“Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.”
As a student of income property investing, Solomon Success founder, Jason Hartman, has (sadly) seen his share of real estate scams come and go. The lure of the big, quick strike is catnip to those who haven’t internalized biblical messages like the one in today’s proverb.
For some reason, real estate has always been a target rich environment for those who would separate desperate, gullible people from their hard-earned cash. One popular tactic is offering a high-priced seminar that is nothing more than a thinly veiled upsell to an even more expensive seminar or coaching program. While perhaps not technically fraudulent, it treads the fine line of disingenuity and certainly should inspire no faith in the person making the presentation.
Here are the tactics Jason suggests to avoid becoming a get-rich-quick real estate victim.
1. Deal with local people you can meet and greet – If you remember nothing else from this post, keep this one in mind and you’ll avoid 99% of Internet scams. Scammers like to do their dirty work protected by distance and obscurity.
2. Don’t send money to strangers – A common Craigslist scenario has scammers copying entire real estate listings and trying to collect an upfront deposit from the unwitting buyer. If a person or organization you don’t know anything about asks you to send money, DON’T! This is a time-tested scam tactic.
3. Craigslist is NOT in the real estate business – Craigslist is an amazing website but it is really nothing more than the largest garage sale in the world. Do you buy real estate at a garage sale? We hope not. Craigslist does not handle payments of any kind and they certainly don’t offer an eBay style “buyer protection” or “seller certification.” Anyone that tells you they do is lying.
4. Hold your financial information sacred – In this day and age we wish we didn’t even have to take the time to say this but you should never give out critical financial information like your bank account number, social security number, credit card number, etc to anyone who contacts you by phone, e-mail, or postal mail. Legitimate organizations simply do not operate like that.
And always keep in mind the wisdom of a certain proverb: to create real wealth (unlike Bernie Madoff), expect to work for it (Top image: Flickr | Abode of Chaos).
The Solomon Success Team