All Forum Posts by: Jason Hartman

Hi Eric Dubrule

I've done several successful income property partnerships over the years but proceed with caution, especially on pooled deals. There are a zillion ways to structure but the first question is - can you do the deal without a partner? If so, it will dramatically simplify things and probably reduce your risk. If the property is too expensive, can you find a less expensive deal that you can do solo? It's just easier if you can do it. I did a blog post on it years ago and it still rings true:

Wisdom from my 92 year old grandmother: “The hardest ship to sail is a partnership.”

That leads us directly into my 3rd Commandment Of Successful Investing. Thou shalt maintain control of your investments. Don’t put the reins in another person’s hands or any non-transparent investment vehicle.

The name Bernie Madoff ring a bell recently? Though renowned as an investor with the magic touch, who really knew what he was doing? Yet people fell over themselves in a headlong rush for the double digit returns. Nothing wrong with double digit returns. We like them here but Bernie’s little $50 billion Ponzi scheme illustrates the critical nature of this commandment perfectly.

Does that make you a control freak? Who cares? You need to be a control freak, in this case. A nicer phrase would be direct investor.

By the way, Madoff’s rip-off involved…all together now…stocks. Don’t be in stocks. Be in income producing property and guide the portfolio yourself. The three major problems with relinquishing control of your investments are:

1. You might be investing with a crook.
2. You might be investing with someone who is incompetent.
3. You could get dinged with a large handling fee to manage your account.

Any or all three of these factors can and do take place on a daily basis. Unfortunately, all investment industries have their share of unethical, incompetent, and greedy people sitting across the desk from you with a crocodile grin and palm held out. Don’t play their game. Maintain control of your own investments.

@Eric Dubrule

Do the following agencies (all unConstitutional, mind you) strike you as needing law enforcement?

•The U.S. Department of Education
•The Bureau of Land Management (200 uniformed law enforcement rangers and 70 special agents)
•The U.S. Department of the Interior
•The U.S. Postal Inspection Service (with an armed uniformed division of 1.000)
•The National Park Service (made up of NPS protection park rangers and U.S. Park Police officers that operate independently)
•The Environmental Protection Agency (200 special agents)
•The U.S. Fish and Wildlife Service (224 special agents)
•The National Oceanic and Atmospheric Administration

“The whole notion of police operations these days, that they’re dressed to kill, that they’re up against an enemy, is wrong. Citizens are not the enemy.”

@Tim Norris

Thanks, I'll stand by. I know @Sara Liskey has been referring clients to you too. I hope to see a good resolution.

@John Horner - Those numbers look great but do you experience a lot of collection/eviction problems with the lower priced properties?

It's pretty scary that America is becoming a police state!

@Tim Norris - Thanks for the clarification; however, it concerns me that your company is "passing the buck" to some other unknown company. That may be okay so long as the insured knows who is accountable and has the opportunity for direct communication with the decision maker so it's not some faceless secret committee. If the insured believes they are the victim of a case of insurance bad faith, against what entity/party would they file their claim?

PS - The link you posted didn't work but I'll try it from another computer.

I have been pleasantly surprised at the ability to self-manage (without a property manager) properties long distance. I'll usually have a good local real estate agent contact and will hire them to do the walk-thru, photos, lease ups, etc. between tenants but not the monthly management. This has worked pretty well over the years with a portion of my portfolio. Do any other investors have experience, ideas and tips on this? Thanks!

@Tim Norris

I appreciate the response and appreciate what you're saying. I think the problem lies in the way the policies are structured. Please correct me if I'm wrong but my understanding is that your firm contracts with a large insurance company to provide pay large losses while the bottom part of the policy, for small losses, maybe under $25,000 or so, is actually covered by your company as it is self-insured.

Like any good business person, I'm sure you want to cut costs and keep payouts to a minimum, nobody would blame you for that but it does put your company at odds with the insured, right?

Pics are a must - just added mine.

I invested a significant amount of money with PIP West (Don Fullman and Charles Sells) and had a bad experience. As I see it, it's a long story but the end goes something like this...

In the beginning stages it seemed to work for awhile, maybe two years or so, where I invested and got some checks back; however, it was a disaster the end.

Here's the most blatant part, I gave them and their lawyer $17,500 to foreclose on 10 properties. They told me I had to wait about two years before I would know the status. When I didn't hear a thing from them for a long time, I tried to reach PIP West (Don Fullman and Charles Sells) via repeated phone and email to no avail. After numerous attempts, I was finally successful (calling from a number unknown to them) but they basically told me that I had lost all my money, and lost the opportunity to foreclose on the 10 properties (a loss of the substantial profits they projected), even though I paid them $17,500 for this and they, as my agent, were supposed to be managing it with a fiduciary responsibility to me.

When I asked a few simple and polite questions via e-mail, Charles Sells told me I had to deal with their lawyer who did not respond until my lawyer got involved. After several go arounds and a lot of wasted time/money, their lawyer was essentially non-responsive to the actual issues at hand.

As it turns out, the lawyer they referred their foreclosures said he doesn't do business with them anymore - I wonder why???

Also, they have a very tricky contract/arrangement as Don Fullman lives in and dealt with me in Orange County, California but Charles Sells lives in South Carolina while their contract calls for arbitration in Georgia - totally weird and leaving no good recourse.

There's more to it, but that's the basic outline from my, and my lawyer's perspective. Did I get ripped off?

@Shera Gregory @Vania Castillo