Are we all honest investors??

See, that’s where we differ. To me, in a free market economy, consenting parties decide what meets the suitability requirement, not a third party. By that I mean that if two parties agree to terms on a transaction, that is fully disclosed, then, by definition it’s suitable.

What I believe you are referring to is the NASD’s rule 2310 regarding the recommendations that a broker makes to a client (forgive me if this is not what you’re referring to). That rule is put into place to protect the fiduciary nature of the broker / client relationship. However, what we’re referring to is NOT a fiduciary relationship as neither party in this case represents the other. They are two mutually interested parties in the transaction. This is an entirely different transaction that what we are referring to.

haha this is going nowhere, i think you get my point now and i totally get yours.

honestly, maybe i’m just not using ethically the right way. what i’m saying is that there are ways to do these deals that, if i did them that way, would make me feel guilty. to each his own. and yes, the age of the person, not because of the number of years, but because of the likelihood of them being in a certain situation (being poor), can make me feel much worse.

and i don’t want people to be held by the hand, free markets are a major, major thing to me (econ major…). i am not saying i think these immoral (to me) actions should be prohibited, maybe not even regulated, i just wouldn’t do them. there are things that are legal and okay in a free market i still wouldn’t like doing. for instance, though i’m sure there’s lots of profit, if i owned a credit card company, i would want to gear my services towards adults, instead of making a killing by being the company that kids get their first credit card from. sure, i’d get a ton of money in late fees, overdraft fees, etc, but i just wouldn’t like it. on the other hand, i was about to quit my job at one point because i don’t really like how misleading my entire industry is, yet i ended up dealing with it and staying. now i just think if they’re gonna be dumb enough to pay, they get what they are going to get. a fool and his money are soon parted, isn’t that how it goes? i still feel bad about it sometimes, but i don’t think there should be regulation, and i still sell the stuff. i just wish people woudl be more responsible for themselves haha.

anyways i’m done in this thread, limited time online is pretty much claimed by real learning… i totally am with you on this just being part of a free market, and i don’t want suitability standards here. i would just personally feel guilty about doing some of the things a free market would allow me to do, and i would only feel that way in certain situations (like i said before, i don’t really support how my industry advertises its products, or even what they put in some of them. however, some of the people i sell to i take joy in providing them products that i feel they are being ripped off on, so that may not add up for karma’s sake, but it’s just my feelings i guess)

Maybe dropping this thread is a good idea. I fear your head is too far up… that you may not grasp what you’re actually saying.

(off topic…)

No, I’m a senior citizen so I believe I’m exempt…right?

All else said, we agree to disagree.


There are sooooo many many ways to make money in REI that there is no need to be dishonest.

Sometimes knowledege, wisdom and experience may give some investors an unfair advantage but that is not dishonest.

OK, how about this guy for a dishonest investor - or does the fact that he’s an adult and the person he’s hoping to sell to is an adult also mean he’s not being dishonest?

email from investor : "Hey folks
8 Wxxxxxxt Lane Gxxxxxxxe

2 Bd / 1 Ba

920 SF

ARV - $ 65,000

Repairs – Less than $ 1000

Taxes - $ 547.38

Zillow Estimates:

Subject 2/1 920 SF $ 63.315

14 Wxxxxxxxt Lane 2/1 912 SF $ 66,925

1 Wxxxxxxxxt Lane 2/1 912 SF $ 63,324

10 Wxxxxxxxxt Lane 3/1 1190 SF $ 76,414

Price - $ 35,000

Earnest money - $ 500"

The particular property he’s trying to sell is a HUD, HUD accepted an offer (presumably from him) on the 18th July so that sale isn’t closed or any where near it. Property has a LBP disclosure published on the HUD listing agents website, as the buyer this guy will HAVE to sign to say he has received the LBP report yet he makes no mention of it, getting rid of the lead paint alone will be nearly 4 times the $1,000 repairs he mentions. Property has no appliances (like most HUD’s) so there’s another couple of k’s and the house still wouldn’t be ‘livable’, so ‘repairs’ are probably more like $7,500 if you hope to sell at the ARV. Now the ARV, he’s basd this on Zillow estimate (at least he was honest there) not on true comps ARV based on comps comes out at $38,000.

All in all I would say he’s a dishonest investor, but if he finds somebody green enough to take his word on everything he stands to walk away with $7,000 - $8,000 for very little ‘work’ all he has to do is keep that conscience in check and he’s happy!

I dont do Hud homes because I live in a high price market, but when they allow investors to buy, don’t they sign a form stating they have to hold property for a certain time period and can not flip?

Well, I’ve been reading the posts for a long time but never participated until now. I initially found the thread a little disturbing but I quite enjoy the fact that I have a good feel where some of the participants are coming from. Some have clearly taken the side of honesty, so I hope to have opportunities to discuss issues with them in the future.

You know life has many ‘grey areas’ but you seek good, honest counsel and document accordingly, then you proceed with a clear conscience, if that matters to you. See, the problem is when ‘grey areas come to light’ meaning litigation, your documentation will substantiate your decision and your actions will be viewed as proceeding in ‘good faith’. Lack of good faith is what leads to ‘shady deals’.

If you consistently deal with people who you are pretty sure won’t be able to fulfill the agreement, this means that there is something you consistently overlook. In litigation this will be brought to light and your actions may be deemed ‘predatory’ and become public record. You may be able to walk away from a deal with a lot of money but can you pocket the money free and clear? Most investors are looking for financial returns, not returning to court. Family, friends and financial institutions will avoid doing business with you. Now that IS karma because you will start working with people who can’t get financing for a home, but your reputation will become ‘subprime’.

You may not believe in karma but you seem to be practicing it. You are enabling someone who can’t hold a job and you seem to want to appear compassionate (you probably had good intensions at the start) but you are coming across as resentful. So, you are jeopardizing your job and your financial welfare for someone, and now you believe someone sacrifice for you? Deal with the situation at work. Be honest with the woman and your boss. Refer her to Agency for the Aging or Vocational Rehabilitation to help her do this job/find another one/ apply for financial assistance/ Meals on Wheels. This will ease your stress at work and alleviate your feelings of victimization. Once that is addressed, you may feel differently about how you choose to treat others.

Well, that’s enough from me. I wish you the very best!

sorry i really can’t go further here without repeating what i’ve already said. you guys know how i feel and think it’s wrong, that’s fine. it is what it is, and isn’t gonna change, so i’m out of this thread

BTW: All HUD homes built before 1978 have the possibility of Lead Based Paint…all of these properties come with a LBP disclosure (by law). This is no big deal unless there have been actual tests performed and LBP has been positively identified.


Sorry, thought I’d put that in, the LBP report states Deteriorated LBP.