What would you do in this situation?

Question

I am hoping to get some advice on how to proceed in a situation that is very upsetting to me. I came across a property recently with significant fire damage and an opportunit to puchase it. Being new to this industry and my market, i thougt it would be best to put it under contract and wholesale it to an investor who rehabs this type of property.

I contacted a fellow investor that i had met s few times and told him about the property and my intentions. He said he was interested and would meet me at the property to see if worth moving forward. I did A Lot of initial due diligence & had all the relevant info about it. When i got to the property, he had already knocked on the neigbors door, gotten a ph. number for the owner and handed the neighbor an envelope. When i asked what was in it, he said a note to the owner with HIS ph. number to reach HIM! And no he would nit share the owners number with me. He then said thanks for the referral & I'll keep you in the loop. I told him it was definitely NOT a referral and he knew that not only by our previous conversation, but by the email i had sent him the nigt before which clearly statred my intentions to wholesale.

Before you ask, no we did not sign anything together, which was probably my second mistake... My first was trusting him in the first place.

My questions... 1-do i have any recourse against his actions? 2-what would you do?

Thanks for any advice.. And yes i am going to add this to my lessons learned notes! I'm just horrified by this man's behavior. I can't imagine how he sleeps at night?

David Niles · Answer

I would never subscribe to being anyones doormat, while I wouldnt spend much time burning and stewing, I would definitely make sure anyone I know and they know in the business are aware of this clown and his practice.

J Scott · Answer

I'd probably go this route...  :)

Though, while I agree you should be pissed, it's also a good lesson learned.  You made a mistake, he was an a**hole...

Braden C. · Answer

You learned a very good lesson, don't market properties before you have them under contract. Don't feel bad, a lot of people have done the same thing. It stinks and feels terrible but just take it as a learning experience and move to the next deal.

Steve Babiak · Answer

You did not have a contract on it, so you had no legal interest in this deal.  You did "bird dog" it for him, so try to get two things out of this: "bird dog" referral reward, and to learn the biz by having permission to observe the rehab.

Or you could be spiteful instead.

Dawn Anastasi · Answer

You told him about your intentions but didn't put anything in writing.  Unfortunately, he took advantage of you.  I don't think you have any recourse except to not work with him again.

David Niles · Answer

Good for you Sunny, glad it at least left you feeling somewhat better and the dirt bag got no further ahead.  Karmas a bitch sometimes.   It is sad when these older houses with character give way to the newer cookie cutters.

Sunny Jo Gardner · Answer

Good advice Wayne  Woodson, Thanks!

Just a little update... since this happened, I have moved on. It's been almost 3 weeks since I've heard from that other investor until yesterday when I received TWO emails. In my opinion, the first one was meant to pacify me and butter me up as it was an email that he sent to his title company and copied me on, asking them to set me up with an account so I can get property information. Sweet! I'll take it... it's the least I deserve after what he's done to me. Get ready for email #2!

Email #2 had the usual blah blah courtesy speak and then the poor me part of it... "tried to contact owner, can't reach him, has a voicemail & I left message, kept calling but no reply. Owner lives with mother, here's her name & phone number. Perhaps you can try & have better luck, let me know".  (I can just imagine mommy rolling her eyes every time she sees his phone number come across her caller ID and yet another voicemail from him -remember, the owner lives with his mother now that his house is inhabitable).

Are you kidding me??!! Just how stupid does this guy really think I am? (Ok, that was a rhetorical question, LOL).

On the plus side... As I left for work the other day, I saw the owner's contractor standing out in front of the house and a big ol' dumpster.... getting ready to haul off some debris as requested by the city I imagine. It was gone by the time I  got home and so was some of the debris. So sad that this house is not salvagable. It has a lot of history, built in the 20s. I just hope that the new house built will have some of the old town charm to match the rest of the neighborhood.

Wayne Woodson · Answer

This thread serves as a great and very valuable lesson for any new wholesaler starting out. That lesson is "before you market a property always get a contract on it". The guru's won't admit this but people DO go around wholesalers. This hit home with me as I've had both buyer and sellers do it to me.

Account Closed · Answer

Sunny Jo Gardner  It sounds like the investor acted badly and not in good faith. But I'm confused why you say you had an "opportunity to buy" the property if you didn't even have seller contact info?  What was the opportunity, exactly?  You also say you had "worked out an extremely fair deal" that you were planning to offer....but you didn't even have the contact info?  We don't even know if the seller will sell to anyone, do we?

For the future, be advised that doing anything that calls attention to a property will attract the attention of other investors.  In hot SoCal markets there are investors prowling the streets every day.  :)  If this property has visible fire damage from the street, there are likely lots of interested buyers and it appears the neighbor has noticed this as well.  If you get a lead, especially a vacant property lead, be careful about drawing any attention to the property while you are there.  If another investor drives by a house with a car parked on the street, and a woman with a cell phone walking around the outside, they'll be looking up the property asap.  Trust me on this one.

I'm not sure why you have to walk away from this.  Why don't you contact the seller and see what you can do?  Feel free to contact me if you want help to find the seller.  Don't worry, I don't want your deal, but think this one is worth following through on as it might be educational.  It's never over till it's over.  We have no way of knowing what kind of deal other investor's are offering to the seller.  More importantly, if there are complications that other buyers don't know how to deal with, then the buyer pool is that much smaller.  That's where I like to place myself.

As for the investor:  if he really is the owner of the largest REI club in a So Cal county, then we would know who he is.  Can you say which county?

Brian K. · Answer

Sorry to hear about what happened to you, thats pretty low what he did.  Just keep in mind that time has away of dealing with jokers like this.  But you need to get back on the bike and keeping riding.  Like the others said maybe give out his name so others are aware of his pratice.

What would you do in this situation?

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