An AD I received from Carlton Student

I received an email from this guy. Can anyone check it out and give me feedback on wether this is a scam, an is it completly legal, it sounds good and I am tempted…


Earn $10K – $30K every 3 Mths. w/ Your Credit

This is perfect for those who have at least a 620 CREDIT SCORE and want to flip money in Real Estate without using their own money.

How does this work?

My Name is Pierre and I am an Independent REI (Real Estate Investor). I started in this business when my father and I ordered the Carlton Sheets program back in 1997. It has been a long hard road since then but I have developed a formula that works for tod! ay’s Real Estate market. It is a simple formula used everyday by Real Estate Pros and brokers; the hardest part is finding MOTIVATED and EAGER sellers with GOOD Real Estate Property.

Thats what I do. I have the right tools and a network of people that enables me to find those type of sellers in FLORIDA, NEW JERSEY,

NEW YORK (Some Parts), DOMINICAN REPUBLIC, and soon many other CARIBBEAN COUNTRIES. I find sellers that are willing to sell their home for about 5 - 10% less than the Appraised Value of their property which enables the buyer (us) to receive that 5 - 10% discount at the closing of the deal. After the property is purchased, minor improvements, and other work is done to raise the value of the property, afterwards the property is rented and/or sold for a profit. Money is made up front at the closing of the deal (Average $5K - $10K) and on the back end once the house is resold (Average $10K - $25K).

Why do I need you?

I am 25 years old and my credit is not the best, and unfortunately I don’t qualify for 100% financing. This formula ONLY WORKS for those who qualify for 100% financing. I use family members to do deals but for tax purposes they can only do 2 deals a year without getting killed with TAXES. With 100% financing, we as the investors DO NOT INVEST ANY MONEY OUT OF POCKET, yet we RECEIVE CASH BACK AT THE CLOSING (purchasing) of the DEAL. This cash back covers minor expenses, and improvements on the property. The remaining amount is then considered as initial profit and is divided 50 / 50 between you and me.

What do I need from you?

At least a 620 CREDIT SCORE, 650 is preferred but we can work with lower scores too. If you are interested we will get you pre-approved through my partner, who is a loan officer for the 3rd largest lender in Florida. She will pre qualify you for 100% financing and generate an Approval Letter based on your credit score. With that approval letter, I can begin making offers to sellers desperately looking to sell their property. If they accept the offer, we then move forward on processing the loan and closing the deal. Closing costs, Appraisal fees, Underwriting fees, and any other miscellaneous costs will also be financed or paid with the “Cash Back” received at the closing of the deal. YOU WILL NOT SPEND ANY MONEY OUT OF YOUR POCKET.

The “Cash Back” received at closing will also cover the first mortgage payments unless we buy property that is already being rented and is generating POSITIVE MONTHLY RENTAL INCOME; or if we decide to rent the property to cover the mortgage payments that will have to be made before we can resell the property.

Is this illegal?

THIS IS NOT ILLEGAL IN ANY SHAPE WAY OR FORM. There is absolutely nothing wrong with buying a home cheap and selling it for more then what you bought it for. There is also nothing wrong with buying a home, fixing it up, and selling it for way over market value. If your buyer wants to pay you way over market value, and they have the means to pay, then it is their choice to do so. They can do it, and so can you without any recourse.

The problem with “Illegal Flipping” is when investors, mortgage brokers, loan officers, appraisers, etc… get together to “create” a better picture of a loan package to a lender. They do things such as inflating appraisals, gifting down payment, drawing up false w-2’s, manufacturing pay stubs, writing credit letters, etc…

We HAVE NEVER and WILL NEVER use any of these tactics. There is no reason for us to do any of those things. When we find a GOOD Real Estate Investment, we first do a PROPERTY ANALYSIS to figure out the approximate APPRAISAL VALUE, based on that we make an offer to the SELLER 5 – 10% lower than that amount. If SELLER accepts our OFFER, the lender will then conduct a REAL APPRAISAL. All my associates know the risk of losing their license and career if they were to use falsified information and would NEVER take those chances; not with so many LEGITIMENT DEALS out there waiting for us.

Again, what do I do?

I utilize my tools and network of associates to find “For Sale By Owner” properties with EAGER, DESPERATE, or MOTIVATED SELLERS. I then ANALYZE the property or pay to get the property appraised. Afterwards I negotiate with the seller to reduce the SALE PRICE of the property 5 – 10% off of the Appraisal Value. If SELLER accepts our OFFER below the market value of the PROPERTY we AUTOMATICALLY MAKE A PROFIT, which is usually received as “Cash Back” at the closing of the deal. I and a few handy men then do some cosmetic work and overall improvements to improve the value of the property before putting it back on the market. We can event rent the property at this point and earn POSITIVE MONTHLY RENTAL INCOME while increasing the value of the property. Our Real Estate Property then becomes the SAFEST and MOST PROFITABLE STOCK that you can ever own; not to ! mention it did not COST YOU ANY MONEY OUT OF YOUR POCKET. Once we decide to list the property for sale, I then find the best buyers and try to start a “Biding War” to get the highest price possible. Once the property is resold, and all costs and fees are paid, the remaining profit is divided 50 / 50 between you and me.

Other Services That I Do:



They REFINANCE clients with interest rates as low as 4%, with 10, 15, 20, 25, or 30 Year Loans.


They work with ALL types of CREDIT; GOOD, BAD and even CH! APTER 11s.


I am also a NOTE BROKER. I find NOTE BUYERS and SELLERS the BEST DEALS on the market.

Again, I utilize my tools and my network to connect NOTE OWNERS who are EAGER, DESPERATE, or MOTIVATED to sell their NOTE with the right buyer offering the right amount of CASH for the NOTE.

Don’t walk - RUN away from this “deal”. I don’t know if this is a scam or just some newbie trying to make a dime, but either way you’re probably going to be the loser if you do it. The first warning sign is that they e-mailed you - that’s the way all good scams start. Next they make the incredible offer to buy properties at 5-10% off the appraised value - BIG DEAL!!! With a little effort, you could buy properties at 50% of the real market value or less. A 5-10% discount isn’t even worth talking about. Next, it’s very alarming that this guru wouldn’t have good credit. Credit is a measure of financial trust-worthiness. Do you want a partner that can’t be trusted with your money? If they really had a system that would make them a lot of money - they would be rich and have excellent credit (not poor with bad credit). Finally, I’d be very alarmed giving money to someone who was going to invest it overseas. I suspect that both they and your money will end up on a beautiful Carribean beach and you’ll end up broke and without credit!


If it looks like a pig, and oinks like a pig, and smells like a pig, it’s probably…

Good Luck,


Yeah, this is bad. An article was in the local paper about this, and I believe the Washington Post as well - it’s all about people “renting” other’s credit to get cars, houses, investments, whatever. Ridiculous! I worked hard to get and keep my high credit score and there are many posts here about how you can raise your credit score in a matter on weeks from par to good/great.
This sounds like a big scam

Well I read the responses from this forum, and I should of told you all that this is not some random spam mail from some stranger, I sort of know this guy, he used to date my sister. This email is content from some website he is starting, cause I know personally he makes a living off Web Designs not Real Estate. I called him after I read the first responses and asked him if he spams that email to a bunch of people. His response was “Hell No, I would never be able to handle that many responses”. He then told me he is preparing this website only for his contacts and future people he will be networking with, and said that he would never be able to market like that because he only will be able to manage a few deals at a time. He did admit that although he is not a newbie, he has been out of Real Estate for a while and has decided to get back into it. Anyway I told him about this website and this is my first time, but it seems like you guys are very helpful. He said he’ll check it out.

So do you guys make money like what he is talking about doing?

Sounds like this is the likely scenario. The 5-10% cash back will be eaten up by the closing costs and repairs. That leaves you with a loan in your name and a property that hopefully be rented or sold quickly and at a profit.

What risk does Pierre and his “partner” have in the deal? They already got paid when you did the loan. Sounds like this is a means for them to generate money from a lending business.

IMHO there is nothing wrong with the general structure of the deal. The devil is in the details though. The way it is presented it sounds like you are putting up all the money and all the risk. 100% financing may not require money from your pocket, but the payments will be coming from there. Choose your investing partners wisely. It is too easy to walk away from a deal when you have little or no risk in it.

My guess is that the minute something doesn’t go right the investor with the loan in their name would be stuck holding the bag.

People do what is called equity sharing all the time. However, they do it with people they trust implicitly and they have contracts/agreements in place to protect everyone in the deal. Basically, 1 party puts up the money and the other puts up the credit or some combination thereof. It is legal, but how many people would you be willing to borrow $50k+ for and trust them to pay you back?

Run forest, RUN!

Well he told me this is what the Carlton Sheets course advises people with BAD CREDIT to do, to find investment partners with good credit.

I dont know but I trust what he is telling me, he is a very honest and successful business man. He emailed me a FSBO listing with many great deals in Florida and NJ.

Are there any legal contracts to protect myself if I decided to do a deal with him?

Yes there are contracts that can be drawn up for this. I suggest you consult a Real Estate Attoryney to ensure that the documents are drawn up correctly and so you understand the legal ramifications. You may also want to consult a CPA or other tax professional so you understand the tax implications.

I am very interested in some FSBO he sent me. He told me he will do an Analaysis on the property and send me all the info along with a Profit Forecast. I know him and his family, we all grew up in Bayonne NJ, I dont think he is a scam artist.

I am interested…is there ANYONE that thinks this can be a good idea?

It really doesn’t matter if anyone here thinks it is a good idea. We can offer opinions/experience/wisdom on it from our view of the world. Beyond that, you will have to analyze the situation and decide if the deal is worth it to you based upon your own criteria.

Good luck

Well I’m going to give it a shot. He has some nice FSBOs, and he will send me all the info along with a Profit Forecast. He said he wont run my credit until we find a property that I am absolutly positive about. I would appreciate any legal advise you guys can give me to protect me. Any legal contracts, or websites I can download or copy some sample contracts?

“A man with Experience met a man with Money.
Before long, the man with the Experience had the Money,
and the man who used to have the Money, had an Experience.”

~Jack Miller

Forget that you know anything about this person for the moment.
It is not relevant where you guys grew up, whether you know his family, or his dating your sister.

Look at the numbers for the deal you are thinking about getting into, and make your decision about the transaction based on your analysis of the numbers.

Does the deal make sense?
Can you explain it to someone who is not in real estate in a few sentences so that they can understand the deal and clearly see how you are going to profit?

If you are putting up all the financing using your credit, make sure you are protected well.
How are you covered if the deal goes bad?

“In God We Trust; everyone else furnishes collateral.” ~ Jimmy Napier

Buying at 5%-10% discount off of the appraised value is paying full retail, my friend.
The first rule for investing in real estate is: “You Make Your Profit When You Buy.”
Where’s the deal?

Counting on finding a greater fool to buy the property from you at “way over market value” is a risky proposition. Your business plan should not depend on finding someone with limited mental faculties to cash you out.

The statement he made about not being able to use family members to do these deals for tax reasons doesn’t pass the smell test. If they are really making profits, then they won’t worry about paying the taxes. They will still be coming out ahead. This is a big red flag. I’d guess he can’t use family members because they 1) do not have confidence in him to really do what he claims he can do, or 2) they have already been screwed over by him.

Cash back at closing with 100% financing is not “initial profit.”
This is borrowed money - on your credit - which must be paid back.
How does spliting any of this 50/50 with your new partner benefit you?

All the plans he has for the cash back at closing simply means that you are over-financing the property. The use of high leverage means that the monthly payments are going to be high. The chances of this kind of deal being a positive cash flow deal are slim at best.

Who is going to go into their pocket to cover the negative cash flow?
For how long?

The fact that “he makes a living off Web Designs not Real Estate” is another red flag.
Does this mean that he is learning this business while risking your credit?
How much experience does he have doing tranactions like this?
Have you talked to any of his other partners who have done deals like this with him?
Have you seen any of his paperwork to confirm his claims?

I would get good answers to these questions before I got involved with him.
Otherwise, you might be the man who has an Experience.

PS:  I'm not trying to say above that all partnership deals are bad.  Partnership transactions can work out for everyone's benefit, if the people are a good match (with the right combination of skills, knowledge, energy and capital), and the deal is good enough.   

To make this sort of deal work, you have to purchase the property at a substantial discount to fair market value.  That way, you have the equity in the transaction to cover your repairs, holding costs, marketing costs,  etc., and still make a profit when it sells.  You and your friend can learn to do this well with a little study at this site.

And if you buy it right, you can sell it at a fair price to your buyer.  This makes your exit strategy a lot easier than trying to sell it for more than it is worth.


Valgolas is right on the money. There are enough red flags here to make a quilt!!! Also, you keep saying that your friend is a successful businessman - THEN WHY IS HIS CREDIT BAD? Doesn’t make sense, does it?

They say that there’s a sucker born every minute. Can you figure who’s the “sucker” in this deal?


EVERYBODY WRITE THIS DAY DOWN IN HISTORY!!! Sept. 15th 2005 at 8:59pm Reoconsultants has nothing to say after reading your post Valgolas I have nothing to say! WOW this is a first very well put!

Make that double history Propertymanager And I totally agreed on something! (Sorry mike had to add that) LOL

REO - there must be a full moon!

LMAO I am running outside to check right now!

i have my friends to put up their credit now that my dti is stretched
to the limit. however, my friends trust me. i’ve been doing this for 3 yrs
and i’ve made some of them money too.
also we’ve gotten into preconstruction deals where we usually have 25% equity at closing. i have enough cash reserves to last several months of vacancy for each property i own.
10% is too slim of a margin to make any money.

Thank You guys for all your help… I didnt know I couldnt do 2 posts on different forums so I told the other guys I would close this one.

Valgolas definitly helped me the most. That was what I was looking for. An unbias opinion. I feel there is an opportunity to make money like this, and I know I can get involoved, with or without this guy.

Like I said he will send me the numbers on all the good deals he comes across. He agrees with Valgolas about getting 25% equity up front, he said 10% is like the worst case scenario, so we will see! He is suppose to be joining this forum so he can learn some more tips, he admits not being a seasoned vet, so I will take a month or two to decide to get involved with him, someone else, or maybe just bymyself.

Thanks A MiLLion ;D