Hello,

In chapter five of Rich Dad Poor Dad by Robert Kiyosaki, he briefly recounts how he made $40,000 with 5 hours of work by buying a "courthouse" property, listing it for less than market value, having the buyer sign a 10% promissory note, and then have the buyer assume all liability.

Can someone explain to me what exactly he did, and whether it is legal anymore (especially in Idaho)? Did he assume a mortgage on the home and then have the buyer do a "wrap around mortgage" with the promissory note? Who paid the $20,000 original cost of the home? Does RK have any liability regarding this house if the buyer fails to pay? How does that work?

For reference, here is the section: "“I began shopping at the bankruptcy attorney’s office or the courthouse steps. In these shopping places, a $75,000 house could sometimes be bought for $20,000 or less. For $2,000 which was loaned to me from a friend for 90 days for $200, I gave an attorney a cashier's check as a down payment. While the acquisition was being processed, I ran an ad advertising a $75,000 home for $60,000 and no money down. The phone rang hard and heavy. Prospective buyers were screened and once the property was legally mine, all the prospective buyers were allowed to look at the house. It was a feeding frenzy. The house sold in a few minutes. I asked for a $2,500 processing fee, which was gladly handed over, and the escrow and title company took over from there. I returned the $2,000 to my friend with an additional $200. He was happy, the attorney was happy, and I was happy. I had sold a house for $60,000 that cost $20,000. The $40,000 was created from money in my asset column in the form of a promissory note from the buyer. Total working time: five hours.”"

Thanks!

Morgan