Purchase price of what? $5,000? Boarded up windows? What else? Sell it for $10,000? Who wants a home that is boarded up? Chances are there are many properties in the neighborhood that are boarded up too.

The city should investigate people who buy homes with cash, especially if those homes are in drug infested areas of the city. I have seen many homes purchased by drug dealers, only to have section 8 moves in and do business.

"Buying" with no intent to follow through to complete the sale=negotiating in bad faith=voidable contract. Problem is the loss to the seller is the time they lost having their property off the market, tied up with a scam artist who had no intent on actually buying the property.

These scam artists have no marketing avenues that are any better than the MLS, and they actually hinder the deal by tying in a several thousand dollar "assignment fee" that cannot be financed, and only increases the real investor's required cash to close.

If ever there were a case for the government hammering shiesters out of existence, this racket would be it. Jamie, with all due respect, why are you giving credibility to something that is about as legit as a $3 bill and came straight from a Carelton Sheets infomercial?

The Carelton Sheets, Investors United mantra is "find it, control it, maybe you'll get lucky." If you ever wanted to dig into it Jamie, there is a smoking heap of scam a mile high on this one.

I don't write about things to give them credibility, Josh -- I write about them to give people a window into a world they might not know about. Some investors planning to rehab a property to resell or rent out get their properties from wholesalers/flippers, and thus a story about the rise in cash buying didn't seem complete without at least one person from that category.

There's nothing illegal about assigning a contract over to a second party, and nothing wrong with the first party receiving a 'finder's fee' as long as it's paid in the HUD and not on the sly. A good wholesaler, as they're called here, can be a boon for the long-term investor, who knows how to be a landlord but may not be familiar with neighborhoods, minor vs. major structural damage, values... It's a lot of leg work finding a good investment property.

As for the cash deals, banks simply do not want to loan out risky money, and an investment property is a higher risk. Add to that the need for repairs, and practically no bank will touch it now - most of the local banks that would have supplied investors with money have been seized and reassigned, or are in danger of it. Your only options are cash or hard money loans.

If you're a seller and you enter a contract with a buyer, don't you expect him to have the good faith intent of buying?

If on the other hand, you are only looking for someone to market your house to others for a fee, isn't that what a real estate agent does?

This is snake oil sales, pure, plain and simple. "I have a magical buyers list that no one else has access to that is way better than simply listing your house on the MLS."

This crosses the line into activity that I'm surprised the state's attorney hasn't gotten involved in for the general fraud that it is.

While I happen to find his crack about Carleton Sheets both funny and deserved, Mr. Dowlut mentions ‘scams’ and Investors United in the same post, as though he’s privy to some salacious bit of info on the school that the Better Business Bureau, the State of Maryland, the U.S. Armed Forces, and 30 years worth of competitors have failed to discover.

The last time I looked out my office door, Investors United was teaching dozens of different methods for buying, holding, and selling real estate, and had a permanent coaching and consultation system. We’re not a set of DVDs; we’re a giant building on Harford Road that Mr. Dowlut could walk into and find out about, if he had any interest in expanding his actual knowledge and not just its pretense.

By the way Mr. Dowlut, ‘chiseler’ is a more appropriate term for the people you were attempting to describe. ‘Shyster’ (spelled with a ‘y’) is most often used to depict an unscrupulous lawyer. And Mr. Sheets’ name doesn’t have ‘care’ in it anywhere.

I invite anyone who has posted here - including Ms. Hopkins - to make an appointment and visit our campus. I think you’ll see the merit in what we have to offer. We’re not looking for converts; we simply recognize that real estate investment (like any area of investment) requires knowledge and support. We have a bunch of both, and we don’t just hand it out to everyone who has a check in their hands.

If the size of one's building were an indication of credibility, Lehman, AIG, Bear Stearns and Goldman Sachs would be the gold standard.

Why do you spend time teaching real estate investing that could be spent practicing real estate investing? If you are a rational, profit-maximizing actor, it is because you are making more money teaching than you could practicing. You're an info-marketer selling hope in a bottle.

Your tuition is about $15,000 for 1 year of once a week instruction. On a cost/hour of instruction basis, you're more expensive than Harvard.

BBB is a scam that is bought and paid for by the business. Companies have maintained a AAA rating right up until the point of being shut down by attorney generals.

Ripoff report has certainly heard of you guys http://www.consumeraffairs.com/rentals/united.html

And then there's the 128 entries on MD Judiciary Case Search when you search for your company name http://casesearch.courts.state.md.us/inquiry/inquiryByCompany.jis

Whoops.

Wrong copy and paste for Ripoffreport http://www.ripoffreport.com/directory/Investors-United-School.aspx

Whoops, indeed.

Here’s what I recommend to anyone still reading this post: do exactly as Mr. Dowlut says. Check out Rip-Off Report. Read the 3 whole entries we have collected in our 30 years as a school. Read their dates. Read the responses. Follow the Courts link Mr. Dowlut has given you. Read the number of times our organization has been a plaintiff on its own behalf and on behalf of its members. Mr. Dowlut no doubt wants you to believe we’re continually defending ourselves; please, enjoy a chuckle at his expense.

We have enrolled fewer than nine hundred students in the last 5 years. Our tuition isn’t $15,000, and it’s not only less expensive per hour than Harvard; it’s less expensive than many community colleges. And Mr. Dowlut would know the things I just mentioned if he had spent even one minute on our web site.

Our 11 course instructors are not only real-world investors, they’re acknowledged leaders in their specialties. Why do they do it? As a self-proclaimed economics expert, Mr. Dowlut should know that creating and participating in a self-perpetuating system that increases the number of knowledgeable partners has two benefits. First, it maximizes one’s time usage by increasing transaction opportunities. Second, it fosters a structure that rewards success to both the leader and the subordinate. Investors United gains nothing as an organization if our members fail, a fact apparent to anyone who has visited us, yet one he simply refuses to grasp.

As for Mr. Dowlut’s BBB remarks; well, I think they speak for themselves.

But, again I say to the readers of this post: don’t believe us. Be a wise investor, and do what Mr. Dowlut has so far failed entirely to do: research us. If you determine that using real estate as a means for the generation of wealth is in your future, do the best you can to learn as much as you can about it. If that brings you here, and you qualify, we’ll be happy to have you. If not, then I most sincerely wish you the best of luck.

Finally, to Mr. Dowlut, I say this: as a mortgage broker, you were a (however unwitting) participant in a systematized swindle to hyper-inflate property prices and create the very real estate crisis you claim we’re exploiting. To me, your remarks seem a bit disingenuous, like a man who accidentally set his house on fire yelling at the guy who brought the hose. I’ve read a few of your essays; in my opinion, your views on the draconian expansion of government have a great deal of merit. Please, do as you’ve asked these readers to do: study us. You may find our organization more in agreement with your ideas than you currently realize, and we may yet learn from each other.

Popcorn, anyone?

Of course you're the plaintiff, you're suing your own students at an alarming rate. Often garnishing wages and even seizing their bank accounts. What happened, they couldn't keep up with the monthly payments of the dream you sold them? Your average judgement is 10k+/- a few. Given your down payment and installment agreement are structured to always have Investors United paid far ahead of the services they have rendered, how do you justify this?

I stand corrected, Investor United's tuition is 13k (pardon the rounding, I'm a macroeconomist at heart).

Your accounting for the Harvard comparison is way off however. By your own site this includes 148 hours of instruction, roughly 3 hrs/week for a year. The credit hours colleges sell are weekly recurring credit hours for 12-13 weeks. A 3 credit hour college class is really more like 40 hours of actual instruction. By that more accurate comparison, you're pricing out at a full time college tuition equivalent of $17,128/semester, or $34,000/year.

But I concede a point in that Harvard's full time tuition for 2011 has you slightly edged at 37k/year.

Never claimed you're exploiting the RE crisis, you're exploiting the hopes and dreams of the ignorant.

You're clearly making more money selling info than you are investing in RE.

And completely ignoring the fraud that is being committed on home owners, how does your contract assignment for a fee differ in anything but semantics from operating as an unlicensed RE agent? You're marketing and selling a property to a third party for a fee. You troll for listings and then you troll for buyers to sell your listings to all with no intent of ever buying the property yourself.

Wow. Dowling you are one stubborn fool aren't you? That's a good quality sometimes, but someone looking to represent others in politics must also be willing to listen.

Did it ever occur to you that wholesalers DO offer something to sellers? Not a magic buyer list as you said, but perhaps the time, advertising money, and effort that a seller does not want to put into selling the property? And maybe they do have a buyer list that a seller or agent does not have. If all the cards are on the table before an agreement is signed then what's your problem, man? -- Nevermind. You've demonstrated your ignorance plenty for my taste.

Investors United? Where shall I begin? I take offense to your accusation that members are ignorant. In addition to being a member, I am a successful business owner. Many of my colleagues are also business owners. And guess what, Josh, we vote and we will remember you buddy. YOU are ignorant.

Open your eyes, pal. IU has been a Baltimore fixture for 30 years, they're a family business, they work long hours, they're dedicated to their members, and they're good people. As if that's not enough, they've got an American Bar Association Chairman on staff. If you would have taken the time to read the posts above, you would realize that their income is derived from partnerships that begin with their partners' education. Oh, and notwithstanding your fuzzy math, I pay $87 per course hour and they financed it for me.

Do us all a favor - take some of your frustrations and apply them to doing something positive. The people you attacked are the good guys.

>>how does your contract assignment for a fee differ in anything but semantics from operating as an unlicensed RE agent?

Simple. Wholesalers represent themselves, they do not represent the seller as does an agent. A person becomes a "wholesaler" when they sell their interest in a real estate contract of sale (not the property itself.)

Wholesaling is actually common, lawful, and encouraged by FHA. In the last year, FHA insured more than 21,000 mortgages for properties that were resold within 90 days. Moreover, as of 2/1/2010 in order to stimulate real estate commerce, HUD issued a waiver of its regulation prohibiting flip transactions.

As someone else pointed out, as long as full disclosure is made by the wholesaler then wholesaling can be viewed as a good thing. It allows all parties involved to be rewarded for participating in the transaction.

By the way, thanks to the knowledge and the people at Investors United, I was able to buy a home when no bank would even return my calls. I kept my head above water during some pretty tough times thanks to them. They have a very loyal following and for good reason.

Nothing fuzzy about my math, if the University of MD billed the same way Investors United does, their tuition would be less than $20/credit hour. You are failing to see that college course credit hours a recurring weekly hours.

How does this marketing differ from anything an RE agent does by anything but semantics and somehow a lack of licensing requirement?

How is Investors United financing the goods they have sold you without a MD consumer finance license issued by DLLR?

You're the good guys??? About a year ago a UMD law student wrote a published law review journal article about Investors United. It runs from about pg 48-64 here http://www.msfraud.org/LAW/lawarticles/Regaining-the-Wonderful-Life-of-Homeownership-Post-Foreclosure.pdf

I knew the basic outline of your racket, but I did not know how deep it went regarding the "2nd round of negotiations" where you break the agreement you entered into using the one-sidedness of your custom contract. From the article:

"Students then use various
negotiation and contract engineering tactics to isolate the seller from
other prospective buyers. This isolation gives the students transactional
leverage so that they can compel the seller to lower the property’s sale price dramatically from that which was initially negotiated."

Charles Parrish, Investor United's founder and owner, calls home owners the "negotiation nemesis."

Then there's the use of "magic clauses" because as Charles Parrish says "it breaks my heart to sign a [standard] contract." Standard contracts offer protections to buyer and seller. These amended contracts with their "magic clauses" protect only the buyer. Then he goes onto recommend that these clauses be dispersed throughout the contract rather than tacked on as an addendum at the end in order to make them more difficult to find, even advocating keeping the seller in the dark with “You don’t need to explain everything [to the seller] because . . . a well written contract of sale is a work of art. It’s a well-painted Rembrandt.”

You're exploiting gross asymmetry of information and sophistication and crafting profoundly unilateral contracts. You are predators, a cancer on society of the worst order because you have enshrouded yourself in an veil of legitimacy.

Wholesaler: representing himself to earn an assignment fee.

RE agent: representing himself to earn a commission.

What's the difference besides calling a commission an assignment fee and rather than signing a listing agreement, signing a bogus sales contract with no good faith intent to buy?

Just made another bag of popcorn.

Mr. Dowlut, I have already asked the readers of this site to do exactly as you recommend. Yet you persist in using arcane mathematics and ridiculous spin to support claims that (to hearken everyone back to my original post) are unsupported by fact. You fly past the economic concepts I present and the other points I raise because (unlike the Cliff Notes I’m sure you read on Wealth of Nations) they address questions you don’t want to talk about. And please, everyone note: this is a mortgage broker attacking us. That’s how I like my irony – pregnant.

I’m glad you cited the Northeastern Law Journal article; I am, however, surprised that you found it, since that college was supposed to remove it because (like your comments) it contained unsupported accusations. Thousands of homes have been sold using the contract you deride, yet you’ve managed to find one specious article to support your legal position. Bravo.

Does our industry (like many others) have its share of disreputable characters? Yes. But I’m not a representative of the industry; I’m a representative of Investors United, and those are two different things. Except to you. Clearly, the number of attorneys, police officers, doctors, and government administrators who populate our membership doesn’t impress you. Clearly, our awards and commendations don’t impress you. I’m sure that, to you, we’re all part of the conspiracy.

Investors United is not a post-secondary career school, yet our completion rate is far higher than the Maryland average for such institutions (a report which confirms this was given to MHEC over 6 months ago). Many of our students are on an in-house financing program that extends to 24 months or longer, long past the 47 week course length. We’re not risking the government’s money to educate people; we’re risking ours. And we do not garnish our ex-students’ wages; that’s a mean-spirited assertion.

During my time at Investors United, not a single full-time student has paid the amount you say we charge for our courses. The reason we post our full-curriculum pricing on our web site is so that prospective new students can see the most they could possibly pay to attend here. The price you see ($12,876) comes before financial incentives are factored in. And you know that’s true, because our financial aid link is on the tuition calculation page. But it just doesn’t fit with the image you want to present of us, so you left that part out. By the way, how did you like being able to go to our site and find out how much we cost? Clearly, we’re hiding something.

Like every other reputable educational institution, we don’t claim that our knowledge isn’t available in pieces if you look long and hard enough. But, as an instructor, you should know that knowledge gains value when it’s organized and presented in a usable manner, and when it’s accompanied by real-world practice, support systems, and expert oversight. Do you take your car to a guy who read a book once?

People will invest in real estate, Mr. Dowlut. 91% of all adults will do it at some point in their lives. You believe that, though people receive codified training in every other form of investment, they should remain ignorant when purchasing or selling property - an unsurprising point of view for a mortgage broker. Perhaps, as you say, they should resort to free information gathered from the ever-reliable internet. Which site did you get your degree from?

What’s truly sad here is that you know (or could find out) everything I just said. Which means you’re not looking to enlighten people; you’re only looking to hurl invective at our school and our members no matter how many contortions the truth has to suffer. You’re wasting my time, and you’ll have no more of it, except to say this: though we clearly disagree on this matter (and on much else I’m sure), I thank you for your military service to this country and its citizens. The clash of arms has always made possible the clash of ideas.

Bottom line, so many of our current vacant housing were purchased as potential rentals and flips, deals the buyers either had no intention of following through with...or realized it takes more than a few grand to get a vacant home up to code (for the few that actually care about code enforcement).

A lot of these wholesale/cash homes will remain vacant, or be "spruced up" (and I use that term loosely) so they can be rented as subsidized housing, artificially driving up the rents.

Nothing like job security, eh?

Does anyone know approximately how many homes are rented as subsidized housing in Baltimore?

Whose wages and bank accounts are you garnishing and seizing as part of judgments that are within rounding errors of your tuition? Have you checked your own MD case search results?

The law journal article sources approximately 50 hours of Investors United podcasts, much of it the spoken word of the principals, but since you dispute the validity of the article,

Please provide your explanation of:

1. Control and roll
2. Second stage negotiations
3. "Magic" clauses
4. "negotiation nemesis"

So you price your tuition like a used car lot prices cars, and how exactly are you financing that tuition without a DLLR consumer finance license?

Between Investors United (128), its sister company Auction Brokers (39), and its principals (22 and 16 after stripping out MVA), the entire group has over 200 MD Case Search entries. BANK OF AMERICA ONLY HAS 528! They do how many thousand times more business than you? You are how many thousand times more disproportionately litigious than they?

Finally, "arcane" mathematics??? Math is a tool of deductive reasoning. If colleges sold course credit like you do, state schools would price out at less than $20/credit hour. If you don't understand how I got to that figure, find someone who does.

Jaded, I'm actually trying to find that out. A quick search on Craigslist today brought up a LOT of houses in my neighborhood that are subsidized -- some of them actually said "Section 8 Only" -- meaning, I guess, they wouldn't rent to me -- someone with a good job, who's a good tenant? That's insane. And frankly, I find it a bit discriminatory.

This discussion has gone off on a tangent. Those who know me know I have lots to say about IU, but the important message from Jamie's piece is that if half of all sales are "cash" and most of those are investors, what percentage of buyers are actually low and middle class folks? So, is homeownership for the rich and investors? Also, when these transactions happen without bank financing and among investors hiding behind limited liability companies, everything is hidden from view and unregulated.Secrecy is how we get into trouble.

This one is a hoot! While Elweedz readily admits that he knows nothing of Investors United, I will say that it smells a little of one of Elweedz favorite pastimes- Betting on football! I always see these guys on TV and Radio telling me about this "inside information" they have that will help me win bets. WOW! I’m excited. They have all this juicy, sweet, succulent insider info to help me make free money. Lucky me!!!! I pick up the phone and dial the number for their *****5***** star winning pick only to realize they want me to pay for this inside information??? I wonder why they would need my up front money if they already have this terrific info that will predetermine the outcome of a series of random, oblong ball bounces that will result in certain riches. The person on line sure sounds convincing. He says that he has insiders. I wonder who it is? A disgruntled player? A Belichek coach? A ball boy? Whoever it is, why would he only reveal this secret info to this one of a thousand guys advertising his picks and never get caught? Wait - I got it!!!!! Whoever it is doesn’t just give the info to one shyster, he gives it to them all. Then they sell it to us. Why? .....The insider has the other side. In this case, the other side is selling the fantasy while taking the reality. Anecdotal testimonial advertising is the surest sign of a scam.

At the end of the day, I don’t blame IU or even the football sleeze bags. American capitalism is defined by leveraging the next guy. If the next guy isn’t as savy as you then you extract money from him. Leverage wins.

http://www.msfraud.org/LAW/lawarticles/Regaining-the-Wonderful-Life-of-Homeownership-Post-Foreclosure.pdf

The link is broken....anybody know if a copy can still be obtained?

This post is an eye opener for those who criticize hard money lenders as they are only people who can provide you cash within days and who only cares about the wort of a property. Nobody wants to lose a good deal.