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From: mykes@3comvax.UUCP (Mike Schwartz)
Newsgroups: net.invest,net.consumers
Subject: Re: Re: "No Money Down" (Other People's Money) Scam
Message-ID: <338@3comvax.UUCP>
Date: Mon, 13-Jan-86 18:54:30 EST
Article-I.D.: 3comvax.338
Posted: Mon Jan 13 18:54:30 1986
Date-Received: Wed, 15-Jan-86 08:11:39 EST
References: <164@bubba.UUCP> <757@hou2g.UUCP>
Reply-To: mykes@3comvax.UUCP (Mike Schwartz)
Organization: 3Com Corp; Mountain View, CA
Lines: 58
Xref: watmath net.invest:1027 net.consumers:3867

In article <757@hou2g.UUCP> scott@hou2g.UUCP (The Brennan Monster) writes:
>Granted I haven't thought about this too much (lazy,
>I guess), but could someone please enlighten me as
>to WHY someone with a $200,000 house would accept
>$150,000 for it?  Even if paid in cash?

I am as skeptical as anybody about these scams, and I do not like many of
them.  A person might have his house on the market for many months and
might take $150,000 for his $200,000 house.  Also someone interested in
a quick sale, or someone who still stands to make $100K + on the deal,
or many other valid reasons.  The thing that I do not like about the 
nothing down schemes is that those who are successfull really make their
profits from those who deserve it (the seller).  This is true for MOST of
the schemes.

The seminar lecturers we all see on TV do have a lot to teach us, though,
and I am not being derogatory.  I bought one $300 course and in less than
90 days, I did buy (with a 50% investor partner) a house that I am living
in.  I also own property in two other states, and IT IS PROFITABLE when it
is done right.  I have spent a grand total of $2800 for my ownership in
two of the properties (I inherited the third), and have made at least $2800
in write-offs.

The lecturers seem to come from two camps: the Ed Beckley camp and the Hal
Morris group.  The Beckley guys come across to me as good speakers, but their
methods aren't what I would like for my own ethical conscience.  Hal Morris
and his group seem to be a little more "honest" in the way they deal with
the sellers, banks, etc.  All of the lecturers will tell you that you wont
get rich quick and that it takes hard work. 

My gut feeling is that the '80s are not the best time to use the methods they
are teaching, although some do apply.  The Nixon/Carter years were much better,
because everyone had a hard time selling (and would take $150,000 for a
$200,000 house).  Since Reagan has been president, the sellers have been
at a distinct advantage (turn down the $150,000 - someone will pay the
$200,000 real soon).  The lecturers all say "learn from my mistakes", which
I bet they already made - and is the reason they must sell $300 kits for
a living.

I know several people who own several pieces of real estate, and I bet they
did not use very much of their own money (leverage is nice!!).  A few of
these people claim to use "nothing down" schemes, but the story they tell is
of "a few good cash flows" along with "a few aligators" (why is an aligator
green? it eats money, of course).  

How about this twist on the credit card scam:

Take your $200,000 in advances and wager on "RED" at Cesar's Palace.  If
you lose, declare bankrupcy, and if you win, pay all the fees, etc. with
the $100,000 you win.  (RED is almost 50-50 in Roulette).  This idea at
first sounded like fraud, but it does say in the papers I got with my Visa
Cards that I can get an advance for any reason, including investments.  If
an attorney were to tell me that this was fraud, I wonder if some other
real risky (quick high profit potential) investment wouldn't work.

Real interested in other views.  Mine are my own, totally.

/mykes