House Money Weekly In this week’s House Money Weekly segment, Lauren and Alan get together with their special guest Kelly Koontz. They discuss blog 149, Avoid These 3 Common Real Estate Scams. There are way more than 3 out there but these are some of the scams Alan or his clients have experienced. Scam #1 is wire instructions spoofing. For this scam, the scammers get access to the email of the real estate agents, or mortgage lender, or client and they sit in the inbox waiting for a message. They will send an email to whoever has to wire the money and typically it's the buyer or the closing attorney. The scammers will spoof emails, pretending to be the closing attorney with the email signature that looks exactly the same with a fake email address with a message of wiring a money urgently. Unfortunately, Alan had a client who fell for this scam. When Lauren first started in real estate, the sellers would send the wire instructions, but now, it’s a PDF with wire instructions but also it has an instruction to call a number to get those four numbers which adds another step but that stops the buyer from getting scammed. Kelly had a close business owner friend who experienced getting scammed similarly. Kelly reminds us that you should not think that getting scammed is only happening to somebody else, it is real and it's happening all over the place. Scam #2 is WhatsApp Conversations. Scammers will pretend to be a new client and will tell you to move the conversation to WhatsApp. If you're talking to a wholesaler, an agent, or a lender and they want to move the conversation to WhatsApp, it's probably a scam because that's not how business is done in the United States. The reason scammers do this is because it can be encrypted and anonymous, it doesn't cost them any fees and they can easily hide. Scam #3 is Buying a Timeshare. Timeshare is like a hotel resort but you only get to book a week. Every week of your chosen week is “yours” at a certain hotel, you pay for a downpayment of approximately $30,000 and you pay for an “HOA” fee each year. If you ever want to sell your timeshare, they'll never resell or buy yours, you're on your own. That's why a scam companies were formed. There will be law firms who pretend like they’re going to help you get out of your timeshare and then you will pay them $20,000 and once paid, they will be gone. In summary: 1) beware of urgency, 2) there’s no free lunch, 3) know if you’re the kind of person who could get scammed, and 4) when it comes to timeshares, remember that you should value flexibility. Sign up for the newsletter & read our blogs: https://www.housemoneymedia.com/ Mortgage Minute: Jasmine answers the question: What are closing costs? Sponsored by: Jasmine Mortgage Team https://www.jasminemortgageteam.com/ Real Estate Is Easy Segment Lauren interviews Eric Hughes. He is a real estate investor and coach. He lives in New York and Florida. He has 25 doors in Memphis, Tennessee, of basically almost all single family homes and one duplex. He runs the website Rental Income Advisors that is particularly catered for new investors. He chose Memphis because when he was deciding where to invest, he wanted to get into a market where he could cash flow. So, he had to go to a low cost of living market where homes were cheap and Memphis was one of those places. Lauren asks Eric if all rental properties don't have cash flow, and he explains why all rental properties do not have cash flow and why some weren't even meant to cash flow. Most of Eric’s portfolio is in Low-B neighborhoods, so not the most expensive neighborhoods in Memphis but also not the worst neighborhoods. It is sort of like working class neighborhoods and homes cost $120,000. They rent for $1100-$1200 per month, which is a 7.5 cap, and a 5-8% cash on cash return. Since Eric lives in 2 different states (neither of which is where his portfolio is located), Lauren asks if he has any hesitation or fear about investing out of state. He bought one property first to see how the process worked with a property manager and everything was normal. The idea that you can just be sitting in New York and buying a property in Memphis, turning it over to somebody else to manage it cuts against a lot of the traditional real estate guidance that many people have encountered. Even after leaving his job to focus on his portfolio, having these 25 rentals helps him to pay all his bills, even though he has loans on most of them. Aside from his portfolio, he also has a coaching business and some bookkeeping for small businesses is his sources of income. Right now, Eric doesn’t have a lot of future plans on his real estate investing journey, his portfolio is functional and still serving its purpose. And lastly, Eric makes real estate easy by keeping it simple. Contact our Guest: eric@rentalincomeadvisors.com https://www.rentalincomeadvisors.com/ Guest Host Segment Guest Host Kelly discusses utility recovery and managing utility costs. For example, let’s say there is a toilet flapper that's running in somebody's unit and the resident doesn’t have any direct responsibility for how much water is being used and the responsibility will go to the owner of the property. One of the highlights he found is that people don't realize that the little sound of that water running in the toilet can be easily 6,000 gallons of water over a month. If you get a water submeter installed on your property, the algorithms in the data collection can see that the water is running for 24 straight hours and the owner can get an email or a text the next day that tells them they need to go check that out and when that happens everybody wins. The hosts share their experience of having a massive water bill out of nowhere and how Kelly’s advanced submeter can help them. Alan adds that you need to know what the laws are when billing for utilities. Follow Our Guest Host: https://www.submetersolutions.com/podcast Follow House Money Media: https://twitter.com/HouseMoneyMedia https://www.instagram.com/housemoney.media/ https://www.youtube.com/@house-money https://www.tiktok.com/@housemoneymedia Follow Your Hosts: Lauren: https://twitter.com/AdultingIsEasy https://www.instagram.com/adultingiseasyreal/ https://www.youtube.com/@adultingiseasy Alan: https://twitter.com/RealEstateMaxi https://www.instagram.com/realestatemaxi
