New Real Estate Scam Targeting Israelis/ American Israelis

[Chaikel]

There is a house in the frum community of Cleveland Heights, been on the market for over 2 years at $47k. Newly renovated, 3 or 4 bedrooms.

A house across the street for my in laws was on the market for over a year at $29k

[U-no-me!]

Ummm, I know a guy who bought one of the above mentioned properties in detroit, that the "israeli's" are selling for 60k, for 20k.
He personally went down to detroit to check out the property, the renters etc;. Why is it automatically assumed everything is a scam?

[Moishebatchy]

They have now opened a store front from across from the main building of the Mir. They are advertising in all the papers. It's really starting to blow up.

I've seen that "real estate" place across from the Mir. Didn't know it was a scam...

[how]

There is a house in the frum community of Cleveland Heights, been on the market for over 2 years at $47k. Newly renovated, 3 or 4 bedrooms.

A house across the street for my in laws was on the market for over a year at $29k

I guess no traffic is just not enough of an attraction

[Nitantnel]

bad neighborhood? You never drove through am abandoned neighborhood where just drugys live? Crime rate of 100% per person.

That's really cool. I am just bewildered  that there could be such a phenomenon in America.

[Moshe123]

That's really cool. I am just bewildered  that there could be such a phenomenon in America.

Discussing it frankly will evoke calls of "racism".

[CountValentine]

Discussing it frankly will evoke calls of "racism".

If someone only believes this happens in certain neighborhoods then yes racism will be brought up.

[Moshe123]

If someone only believes this happens in certain neighborhoods then yes racism will be brought up.

I can't start to explain the obvious.

[DovtheBear]

If someone only believes this happens in certain neighborhoods....

And, can you prove them wrong?

[moko]

There is a new scam that is really gaining traction, seemingly targeting the charedi community specifically (I'm assuming due to the widespread lack of business knowledge), where they are selling houses that can't be sold for even $1000, for $50k+.

Yes they are offering houses in Euclid for $50k+ (any Clevelander will actually laugh out loud when they hear that), and guaranteeing 10% return per year for the first 3 years, plus they are advertising an average of 16% return.

Rav Ahron Chodosh has asked my brother to be mefarsim this scam, and to approach the the Jewish papers to stop the ads, and start running ads warning the public about this scam. In addition, just today, a top law firm in Israel has tentatively agreed to take on the case pro bono, and start sending out C&D letters to anyone running these ads.

I doubt this will stop them, so if you know any Israelis that may be the type to get involved in something like this, please give them a heads up. Their sales pitch is quite convincing. I know a few intelligent people that were convinced.

http://matzav.com/israeli-real-estate-scam-targeting-frum-people
Interesting how he seems to call all single family home investments a scam. Many people including myself have invested in 1-2-3 family homes in the tri-state (troy-albany, new haven, waterbury). Though it's not the cleanest biz, if you stay on top of it yourself (as opposed to a manager) they can be decently profitable. Example:
2 family house in Troy, NY purchased for 60k
1 unit rents for $750
2nd unit rents for $850
I don't have the bills in front of me, (it is a joint property) they are far lower than stated.
An eviction was done recently. $250 for the lawyer and a few misc. $50 fees (marshall, township, etc.) for a total of under $500.
Tenants are generally found via craigslist.
Credit reports and background checks are always performed.
Have many people gotten burned doing this? Definitely. But many others have made money.
Granted that this example is for a 2 family house, others in the neighborhood own single family homes for half the price and are making decent money als. (all utilities on their single family homes are paid by the tenant)
Def. not for the faint of heart, but neither is the stock market. I f you're looking for a safer investment, put it all in mutual funds.

[Moshe123]

family biz?  http://matzav.com/israeli-real-estate-scam-targeting-frum-people
Interesting how he seems to call all single family home investments a scam. Many people including myself have invested in 1-2-3 family homes in the tri-state (troy-albany, new haven, waterbury). Though it's not the cleanest biz, if you stay on top of it yourself (as opposed to a manager) they can be decently profitable. Example:
2 family house in Troy, NY purchased for 60k
1 unit rents for $750
2nd unit rents for $850
I don't have the bills in front of me, (it is a joint property) they are far lower than stated.
An eviction was done recently. $250 for the lawyer and a few misc. $50 fees (marshall, township, etc.) for a total of under $500.
Tenants are generally found via craigslist.
Credit reports and background checks are always performed.
Have many people gotten burned doing this? Definitely. But many others have made money.
Granted that this example is for a 2 family house, others in the neighborhood own single family homes for half the price and are making decent money als. (all utilities on their single family homes are paid by the tenant)
Def. not for the faint of heart, but neither is the stock market. I f you're looking for a safer investment, put it all in mutual funds.

This guy has guts...

[moko]

This guy has guts...

I'm not on the mortgage 

[Chaikel]

http://matzav.com/israeli-real-estate-scam-targeting-frum-people
Interesting how he seems to call all single family home investments a scam. Many people including myself have invested in 1-2-3 family homes in the tri-state (troy-albany, new haven, waterbury). Though it's not the cleanest biz, if you stay on top of it yourself (as opposed to a manager) they can be decently profitable. Example:
2 family house in Troy, NY purchased for 60k
1 unit rents for $750
2nd unit rents for $850
I don't have the bills in front of me, (it is a joint property) they are far lower than stated.
An eviction was done recently. $250 for the lawyer and a few misc. $50 fees (marshall, township, etc.) for a total of under $500.
Tenants are generally found via craigslist.
Credit reports and background checks are always performed.
Have many people gotten burned doing this? Definitely. But many others have made money.
Granted that this example is for a 2 family house, others in the neighborhood own single family homes for half the price and are making decent money als. (all utilities on their single family homes are paid by the tenant)
Def. not for the faint of heart, but neither is the stock market. I f you're looking for a safer investment, put it all in mutual funds.

Do you agree that it's close to impossible for a chareidi guy sitting in kollel to clear 16% after expenses off one of these?

[Moshe123]

I'm not on the mortgage 

I'm referring to the author writing not politically-correct truths.

[moko]

Do you agree that it's close to impossible for a chareidi guy sitting in kollel to clear 16% after expenses off one of these?

chareidi or not chareidi, kolel or not, experience has been that once who hire a manager who usually doesn't care about the property as much as you do it would be extremely tough to clear 16%. That being said it would be a miracle for anyone in Israel to clear 16%. Generally managers seem take at least 3-5% percent of the rent roll plus an extra fee (or 1st months rent for new tenants). So you get killed on that plus they don't solicit or screen new tenants as actively as an owner would. Also, I would never buy a property without personally knowing a few others who have bought in that specific neighborhood/block (city or town isn't enough ), drive down there and check out the property with an inspector , and get a general lay of the land (who are your tenants going to be. (is there a college nearby- college kids, are there factories nearby, etc. each has it's pro's and con's) 
And after all that I'd still assume the author knows better than me, being that he's been doing this over 30 yrs and I just started dabbling.
I was just pointing out that scam is an interesting term for a volatile investment.

BTW I'm still in kolel as are quite a few others I know whom have done this

[CountValentine]

http://matzav.com/israeli-real-estate-scam-targeting-frum-people

Not sure where he is getting his Section 8 facts. Big money to be made here if it is your cup of tea.

[SamKey]

http://matzav.com/israeli-real-estate-scam-targeting-frum-people
Interesting how he seems to call all single family home investments a scam. Many people including myself have invested in 1-2-3 family homes in the tri-state (troy-albany, new haven, waterbury). Though it's not the cleanest biz, if you stay on top of it yourself (as opposed to a manager) they can be decently profitable. Example:
2 family house in Troy, NY purchased for 60k
1 unit rents for $750
2nd unit rents for $850
I don't have the bills in front of me, (it is a joint property) they are far lower than stated.
An eviction was done recently. $250 for the lawyer and a few misc. $50 fees (marshall, township, etc.) for a total of under $500.
Tenants are generally found via craigslist.
Credit reports and background checks are always performed.
Have many people gotten burned doing this? Definitely. But many others have made money.
Granted that this example is for a 2 family house, others in the neighborhood own single family homes for half the price and are making decent money als. (all utilities on their single family homes are paid by the tenant)
Def. not for the faint of heart, but neither is the stock market. I f you're looking for a safer investment, put it all in mutual funds.

Read it again he's referring to low-income tenants. I know who he is and he knows what he's talking about

[SamKey]

Not sure where he is getting his Section 8 facts. Big money to be made here if it is your cup of tea.

He's referring to single family homes not apartment buildings.

[moko]

Not sure where he is getting his Section 8 facts. Big money to be made here if it is your cup of tea.

Not on single family homes. on that i deff. concur. A tenant will cause damage and blame it on you then sec. 8 stops paying. Then you gotta  submit the proof (eg: video) that the tenant caused damage and get back pay. Not worth it. If this happens in a sec. 8 building with 50 units, it's not the end of the world.

[moko]

Read it again he's referring to low-income tenants. I know who he is and he knows what he's talking about

I know who he is too. read again what i wrote

And after all that I'd still assume the author knows better than me, being that he's been doing this over 30 yrs and I just started dabbling.
I was just pointing out that scam is an interesting term for a volatile investment.

I'm also referring to low income tenants.