Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10 5/3/83 based; site homxb.UUCP
Path: utzoo!watmath!clyde!cbosgd!ihnp4!mhuxn!mhuxr!mhuxt!houxm!homxb!mr
From: mr@homxb.UUCP (M.RINDSBERG)
Newsgroups: net.invest,net.consumers
Subject: Re: "No Money Down" (Other People's Money) Scam
Message-ID: <1092@homxb.UUCP>
Date: Fri, 3-Jan-86 11:43:48 EST
Article-I.D.: homxb.1092
Posted: Fri Jan  3 11:43:48 1986
Date-Received: Sat, 4-Jan-86 05:18:47 EST
References: <587@cylixd.UUCP>, <312@3comvax.UUCP>
Organization: AT&T - homxb!mr
Lines: 53
Xref: watmath net.invest:982 net.consumers:3734

> I heard an interesting one on TV the other night.  It goes like this:
> Step 1.
> 	Acquire a large number of VISA cards.  The "scam" lecturer says
> 	you can get well over 200 of them from banks all over the country.

This is not as easy as it sounds. When each bank checks your credit
rating they may notice (:-)) that you have many cards and as the
number goes up they will start refusing you (based on lack of credit)

> Step 2.
> 	Find a house to buy, and offer the seller CASH TOMORROW for his
> 	place, (which clearly is the most upright way to get a discount
> 	on a house), for 70-80% of the appraised market value (or your
> 	best estimate of it).
> Step 3.
> 	Go to your bank and get a cash advance on all those VISA cards
> 	(the lecturer says he likes to do it at 10 minutes before the
> 	bank closes, for kicks).  200 cards at $1000 per cash advance
> 	is $200,000 (enough to buy some pretty nice houses).
> Step 4.
> 	Pay for the house using the cash.
> Step 5.
> 	Refinance the house for 80% of the value and pay off the VISA
> 	cards within 30 days (to avoid the interest payments).

Most Visa cards start the interest on the day of the cash advance
at rates of 16.0% - 22.8%. (Sorry)

> Step 6.
> 	Pocket whatever money is left.

If any.

> 	Step 7.
> 	Give the house away (all the buyer needs to do is take over
> 	the payments).
> 
> 	His example:
> 	Offer $150,000 for a $200,000 house, take it or leave it (show him
> 	some cash maybe).  When you find a seller, go to the bank and get
> 	$150,000 in advances on VISA cards and buy the house.  Go to the
> 	bank and get one of those (easy to get???)  90% LTV mortgages for
> 	$180,000.  Pay off the $150,000 on the VISA cards and pocket the
> 	$30,000 that is left over.  The last step, says the lecturer, is to
> 	go to one of those real estate conventions and offer to give away
> 	the property, if someone will simple assume your loan.  Seems he finds
> 	a sucker or two at every one.

Odds are that it will never work.

> 	/mike schwartz @ 3Com Corp.

Mark