Be Careful With Whom You Do Business.

[William Glass]

I have been educating myself on my local market for a year and a half now and have a couple of buy and hold deals under my belt that I acquired in the last 6 months. A colleague of mine is interested in getting started and a mutual friend of his connected him with an agent/investor who had a listing in the Fort Myers area. He asked me to tag along as I have a bit more knowledge than him to help him vet the opportunity since this would be his first investment property. The listing agent has had the contract on this property since the first of the month but has not started marketing it or listed it on the MLS... A red flag from the get go. This agent gave some "off the record advice" about homesteading. What he said "off the record" is very illegal telling my colleague to homestead the property with FHA financing and then not actually living in the property in order to get the best financing terms. He said, "the longer you can keep the utility bills in your name the better."

He pretended to not know the exact rules/regulations are for FHA, but any investor or agent worth his salt knows FHA financing is for primary residences only and would never advise anyone to do something illegal like misrepresent their intent for the property. I was shocked that he would say that to us and I understand why real estate investors get a bad rap. It's because of instances like these.

Additionally, after going and pulling comps for my friend the property is about 40% above the fair market value and an absolute joke in terms of the rental and sales comps he mentioned in person. 

For anyone just getting started be cautious of people like this in the industry. It is ridiculous that anyone would advise a new investor to commit a felony on their first purchase for better financing terms. I am happy to see this "investor/agent" is not a part of the bigger pockets community and is someone I've advised my colleague to avoid moving forward. BE CAREFUL and use your best judgement about people...

[Chris Carson]

Personally, I would be filing a complaint with the DBPR. Agents like that give all involved in real estate a bad name. Not to mention that an unknowing buyer could be prosecuted criminally for relying on that type of advice.