Trust But Verify - Even on BP!

[Patti Robertson]

All experienced landlords and real estate investors have learned that as much as they may trust the source of information, whether it be from a tenant, contractor, seller, consultant, etc. we still have to verify experience and informatino to protect ourselves.  It amazes me how gullible investors can be.  Just because someone calls themselves and expert, does not make it so. 

A perfect example - I just read a BP post from a licensed agent in my market who claimed to be an agent who "specializes in investment properties." I had never heard of him, so I looked him up in our MLS and found he has literally only ever had one client who bought a small package in one transaction and a single property in another transaction, yet he calls himself an investment specialist, and gullible people believe it. Technically he didn't lie. 100% of his clients have been real estate investors - 1 out of 1.

How many posts have we seen about turnkey companies who are ripping people off?  Buyers make the mistake of trusting the "expert" because of their ad in the glossy magazine and don't go and see what the property they are buying, or at least hire an independent inspector to give them accurate information. Before doing business with someone it is perfectly OK, and prudent, that you ask about their experience and put eyes on your future asset.

I see A LOT of "mentors" in today's market who failed at real estate investing and are trying to make their come-back by pulling money out of the pockets of newbies who are afraid to come across as rude by asking important questions.  Most people wouldn't buy a used car without checking some sort of car facts to find the history, yet they hire people without checking their real experience level or the court records to see how often they have been sued, for what, and what the outcome was.  

I'm not saying honest people don't get sued, because they do.  (Ask me how I know. ;)).  Anyone doing real estate at a high volume will eventually get sued over a contract dispute. An honest person who loses a case pays the judgment the Judge orders though.  Search the court records for your agents, property managers, contractors, private lenders, etc.  Search both their company names and personal names. You may be surprised at what you find.  Hopefully, if you are being pitched by someone exaggerating their experience or who has self serving intentions, you will be able to figure that out before you get financially connected to them.

[Jay Hinrichs]

Absolutely there is a very irrational thought process that someone being a BP member puts them in some special category as trust worthy.

If your handing over your dollars to someone.. treat that someone like you would a tenant.. I mean look at all you landlords what you do to protect your 800 dollars a month rent..

what do you do?

put the poor 30k a year person through.

1. credit check

2. criminal back ground

3. other screening just to make sure you get your 800 bucks

now spend 100's of thousands with someone and do Nothing other than maybe a little on line searching..

For me I always have my credential package available upon request.. Now this is for mid 6 figure investors not someone wanting to use me as an agent or invest 50k.

this includes.

1. Credit

2. criminal background.

3. Letter from my banker of 25 years stating FACTS IE how much liquidity I keep in the bank.

4. Proof of deals done.. ( which is easy its all public record)

5. Copies of my NM LS mortgage bankers license and how to look me up on NMLS  copy of my CA brokers license and how to look me up.

Etc etc.

Having been a HML for decades you would be shocked at all those nice folks that talk a good game and have back grounds that may not be criminal but are financial rap sheets LOL..

Agents have to start somewhere.. puffing experience or other things is common.. I don't see many agents saying hey I am new.. they all put their best foot forward..