All Forum Posts by: Aaron Mazzrillo

I've heard of people getting cold feet, but using the age of appliances as an excuse to mask fear?... That's a new one to me.

This is the newbie dilemma - you're so grateful someone actually wants to live in your rental and pays you for it, you feel obligated to give a present at Christmas. My advice is don't do it. You provide a safe house/apartment. They pay you rent. Don't make friends with your tenants. Be friendly to them, but they are your customers. The number one rule of landlording is Do not rent to family or friends. Your grocery store doesn't give you a gift for buying groceries. Or the gas station. But if the tenant only had enough money left over to buy food and gas OR pay rent, guess where your rent money would go? 
There is no need to reward people for doing what they are contractually obligated to do.

You should always practice on leads when starting out. As for the addition, only make an offer based on the value of the property as it shows on the tax records. For example, let's say it is a 3 bed, 2 bath house, but they added on 1 bed and 1 bath making it into a 4/3. You make an offer based on it being a 3/2. In your rehab budget, you factor in the cost to demo the unpermitted addition and convert the house back into a 3/2. 
Now, here is where you can make some money...
If the work was done well, you may be able to get it permitted as a 4/3. Depending on where the house is located, the building dept may request a set of plans, make you open up walls to look at framing & electrical, but the cost to do all that would be less than doing the addition and then you could get it permitted as a 4/3 and sell it as a 4/3.

From my experience, and I've done a lot of these types of deals... doing one now, I mostly just convert them back into what they are supposed to be and retail them.

Is this a question, an advertisement, or just some random thoughts? 

I'm not going to take you under a wing, but I'll answer any questions you have. You probably don't need to go to any seminars. Most of them are just a bunch of rah, rah anyway. (I've been to more than 100.) I've wholesaled 100s of houses. I don't count. It's a lot. 

 I never told him to stop talking about the guy. I even gave him the link to the FBI's website. The best course of action is to report him and move on. Being the warning signal to other investors is admirable, but it is a low paying job. As in no pay. It is a no paying job.

Sending repeated texts, calling and leaving voice mails, sending emails, then going on social media for some keyboard justice is scarcity mentality. These are emotional decisions you are making. These are actions taken by people who are terrified to lose money. Like there is no more available to them. They must "get back" what they lost. So they squander their precious time chasing lost money. You can keep heading down this same course of action, constantly getting ignored and lied to, or you can have an abundance mentality and a wealthy mindset and make a business decision.

Wealthy people lawyer up and prosecute when they are lied to and stolen from. Your time is too valuable to chase this lost money. It's gone. Sue this guy, file a complaint with the FBI, (you said you wired him money, so wire fraud seems like a good contender.) Then use your time to chase new more profitable ventures and make new money.

I owe MILLIONS of dollars to my friends and they never miss a payment, never mind receiving a payment even late, and they never don't get an immediate return text or phone call from me when they want to talk to me. I have a responsibility to them. I even have a large life insurance policy in case something happens to me, so my wife can make sure everyone gets paid back. You think any of them are jealous of my success? You think they'd have anything bad to say about me? I'm their best f'ing financial friend!!! They want me to be successful, number one so I can pay them back, but also so they can keep lending me more money and making even more for themselves.

Ripping people off and then paying victim is a psychological profile I've seen countless times in this industry. People who lie and steal belong in prison. Get your judgement so you're first in line when assets are sold. Otherwise, it will keep going again and again until someone else takes action and then they are first in line.

We had a guy operating here in SoCal, who lived in Utah, but flew here every month running a real estate club. That dude took people for like $3.3M. His name is Shawn Watkins. He acted exactly like this. I knew some of his victims and I kept saying the same thing; Stop chasing lost money. It is FAR easier to spend your time chasing new money. Call the authorities, put him in prison and move on. The money is gone. It isn't worth your precious time "getting it back." You can easily spend that time drumming up new business and make more. 1099 him for it, write it off on your books, and get on with your business. Finally someone did contact the authorities and the FBI got him, and now he and his partner are in prison, he has a huge judgement against him, and he's barred from doing business in real estate ever again.

If you play this game long enough, you will eventually lose money. Either from your own bad decisions, or from decisions made by others for you, but you should never lose money because of misrepresentation or outright theft. I've lost money a bunch of times. Most recently just the other day in fact. A few months ago I was on vacation and my main contractor let one of his subs move into a vacant property he was working on because he was having a lot of equipment theft and vandalism issues at night. After my new tenant's psycho hoarder wife destroyed my property, smashing all the windows and bringing mountains of trash back to the property, I finally got possession last Wednesday. That decision by my contractor has cost me about $5,000 so far. In this case, it was just bad judgement on the part of my contractor. He was trying to easily solve what he thought was a complex issue. Now, had he let the guy move in, collected the rent, and not paid me, I would have sued him and put him in jail without hesitating.

Now that you're done reading this, file a complaint:
https://www.fbi.gov/contact-us

For further reading, if you're interested...

https://www.justice.gov/usao-c...

The most interesting point of this post is that every time I hear or read about someone getting ripped off in real estate, there is always this long drawn out belief in all the lies that eventually everything will be made whole. So much denial. Sucks you had to go through this. Just interesting from a psychological perspective that many people who get taken go through the same process before they finally take some action. And, some even believe eventually they will be made whole, but that is obviously not the case here.

@Natalia Eyler I don't go very often, but still going strong:

Famous Tuesday Lunch - Every Tuesday Networking, Partnership Opportunities, Deal Making and Kind of Good Food
Grand Buffet, 12 Rancho Camino Dr., Ste. 103, Pomona, 91766
The meeting is free, but you buy your own lunch

That post was copied off my page. I wrote it when the meeting was located at a different restaurant. I don't think the food looks very good at the new restaurant, but that's just personal preference. I'm not a fan of buffets.

@Cesar Rangel Don't call title companies. Call escrow companies.