Get rich on real estate scam
Attorney Tom Olsen: Chrissy let's talk about a minute that we all hear, you and me, the listeners out there, about how you can get rich quick on buying and selling properties. Right? We hear about these workshops and seminars all the time where they want to take your money, right?
Chrissy: Absolutely, yes.
Attorney Tom Olsen: A few months ago I had a man come to me who had attended one of these workshops, and he was convinced. He knew the answer now that he had attended the workshop and the seminars and probably paid-
Chrissy: A lot of money.
Attorney Tom Olsen: - Who knows how much, right? I had to blow holes in his whole-
Attorney Tom Olsen: - business plan about why this is not going to work. Really, what it would have involved would have been going out and finding some very naive, ignorant, know-no-better-
Attorney Tom Olsen: - property owners. One in a million you might find a property owner that would go along with this scheme of how he was going to make money on their property. He was very disheartened. I didn't hear from him again.
But then yesterday I had a client call me who said, "Tom I got somebody making an offer to buy my property and I want you to take a look at their contract before I sign it, okay?"
What it was, was one of these people who had attended one of these seminars and workshops how to get rich on buying and selling real estate and so now I get to see from-
Chrissy: The contract.
Attorney Tom Olsen: - the other perspective, from my client who is the owner about to sell this property about how this is going to go down.
Chrissy: Right, and you get to actually look at the contract.
Attorney Tom Olsen: Yes.
Chrissy: What did you think?
Attorney Tom Olsen: Of course when I got done telling my client, the seller, the owner of the property, he goes, "Tom I'm so glad I-
Chrissy: Came to you.
Attorney Tom Olsen: - talked to you before-
Chrissy: Did anything.
Attorney Tom Olsen: - before I signed this thing."
Chrissy: Right. Oh, my goodness. Wow.
Attorney Tom Olsen: Here's what it was. Because first of all, my client, the owner/seller of the property is saying, "Well he told me all--"
When I'm telling what this contract actually says, he's going, "Well he told me this, and he told me that." Well this is not anywhere within this two-page-- This is not a standard FARBAR contract, this is a two-page Word document crafted to serve this person who had attended this workshop on how to get rich on real estate, and is completely contrary to what he's being told.
But here's the dealio [sic] on this two-page document that my client was not going to sign because he didn't know better. He thought it was a quick sale, all-cash deal, he’s out, right?
Chrissy: But that's why he did the right thing and came to you.
Attorney Tom Olsen: Exactly, yes.
Chrissy: What did it say?
Attorney Tom Olsen: Two pages, all right? It says that, number one, that the buyer has got 90 days to close. He has a complete contingency that on day number 89 the buyer could back out if he wanted to, the buyer was not obligated to put up any good faith deposit, that as soon as the contract was signed, the buyer, the prospective buyer, would have had full possession and control of the property. It stated right in there that the buyer's going to immediately turn around and list it for sale and try and find another buyer. Really what was happening was-
Chrissy: No money is exchanging hands.
Attorney Tom Olsen: - no money is exchanging hands. Really what was really happening was that-
Chrissy: It's like a listing agreement.
Attorney Tom Olsen: My seller had agreed to a $110,000 purchase price. We agree to that, that's not an issue, but what this contract was really all about was giving the buyer 90 days to get out there and try and find somebody else who'd pay more than $110,000 for it. If they didn't find somebody who'd pay more than $110,000 for it-
Chrissy: They're off the hook.
Attorney Tom Olsen: - deal off, and my guy's just wasted 90 days sitting around twiddling his thumbs.
Attorney Tom Olsen: Wow is right. Again the part of the dealio [sic] was my client is telling me-- I'm telling my client, "Look this is what the contract says. Here it is, black and white." Then my contract goes, "That's not what he told me. That's not what he told me."
I said, "Okay, go back to this buyer and say: 'Look, we agreed to $110,000 as a purchase price. We know we got that much. Write me a contract that says all cash closing, no financing contingency, no contingencies, 30-day close,' and see how quickly your buyer runs away."
Gives him 90 days to get out there and find somebody who will pay more than $110,000 bucks for it. If they do then great, they made a profit, if they don't, then my client has just wasted 90 days.
He knows better now, but again when I saw that, the first thing I thought of was, well this guy went to one of these workshops and said here's a two-page contract. Go find, there's a thousand buyers out there, there's a thousand sellers out there-
Chrissy: You just approach them.
Attorney Tom Olsen: - there's a thousand opportunities for you to make this work. This deal, you know 999 sellers would know better than to sign this thing, one out of a thousand might be willing to because they don't know any better.
Chrissy: No, and that's where they're counting on getting rich quick.
Attorney Tom Olsen: Yes, not on my client. Maybe on somebody else, but not on mine.
Chrissy: Well hey, if anybody out there even gets a glimpse of something like this, they better have you review.