Author Topic: Did my neighbor get ripped off for $8k?  (Read 2468 times)

Neo

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Did my neighbor get ripped off for $8k?
« on: April 15, 2017, 03:11:38 PM »
Background: I have a few rental properties and have done 5 real estate transactions in the past 12 months, so I think I know what I'm talking about, but want some other opinions before I start a sh*tstorm.

My neighbor knows I invest in rental properties and he was telling me about a deal he did with a friend. This is a close friend of his and their kids go to the same small school and church, so I want to tread lightly. The friend came to my neighbor with an investment opportunity. He had bought a house and needed cash investors to help him flip it. My neighbor gave him $8k and the friend said he would pay my neighbor back $10k when the house sold. Supposedly the house was purchased late last year and sold post-flip in January 2017. My neighbor has yet to receive any money from his friend, who explained that he deposited the proceeds from the flip in his bank account, but the funds were frozen due to the friend's involvement in a stock/pyramid scheme in which the friend was a victim.

Immediately this sounds fishy to me. I work for a major bank and have never heard of such a thing. Even if it did occur, I would think it would only take a couple weeks for the bank to investigate and release the funds, not three months. So I look up the property on the county auditor's website. The website shows the property has not sold since 2007. When I've done real estate transactions the auditors page shows me as the owner within a week or two at most. My thinking is the auditors page should show two recent transactions: one for the friend buying the property and then another transfer when the flip sold.

My neighbor says everything is fine. His friend is telling him it was a foreclosure and sometimes with foreclosures things are different blah blah blah. I tell my neighbor I would ask the friend to come over and log into his bank and show him the deposit. Or show him a settlement statement from the sale. He says he asked the friend for this and the friend instead offered to show him texts between himself and his other partners which will somehow prove the transaction is real.

I want to tell my neighbor that his friend is screwing him and he should call him out on it, but I would like some other opinions before I say with certainty that he is getting screwed. To me the auditor website is clear proof that the friend is lying, not to mention how fishy and convoluted the story is in general. Anyone have any thoughts?

nick663

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Re: Did my neighbor get ripped off for $8k?
« Reply #1 on: April 15, 2017, 03:26:28 PM »
Seems fishy.

Why not go over to the house and just knock on the door?  Should get you a definitive yes/no answer on if the house sold recently.

Papa bear

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Re: Did my neighbor get ripped off for $8k?
« Reply #2 on: April 15, 2017, 03:30:11 PM »
I've seen auditor sites take 6+ months to update in some counties.  Sounds fishy though.


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marty998

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Re: Did my neighbor get ripped off for $8k?
« Reply #3 on: April 15, 2017, 04:16:10 PM »
Does the neighbour's friend have a gambling or addition problem?

Neo

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Re: Did my neighbor get ripped off for $8k?
« Reply #4 on: April 15, 2017, 05:00:43 PM »
Not sure about gambling or addiction. Im sure my neighbor wouldnt have given him money if he was known to have those issues. I am in the same county and when i buy properties the website updates in two weeks or less. I guess this one could have slipped through the cracks somehow. I just know usually the crazy the persons hard luck story the more likely it is BS.

radram

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Re: Did my neighbor get ripped off for $8k?
« Reply #5 on: April 15, 2017, 05:31:06 PM »
While it is admirable to try to protect your neighbor, there is absolutely no advantage for you to get involved. You stated your skepticism, he did not want to listen. It is case closed in my book.

If he ever wants to tell you it is settled, he will. You will most likely never hear about the deal again.

SwordGuy

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Re: Did my neighbor get ripped off for $8k?
« Reply #6 on: April 15, 2017, 07:40:03 PM »
Sounds fishy to me, too.

It depends upon how rational your friend is - some people get mad at the person with bad news, not the person who screwed them over.

If you think (a) your friend is more rational than emotional and (b) actually respects your real estate expertise enough to actually listen, I would re-iterate the suggestion that he should ask to see a closing statement from the attorney or the bill of sale, along with a copy of a document from the bank or governmental authority that the account is frozen.  If the other fellow is unwilling or unable to do so, the odds him defrauding your friend become extremely high.

If a and b are not true, just keep your mouth shut.  Your friend is either in denial or doesn't want to confirm he got taken for a ride.

Blatant

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Re: Did my neighbor get ripped off for $8k?
« Reply #7 on: April 16, 2017, 07:45:53 AM »
Did you neighbor get ripped off? Yes, sounds like it.

Is it your business? No. You've brought it to light. Let your neighbor deal with it as he chooses.

ShoulderThingThatGoesUp

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Re: Did my neighbor get ripped off for $8k?
« Reply #8 on: April 16, 2017, 08:22:38 AM »
Yes he got defrauded, No you shouldn't get further involved.

(But don't do deals with your neighbor either.)

Goldielocks

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Re: Did my neighbor get ripped off for $8k?
« Reply #9 on: April 19, 2017, 11:11:27 AM »
Your neighbor loaned $8k to a friend, expecting a 25% interest in return for the use of the money.  You don't know the repayment terms or if anything was put on paper.

Unless it was tied to the property title, this is a personal loan, and the friend's friend has a personal reason he can't return the money.  (AKA he doesn't have it).

Would you get involved if he loaned the money to his aunt instead?

Neo

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Re: Did my neighbor get ripped off for $8k?
« Reply #10 on: April 19, 2017, 01:03:24 PM »
Thanks for all the input. I appreciate everyone's concern about whether or not I should get involved, but that wasn't my question. The question was is he being ripped off or not. Based on the replies here I feel confident telling my neighbor that he is likely being defrauded by his friend, and that will be the extent of my involvement. Thanks again.

Goldielocks

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Re: Did my neighbor get ripped off for $8k?
« Reply #11 on: April 19, 2017, 05:00:08 PM »
Thanks for all the input. I appreciate everyone's concern about whether or not I should get involved, but that wasn't my question. The question was is he being ripped off or not. Based on the replies here I feel confident telling my neighbor that he is likely being defrauded by his friend, and that will be the extent of my involvement. Thanks again.

Hi Neo...  my point was that you can't know if he is being defrauded unless you know the terms of the agreement. This looks like a personal loan tied to a lot of talk about flipping a house.   Hard to be defrauded on a personal loan. 

(I did get a bit off track with the aunt question... oops!).