Good Morning!
Getting back to work this week as a married man. What a great time we had at the wedding last week. I appreciate everyone who shared their congratulations last week.
Highlights:
- The $600,000 Real Estate Scam
- 43 Real Estate Investor Deals For Sale
- Selling $1.5 Billion of the $2 Billion in Apts (podcast)
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Weekly Wealth of Wisdom
We Nearly Got Scammed for $600,000!
“For wisdom is better than jewels, and all that you may desire cannot compare with her.” -Proverbs 8:11
You might remember my mention of a $600,000 deal we were anticipating funding in Hollywood, Los Angeles, CA 2 weeks ago. It turns out, if it seems too good to be true, it probably is. We were the target of a wire fraud attempt.
Here were the red flags:
- Unbelievable Deal – Our contract was for $600,000 on a property purchased in 2018 for $1.5M. Scammers will use this setup to suspend your disbelief at the opportunity being presented. A great example of this strategy is when con-man Lustig sold the Eiffel Tower in France – twice!
- Suspicious LLC Docs – The LLC Docs presented by the con artist had a 2024 notary date, but the property had been held by the LLC since 2018. The dates didn’t match up. Look out for details like this.
- Fast Deadline to Close – “Seller” was pushing for a 10 day closing. His reason was that he was going to lose a $100,000 EMD (earnest money deposit) on a deal in Mexico. He’s ready to sell this property at a $900k loss to avoid a $100K loss? This didn’t add up.
- Suspicious ID – The first & last name on his California license were in the wrong locations. Another red flag.
Even before we signed, I was on high alert that this was likely a scam. That original purchase price and the agreed contract price was just too good to be true. We signed the agreement anyway to do our due diligence. We did NOT wire any EMD to the title company. When we sent our local contact, there was a general contractor on site already who confirmed that our “seller” was NOT the owner of the property who hired him. Needless to say, we didn’t move forward and the scammer disappeared.
We found out later that the next few steps in this common real estate scam would have been an email from an account at a very similar domain name to the title company with the wire instructions. For example instead of [email protected], the scammer would use the email [email protected] to send their own wire instructions with their own contact info as the “call to confirm” information.
My own strategy when confirming wiring instructions is the google the name of the title company and see if the phone numbers match. If they don’t, I may take another step and skip trace the number on the wire instructions. These numbers must match somewhere before I call in order for me to send money.
Luckily, we avoided the $600,000 scam and I don’t know what it’s like to lose $600,000. Hopefully we all get a reminder like this to be diligent and NEVER fall victim to a crime like this.
Imagine Selling $1.5 Billion worth of Your Portfolio (podcast)
Dan French was recently on the REI Diamonds Show. He & I discussed his near-perfect timing of the multi-family real estate market before the market collapsed in mid 2022. After assembling a portfolio valued at $2 Billion, he & his partners made the decision to sell the majority beginning in 2019. They completed sales over 2.5 years of $1.5 Billion, leaving a portfolio of $500 Million of the best properties in the best locations. Listen to the story here.
Doing a Deal with Diamond Equity
Here’s What I’m Buying:
- Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
- Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
Here’s How to Passively Invest:
- Earn 2 Points & 10% Interest as a Private Lender on MY Deals.
Here is How I Run My Schedule:
- I only schedule calls for which I am prepared. If you’d like to schedule a call with me, please include the full agenda of what will be discussed in your email. These are calls I handle personally:
- Accredited Investors who can write a Check for $1M or more and are interested in exclusive partnering on Commercial Real Estate deals.
- Brokers, Wholesalers, or Owners seeking to sell the type of Commercial assets outlined above. I am the buyer.