All Forum Posts by: Ed Brancheau

I haven't had this problem in real estate yet (and from what I hear everyone has a horror story so it's kind of part of the business, unfortunately) but I have had it with my other business. I'm an SEO and online marketing expert for real estate professionals and I had a web designer that basically owed me $20K in services.

Throughout the whole process, I was careful to make it seem like if he did any of the things below that I would undo whatever I did. However, it was never my intention to undo anything. I just didn't want to make it possible for him to sue me.

First, I wrote a negative review about him on a very popular niche-related site (like BiggerPockets in your case; just be careful if they have a common name so that you don't hurt someone unrelated) and his business using this title to make sure that it ranked in the top 10 any time somebody searched for him or his business:

"Joe Blow of Joe Blow's X in San Diego, CA: An Honest Review After He Didn't Finish the Job AREA CODE + PHONE NUMBER"

I was careful to make sure that I just stuck to the facts and didn't call him names or use words like "scam" or "ripped off." It was basically, "I paid him to do X, Y, and Z and he took my money but didn't do Y and Z." I didn't want to give him the chance to sue me for slander or something.

As an SEO expert, I'm telling you that a post of 150+ words with that Title, including city, state and phone number, will get ranked on page one of Google pretty fast so that any time somebody searches for "Joe Blow review" or something similar, it will probably be on page one.

I waited a few days and made sure that it was ranking on the first page of Google.

Next, I wrote him a letter covering everything below and FedEx'd it because EVERYONE opens a letter from FedEx.

In it, I told him to search for "Joe Blow review". I was careful to make it seem like I would take the review down if he refunded my money BUT I didn't promise it because I wanted to leave it up so that everyone to know about what he did.

Regarding the first-page ranking, I sent him a link to an article explaining that 94% of customers research a business before they hire and I asked him how many customers he would lose because they saw that negative review.

Next, I told him that I had spoken with a really well-known law firm in San Diego. (I didn't technically lie because I did call the law firm and found out that they wouldn't take on cases with less than a $100K lawsuit.)

Then I went to the California State Attorney's website and threatened to report him. And I was really careful to not make it part of a deal that I wouldn't report him if he did pay because I wanted to report him.

Next, I shot a screencast video with Jing in which I told him that I would set up a Google Search alert. I "promised" that I would immediately respond negatively to everything posted about him and his business.

After about three negative responses that I emailed to him, he called me and said that he only had $18K left in his bank account and he asked if I would take $15K.

I was prepared to take the $18K (I couldn't care less if the A-hole was left broke) if he actually didn't have the $20K but my gut said, "He's full of ****. This guy has the $20K." So I pressed him and said, "No, I really want every penny back and I want a cashier's check overnighted to me or I will do what I said I would do. And every day longer I'm tacking on 5%."

I got a cashier's check the next morning for $20K.

Now, I did still give him negative reviews and I did report him to the California State Attorney.

I think you could try something similar and point out that if you have to take him to court, he's going to end up paying attorney's fees for both him, you and a whole lot more... maybe even go to prison for embezzling.

Finally, don't forget about the "time cost of money" and figure out what it's worth to you to get most of your money back quickly. If he owes you $50K, it might be worth taking $40K to be done with it. Sure it sucks to get taken like this but it might be worth the aggravation.

BTW, all of this took me a little over an hour. I think writing this post probably took longer. :-)  

I hope it works out for you.

Yeah, I think I know of a few that can help. They are all sponsors of the San Diego Creative Investors Association (SDCIA) which is a group you should join because they have tons of great info:

For lenders, try:

Bruce May
Trilion Capital
[email protected]
www.TrillionCapital.com
619-541-5082

Patrick Hayes
Pivotal Capital Group
111 Corporate Drive, Suite 270
Ladera Ranch, CA 92694

Thom MacFarlane
Security InterBank Mortgage
[email protected]
(858) 485-0462

Jared Newman
(425) 923-8069
[email protected]
www.cvlending.com

And for Property Management, try:

Colleen McDade
SD Rent Pros
(619) 884-0906
[email protected]

All of these people are constantly reminding vets to use their VA loans to get the best deals.

Kind of...

It depends upon they are and how far away they are from one another. More urban areas have to be tighter together... Maybe even less than a 1/2 mile. Whereas rural areas could be five miles or more.

Are you talking about Moreno Valley? North and South of the 60 could be totally different.

Hell, when I lived in LA, my apartment was in a pretty nice area but three or four blocks over there were hookers.

But yeah, $188 per sqft could be a deal worth talking to the neighbors to see if they've gotten any offers for their properties. that would show interest and value of the neighborhood.

Then get deal done that's subject to an appraisal.

That's a good question and I'm interested in hearing the answer as well.

Do you have a specific URL for that because I'm looking but I'm not finding it. Also, the most recent reports for San Diego are 2015. Is that correct?

It sounds like a good idea to approach her. I'd just tell her exactly what you told me.

Just know that a lot of older folks simply don't want to move. But maybe you could make a deal with her. 

You get to buy it from her at a severe discount because it needs repairs. Maybe rent her an RV or something that she can stay on the property while you renovate. Then, when you're done, she can move back in and rent it from you. Six months later you get to refinance and already have a great tenant.

Here's another option... Is the property big enough to add an ADU/granny flat? If it is, you could build it first and then she can move permanently into that at a lower rent. Or you build it first, have her stay in while you renovate the house, let her move back into the house at the previous rent, and then rent out the ADU (college students are great for those.)

So, I ended up here because I just heard BP podcast episode #339 with Frank. I think it was recorded after this lively discussion. It was interesting and he did not come across as he does in the John Oliver segment or his training courses. Everything he said was valid.

But watching John Oliver's video and reading the entire article that Frank linked to shows that even he knows that he's attracting a number of bad apples to his courses. The fact that he half-heartedly told them that they shouldn't significantly jack up their rents while telling every that they're way under the sweet spot of $495 per month proves the point.

And while one could say that he's not responsible for what people do with the information he's giving them, he needs to speak out more and louder.

Plus, what he said does make him seem like a bad apple whether it's true or not. 

There certainly ethical and unethical ways for MHPs to be run... whether they're legal or not.

It seems to me that @Gail Travers MHP used to be run ethically. Now, by drastically raising the rent, while legal, SCI is running it unethically. And saying that it's only $15 isn't really true when you average all of the new MHP owners.

I understand Frank's point that tenants have been vastly underpaying rent for years compared to the rest of the market but jacking the rent just because the former owner wasn't charging full market value isn't right either.

Plus, it's interesting that many commenters say stuff like, "Well, when you flip houses, you're charging more."

That's true. But here's the difference... I'm putting my money and hard work into it BEFORE I make my profit. And with rentals, I fix them BEFORE I raise the rent. I think it's odd that these MHP investors say that they need to raise the rent before making repairs.

Also, nowadays, if I still "rented" with my current income, a 5% increase wouldn't hurt me because it'd be the cost of one killer night out on the town. But back when I didn't have two nickels to rub together, 5% would have been three days worth of top ramen. Hell, even if you doubled my "rent" (can't be done since I own my home), while I'd be super pissed and start looking for a new place, I have more than enough money saved up to get me through a whole year of "double rent".

These people don't have that luxury.

And don't give me any of that "pulling themselves up by their bootstraps" or "they're lazy" non-sense because nobody is successful on their own and most of the people in MHPs either have two or more jobs or they retired after working for 40+ years.

Now, I'd like to believe that the Frank Rolfe I heard on the podcast is the true Frank. Yet, when I hear what he said in his own course, I have a hard time believing it.

Maybe the "Waffle House" comment was taken out of context, but I haven't heard any claims that his other comments were. If they were taken out of context, post them here so we can all make an informed decision. And if they were just stupid statements, own them, apologize, and don't make the same mistake.

God knows that I've said really stupid things in the past and I guarantee that I'll say stupid things in the future. Everybody does because we're human. Just try to correct the problem when you inevitably do say something stupid like... My Padres are going to win the World Series next year!

I have got to move to Lincoln! A duplex for $156K?! I can't even buy a one-bedroom studio for that price in San Diego.

How long does it take to get a real estate license in Nebraska? Here in California, it's like 150+ hours.

Hey @Louis Hamric! It's always great to declare your goals. And it's weird that your story pretty much mirrors mine... except I have a sister instead of a brother.

I too inherited a property about 100 miles away from my house in San Diego. I refinanced it, rented it out, and am buying a second rental right now with the refinancing.

It doesn't usually get cold in San Diego but... I'm feeling the BRRRR!

I've been tagging along with a successful investor here in San Diego and he hasn't been scared off by cracks in the foundation. They seem to be more common in California since the ground is harder and a little 3.5 earthquake can cause a crack.

Plus, he tells me that it can be good because it scares off a lot of other investors.

In fact, I had to repair a crack in my house's foundation over the summer and it cost around $12K. Would I let that scare me from buying a house that could be worth $1.1M if I could drive the price down because there are no other offers?

I mean, if I ignore the 70% rule and paid 80% of ARV and the foundation cost $50K to repair, I might still walk away with $100K profit.

BUT...

He told me that as a newbie, while the foundation experts are pretty good at estimations, we should pad any foundation estimate by at least 10-20% since we may not be able to take a huge hit if they're wrong.

And any preliminary offer you make should be contingent upon what the inspector says.

All in all, I'm not going to let cracks scare me off but you need to do what makes you comfortable. If you're not comfortable... don't buy it.