SS156: Land Sale Scams

SS156 Land Sale Scams

Land sale scams are on the rise. In this episode, Charles discusses what these scams are and how he has been directly solicited by scammers himself.

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Talking Points:

  • We don’t usually talk about scams on this show, but there is a scam targeting vacant lot properties, and real estate investors may be at risk.
  • If you have heard this show before, you know that my main business is purchasing large apartment complexes with passive investors. In addition, we also do real estate mentoring, but for years, we have had a home-buying/land-buying website that a real estate agent partner of ours handles; we receive an email when a new lead comes in, but he handles all the leads, the appointments, follow up, and everything else. However, over the past several months, he has had a dramatic uptick in fraudulent inquiries where people are trying to sell vacant lots they do not own.
  • When our partner brought it to my attention, I didn’t think much of it. I then read an article from the CT Insider (a Connecticut newspaper that I have linked to in the notes) and a Connecticut man whose family purchased the lot 70 years ago – returned to the neighborhood to find the lot cleared and a $1.5 million home that was still under construction, on the property.
    • The man filed a lawsuit, and the developers made a written statement saying, “we learned to our shock and dismay that Kenigsberg (the rightful owner), had not, in fact, sold the property to us. Rather, a third party had impersonated him and – through the carelessness and neglect of the various real estate professionals involved in the transaction – managed to list, market, and sell the property without anyone ever catching on.”
  • After reading this article, I was intrigued to see how these scams operated, so for a couple of weeks, I told my partner to let me call the land leads, and I learned a lot about what they say, what they request, and the story they all have.
    • Since the properties they were trying to sell had all of the owner’s information and property information listed on the county’s website, you could not trick them into asking for their name or address or when they bought it, hoping for them to slip up. Instead, I would ask them what they wanted for the lot (usually about 10% lower than the value mentioned on Zillow), and then I would ask how they would want to sign the documents if we agreed on a price.
    • They usually wanted the closing documents emailed to them (always a free email account), and then they said they would notarize them and send them in. It sounds like they had a fraudulent notary that would notarize the closing documents.
    • Next was that the actual property owner was always out of state. They never tried to sell properties with an in-state property owner (similar to the Connecticut story where the actual owner lived in New York).
    • They were never at their property owner’s address. When I told them we needed to send next-day the closing documents to their address, there was always an issue or story. For example, someone trying to sell me a vacant lot in Florida with a New Jersey address was in Indiana for their daughter’s wedding. Now, during his daughter’s wedding, he wants to sell some random vacant lot in another state.
    • This scam focuses on vacant lots that are owned free and clear. Having a mortgage would require someone to pay off that mortgage which would reduce the scammer’s profit and include additional parties in the transaction.
  • How to Avoid Being Scammed
    • Research the other party you are dealing with. If you are dealing directly with the property owner, check them out. If you are dealing with an agent, ask the listing agent about them, how they know them, how they found them, etc.
    • Speak to the supposed owner for a while, and ask them about the area where they live.
    • Be wary if you get passed off to another person. Scammers operate through a lead funnel, you start with someone low-level, and as you check more of their boxes, and want to sell, you are most likely going to speak to someone else who is higher up in their organization…the closer.
    • A difficulty unlike buying a house where you would schedule a walk-through, and that stops fraudulent sellers dead in their tracks since they do not have access to the house; a lot can be reviewed easily without the owner being there, so it may not be reasonable to request an out of state owner meets you at the property.
    • Send a letter to the property’s legal owner’s mailing address. I would send a letter next day air to them, tell them the situation and ask them to give you a call.
    • Request identification from the seller if they are signing anything. A passport is best.
    • Verify the notary they are going to use, and speak to them, or better yet, find a notary, and tell them, you have a notary in the area that you will be sent to their home to sign the documents.
  • I hope my learning experience helps you avoid being a fraud victim; I definitely will be a much more diligent investor since going through this, we have since added an IP/VPN tracking feature to the submission pages on our website, and the issues have been much easier to detect.

Transcript:

Charles:
Welcome to Strategy Saturday; I’m Charles Carillo and today we’re going to be discussing land sale scams.

Charles:
Have you always wanted to invest in real estate, but didn’t have the time, didn’t know where to find the deals, couldn’t get the funding and didn’t want tenants calling you. Since 2006, I’ve been buying income producing properties and great locations that provide us with consistent passive income. While we wait for appreciation in the future and take advantage of tax laws while we’re waiting and unlike your financial advisor, we invest alongside our investors in every property we purchase. Check out to investwithharborside.com. If you like the idea of investing real estate, if you like the idea of passive income partner with us at investwithharborside.com, that’s investwithharborside.com.

Charles:
We don’t usually talk about scams on the show, but there was a scam targeting vacant lot properties and real estate investors who may be at risk if they own the property or if they purchase these type of properties.

Charles:
If you’ve heard this show before, you know that my main business purchasing large apartment complexes with passive investors. In addition, we also do real estate mentoring, but for years we’ve had a home buying, land buying website that a real estate agent partner of ours handles. We receive an email when a new lead comes in, but he handles all the leads, the appointments, the follow-up and everything else. However, over the past several months, he has had a dramatic uptick in fraudulent inquiries where people are trying to sell vacant lots they do not own. And when our partner brought this to my attention, I didn’t think much of it. I then read an article from the CT Insider, a Connecticut newspaper that I’ve linked in the show notes, and a Connecticut man whose family purchased a lot 70 years ago, returned to the neighborhood to find the lot cleared and a million and a half dollar house was under construction on the property.

Charles:
Now the man filed a lawsuit and developers made a written statement saying We learned who our shock and dismay that the rifle owner had, in fact sold the property to us. Rather, a third party had impersonated him. And through the carelessness and neglect of the various real estate professionals involved in the transaction, managed to list market and sell the property without anyone catching on. After reading this article, I was intrigued to see how these scams actually operate. So for a couple of weeks I told my partner to let me call back any land leads that came in and I learned a lot about what they would say and what they requested and the story that they would always have. Now since the properties they were trying to sell had all the owner’s information, it was public and listed on the county’s website, you could not trick them into asking for their name or address or when they bought it, hoping for ’em to slip up.

Charles:
Instead, I would ask them exactly what they wanted for the property, which was usually about 10% lower than the value mentioned on Zillow. And then I would ask how they would want to sign the documents if they, if we had actually agreed on a price, if they usually wanted the closing documents emailed to, and they’d always use a free email account. And then they said they would notarize them, send them in. So it sounded like they had a fraudulent notary that would notarize the closing documents. Now the next was the actual property owner was always outta state. They never tried to sell properties with an in-state property owner, similar to the Connecticut story, where the actual owner lived in New York State and they were never at the property owner’s address. So when I told ’em we need to send the next day, you know, the closing documents to their address, there was always an issue or story.

Charles:
For example, someone trying to sell me a vacant lot in Florida with a New Jersey property owner’s address was actually they said in Indiana for their daughter’s wedding. Now during this daughter’s wedding, he wanted to sell some random vacant lot in another state. So the scam focuses on vacant lots that are owned free and clear. And having a mortgage would require someone to pay off that mortgage, which would reduce the scammer’s profit, and also it would include additional parties in a transaction. And it would really elongate the scam where you can sell something without a mortgage broker or without a mortgage pretty quickly. So how to avoid being scammed. Research the other party you’re dealing with. If you’re dealing directly with the property owner, check them out. If you’re dealing with an agent, ask the list an agent about them, how they know ’em how they got, how they were found them, et cetera.

Charles:
Speak to the supposed owner for a while and ask them about the area where they live. Be wary if you get passed off to another person. Scammers operate through like a lead funnel and you start with someone very low level. And as you check more of the boxes of you wanting to sell, you’re more likely gonna speak to someone who’s higher up in the organization. Really the closer, you know, better English, everything like that. ’cause Usually it’s foreign, foreign people that are running the scams a difficulty unlike buying a house where you would schedule a walkthrough and that stops fraudulent sellers dead in the tracks since they do not have to access the house. You know, a lot can be reviewed easily without the owner being there. So it may not be reasonable to request an out-of-state owner meet you at the property to show you a lot.

Charles:
But if you were showing a house, it would be very weird if you weren’t able to walk the property, send a letter to the property’s legal owner’s mailing address, and I would send a letter next day to them, tell ’em the situation, ask them to give you a call. I guarantee you someone’s gonna give you a call and ask you what’s going on. If in fact it is not the real owner you’re talking to. Request identification from the seller if they’re signing anything, you know, a passport is the best and verify the notary they’re going to use and speak to them. Or better yet, find a notary and tell them you have a notary in the area that will be sent to their home to sign the documents. And that usually stops ’em as well. Now, I hope by my learning experience helps you avoid being a fraud victim. I definitely will be a much more diligent investor since going through this process. And we have since added a IP VPN tracking feature to our submission pages on our website. And the issues have really been much easier to detect. So I hope you enjoyed. Please remember to rate reviews, subscribe, submit comments, and potential show topics@globalinvestorspodcast.com. If you’re interested in actively investing in real estate, please check out our courses and mentoring programs@syndicationsuperstars.com. That is syndication superstars.com. Look forward to two more episodes next week. See you then.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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