We remind you of the importance for a reason document checks and thorough selection of tenants, after all, a victim fraud anyone can enter the real estate market. Actually, just like its organizer. Today we introduce you to the star perpetrators and victims of their own negligence. Read, memorize and learn from someone else's rake.
How well-known fraudsters make money by flushing your money down the toilet
Donald Trump and Trump University
Trump University, founded in 2005, surprisingly quickly turned into the “Trump Entrepreneurs Initiative” because it violated state laws and operated without a license. Such "trifles" could excite future students, but they were already too dazzled by the bright smile of the future president. The scheme by which students were lured was as old as the world. At first, all interested parties could attend a free 90-minute introductory seminar, after which they were offered to continue their training at a three-day intensive course costing $1,495. It is clear that this was only the beginning of the path to mastering the profession of a real estate expert. Every time new and new courses appeared, which never gave complete information, because it was bound to be made public the next time.
The increase in prices and prestige of (non)educational programs continued up to $35,000, which had to be paid for the "Golden Elite" course. Among the students who never became real estate agents, there were many who spent over $20,000 only to find out that they were being blatantly duped. The place of honor among all the offended was occupied by yoga instructor Tarla McAeff, who single-handedly replenished Trump's coffers by $60,000. The fraudster's happiness did not last long and in 2016 he agreed to pay his victims $25 million. In some strange way, such a sudden surge of honesty and generosity coincided with the beginning of preparations for the election campaign...
Our advice to you is to study at real estate expert only from someone who is really qualified in this field.
Jared Kushner and the property management service
This brave fellow decided to continue the family business and fool real estate lovers in the second generation. Proud father-in-law Donald Trump can only be proud of how quickly the new member of the family is learning from his example. A place for your antics Jared Kushner chose Toronto. His company made quite a lot of money, promising investors significant returns from real estate. Spoiler alert, actual revenues were significantly lower than promised.
An interesting story with dissatisfied customers came to the surface only in 2017, when the ProPublica organization, which specializes in journalistic investigations, made public the results of its activities. Kushner's company helped make money on real estate in a rather unusual way - with a series of court loans, it brazenly pursued tenants, regularly sent late fines and eviction notices. Of course, these actions would be more or less illegal if the tenants did not fulfill the terms of the contract, but in most cases they had legal reasons to continue living in the apartments. After the revelations, the state of Maryland sued Kushner's property management company. Trump's son-in-law agreed to pay a $3,25 million fine to Maryland and to pay damages to Baltimore tenants. The story of an unsuccessful fraud and compensation was repeated again in the ex-president's family.
If you want to earn a stable profit for honestly rendered services, choose a reliable one real estate management service.
Other examples of scams you may (or may not) have heard of
- Landbanking was quite a popular scheme in the UK in the early 2000s. Investors massively bought plots of land, because they were promised that in connection with the development of infrastructure and changes in zoning, they would soon become more expensive. In fact, buyers spent money on objects that had no investment potential and that could later be sold for nothing;
- a similar situation, however, with real estate and not land plots, took place in the same 2000s in the USA. The initiators of massive monetary losses of investors were Bernard “Bernie” McGlynn and Pacific Property Management;
- Property Club in Australia also promised its depositors income properties that were actually significantly overvalued. This time the scam did not pass without a trace, and in 2012, some leaders of the organization faced the consequences of their "fruitful work";
- in the 1980s and 1990s, Donald Korf did not just make false promises, but really demonstrated the competitiveness of the facilities to potential investors. But he only did it thanks to dubious buyers. Artificially inflated demand led to rising prices for completely worthless offers.
Even the rich and famous can't always distinguish fake from reality and fall into the clutches of fraudsters or simply make wrong decisions, as he once did Nicolas Cage. He spent most of his profits on investments in, as he thought, profitable objects. The collapse of the market led to the fact that the actor found himself up to his ears in debt to the amount of more than 6 million dollars. This once again proves that you should not try to conquer an unfamiliar industry on your own and refuse the help of experts, especially those like THE Capital. Money flushed down the toilet is not so easy to return, so you have to use it wisely.
