first entry!
Feels good to be loved!
Until next time,
~Kate Babkova~
We Buy Houses 911.
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