Is this a Scam!? -- Experts Please Advise
Okay, an owner contacted me stating that they needed to sell 30 properties because they recently filed Chapter 11. The person states and I quote, "my attorney has spoken with the bank and he told me that the bank is going to file a motion with the court to do a lift of stay. However,
he informed me that i have about 45 to 55 days before the bankruptcy is lifted
and if i located anybody that was interested in purchasing any of the properties for me to get their information over to him and he would file a motion (if necessary) to sell the properties. What i would like to see
here is that someone would purchase some of the properties, allow my construction
company to repair them, and lets flip them and split the proceeds. If your interested, you must understand that in order for my attorney to motion the courts, he has to have 10 % of the asking price in his escrow account before he will approach the bank. Also if your outbidded for these properties
that you put up the 10 %, you will get that 10% back."
1) Never does the owner ask for the 10% they just state that the lawyer needs it in his escrow account. And besides I don't have the 10% available.
2) Why do I have to have upfront money to do a short sale?
3) The person hasn't given me any contact info. We have been corresponding through email. I have asked many time for a number where I can contact the owner. The whole situation just doesn't seem right to me.
4) Now if I found someone that was willing to partner or lend me 10%. What's going to stop this person from using the funds to get out of debt and sell to someone else.
5) Why does the lawyer need 10%?
I need for all of you short sale experts to respond to this one: does anything seem strange about this deal? And if not, would anyone be interested?
Ervan
edickens82@yahoo.com">edickens82@yahoo.com <IMG SRC="images/forum/smilies/icon_confused.gif">
[ Edited by edickens82 on Date 04/07/2003 ][ Edited by edickens82 on Date 04/07/2003 ]
They say if it's too good to be true, it probably is.
Maybe you need more info before you shell out some money like attorney information and/or property information. Just my two cents...
I don't know what to think of this. But, I'm sure that I wasn't the only one contacted. If this is a scam, I will do my best to expose this person... LOL I don't wan't anyone putting up that kind of money to find out that they will never see it again.
Ervan
edickens82@yahoo.com
[quote]
"What i would like to see
here is that someone would purchase some of the properties, allow my construction
company to repair them, and lets flip them and split the proceeds."
Note: That he will have to disclose to the BK court any "side deal" he has with you to split the profits after the sale. If you are privy to this side deal and approach the court and not disclosing this side deal (i.e., just disclosing your purchase agreement), you could be held criminally liable for fraud upon the court. Check with your attorney on this one, as you need to be sure you make an offer that the court will approve, but which you are not defrauding the court nor the person's creditors (note: since the person filed bankruptcy, the properties are now owned by the banktruptcy trustee so you need the trustee's approval for the sale. That is why this guy is saying his attorney will make a motion to the court).
1) Never does the owner ask for the 10% they just state that the lawyer needs it in his escrow account. And besides I don't have the 10% available.
The 10% cash down is implied. The trustee will require that it see the 10% cash down, or have the attorney state it has the 10% cash in his/her attorney's trust account. I doubt the attorney would make such a disclosure unless he/she has the money in the trust account. Otherwise he might be committing fraud upon the court.
2) Why do I have to have upfront money to do a short sale?
The trustee is likely requiring it. The fact that you are trying to do some creative financing is not the trustee's problem.
3) The person hasn't given me any contact info. We have been corresponding through email. I have asked many time for a number where I can contact the owner. The whole situation just doesn't seem right to me.
If the person will not give you his attorney's name and number so you can discuss this with his attorney, I say drop the deal. It is probably not worth your time because the deal will likely not get approved by the court unless the attorney can present it to the court in a favorable manner.
4) Now if I found someone that was willing to partner or lend me 10%. What's going to stop this person from using the funds to get out of debt and sell to someone else.
5) Why does the lawyer need 10%?
It can be for a number of reasons: trustee is requiring it, the attorney wants a buyer that is committed and will have some dollars invested, thereby increasing his/her risk of backing out of the deal, etc.
Taxjunkie
Ervan,
Since a Chapter 11 or any other BK is a public record, I think my first step would be to go to the BK court and see the case. Then after determining the listed assets and liabilities, I would contact the trustee (you would need to work with the trustee anyway if any of these properties were part of the BK ) to see what was really going on and proceed from there.
Keep us informed
John (LV)