A Real Estate Investor’s Family Lets Him Down

I was looking to take a break when my Cell phone rang. I looked down and saw that California Prefix attached to the number. You know how we Oregonians Love the California Buyer’s? Sam was all excited. He had seen a listing I had advertised on Craig’s list and wanted to know more about it. Unfortunately for Sam, like most homes that are well priced I had taken an offer the previous evening. This one was now sale pending.

Sam and I hit it off on the phone. He was intent on buying investment properties in Portland. The followind day he flew to Portland we met and began looking for properties. We really hit it off well but did not see any properties that first day that met his needs. Sam went home the following day. In the meantime I set him up on my Home Buyers search Tool at House_Hunt_Portland a web site developed for proactive Buyers.

The following day I was looking at a group of Fixers that I had pulled from the Multiple Listing Service ( RMLS ) and a few For Sale by Owners ( FSBO”S) when the phone rang. It was Sam and he was all excited about a fixer home that my web site House Hunt had just sent him. I drove over to the Vacant home and took some pictures and a short video. shortly thereafter I had Sam back on the phone.

Sam decided to make the offer right then and there. So I did a conference call with the Listing agent, and the Seller. We hammered out the details over the phone and within minutes Sam had bought his first home in Portland.

The home Sam purchased was a modest fixer upper. Sam decided to enlist the help of his brother-n-law Toby do some work on the first house and to eventually help manage his properties. Toby was a little bit of a slacker but he was family. Sam would often talk to both Toby and myself about the progress. I made the best of the situation preferring to converse with Sam by phone while all the time keeping Toby in the Loop.

Over the Next few months Sam , Toby and I found 3 other homes which Sam purchased as rental properties. Toby’s work on the original home was going very slow while the other cosmetic fixers were still waiting to be started. Finally Sam called from southern Cal. and asked if I could go over to the house and check it out for him. I did and when I arrived I found no one there and still a significant amount of work yet to be started. Sam was upset. It seems as if none of his relatives, Toby included would tell him what the condition of the home was or when would it be finished . Toby just kept asking for more money. I walked through the project describing and photographing the condition. I could tell Sam was Smoking Hot.

Over the next few weeks Sam flew to Portlandon 3 sepearate occasions and it seemed as though things were starting to smooth out. Sam however fell ill after his last trip and I was left to communicate with Toby and Sam’s wife Nella ( Toby’s Sister ).

We were only a week from closing on Two more homes when Toby and Nella asked to have a meeting with me. When I arrived at Toby’s home they began to summarize the Sales that we had done so farand the business that they hoped to do in the future. I thought the momentum was going well and it appeared they were starting to come into their own.

I felt that this was a great basis for our future work together until Toby said ” So we need you to kick us some money back after closing or  however you want to do it “ I wasn’t totally sure if I understood what they had just asked as I was still all caught up in the euphoria of the previous conversation. I asked them to repeat what they had just said.

No doubt about it. Now that Sam was sick they had decided to build themselves a little nest egg , off of my earnings. I quickly nipped it in the Bud and notified them that it was illegal. ” We dont meen on these current transactions they said but certainly on any future deals. “ I reiterated that it was illegal, and did not bring up the subject again.

Some 3 weeks later I got a call from Sam he sounded very weak and wanted to know how things were going. He informed me that it was probably going to be a rather lengthy recovery from his illness but he wanted to keep rolling ahead with more purchases. I could tell he was still really sick. I did not want to upset him by telling him of Toby and Nella’s previous plan. I decided to handle that on my own if it came up again.

It came up all right. This time they had a list of Agent’s ( according to them ) that had no problem with the kick-backs. Tey were adamant about it and were not interested in bargaining further. I asked them if that was their final decision and they said that it was. I thanked them for there past business and turned around and left.

It was about 5 months later that I received a call from Nella. Sam had passed on and Toby had taken a couple of the houses from her by manipulating her into signing the deeds over to him while she was trying to nurse Sam back to health. Apparantly Toby had left her only the properties that needed a lot of work and would be a challenge to sell. I asked her what if anything I could do for her. She wanted me to put the remaining homes on the market. I told her I would prepare a market analysis and email it to her later that evening.

Bright and early the next morning Nella called me and said that she had reviewed the paperwork and all looked fine except the Commission.  She wanted me to either reduce the commission or kick-back a percentage after the sale concluded. I told her in as polite as voice as I could that I am a professional and I could not participate and wished her well.

The last I heard Toby had manipulated the remaining 2 homes from her and had them tied up in some sort of investors scam.