I am an Australian woman who bought a few investment properties in the USA- Phoenix, Orlando and Las Vegas.
I bought a 3 bedroom modern house in Phoenix AZ for $55,000. I employed a tradesman to do a few general repairs on the house. He then recommended I buy 3 foreclosure properties in the same area in Phoenix. He said he could do all the repairs for $12,000 and they would rent for $1200-$1400 each. I bought the properties for about $122,000 and paid him an initial sum of $6000 to purchase material. Over the course of several months I continuously relented to his requests for more money as he claimed the repairs were more serious than first imagined. He told me that the properties had been broken into and had various house parts stolen and damaged. I paid close to $20,000 altogether and made continual requests for receipts, invoices, proof of purchases and photos of work completed but he never provided any of these.
He then asked me if he could act as a property manager for the property 1st property I had bought, after there was a change of tenants. I agreed to pay him a monthly fee of $75 to look after all the maintenance issues with the property and make sure the tenant was happy. He was also paid $900 to tidy up the property before the new tenants moved in. Although this guy has no license to be a property manager in Phoenix, he went ahead and signed a lease between himself and the tenant in my property. Then I had a friend from Nevada who was visiting Phoenix personally inspect the properties to discover that basically no work had been done whatsoever.
The tenant at ended up moving out because all the maintenance issues the tradesman was supposed to fix were causing problems. For example I bought a brand new AC unit for the house which he was supposed to install but evidently didn’t have a clue what he was doing so he hooked it up and it cools but doesn’t heat.
The tradesman does have a registered business and owns a big house and has assets. I guess he was counting on the fact that I live in Australia and am far away. I did contact a few lawyers in Phoenix who said they would charge around between $5000-$8000 to pursue the matter. For that amount it doesn't even seem worthwhile as it could potentially be more money down the drain.
I have considered taking a 'holiday' to AZ to pursue the matter in court myself. I work from a computer so there would be no loss of income by having to travel abroad. Any advise about what I should do would be greatly appreciated.The secret to investing in the United States is who you deal with on the ground. If you appoint someone without doing due diligence it can be a costly exercise. The amount of money the lawyer was talking about was just a starting fee you could easily spend a fortune. You are better off just getting someone else to do the work.
What is more important do you have the deed title of the property. You need to make sure that the property is in your name. I assume that you had a lawyer to do that for you?
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I think you'll see in hindsight that keeping on paying this guy when he provided no recipts was a mistake, bigger mistake was then assigning him more power over your finances / assetts when he still had not provided anything to prove you could trust him.
heck, he probably owned the foreclosed places that he reccomended you buy after raising the prices a bit.i'd pay the 8,000 simply to rake him over the coals if for no better reason than i cant punch him from here, but i can sue his backside off, as you say he has assetts so you may get compensation.
Take the holiday but before you do, find out a bit about who's who in the areas you own properties… who has a good reputation and is long established meaning they are far less likely to be a risk and have oppinions you can trust. these forums if you read the archives and look at the long term posters and their associated companies can be a good starting point.
It is not enough to go over and see the damage, it's a case of knowing where you are going to take action when you get there and who with. If you do go.. keep us posted.
I know what I’d be doing and it wouldn’t involve lawyers.
I’d collate the debt add expenses and add 30% for good measure. Then I’d find out who the local underworld king pin is.
My next call would be to this rooster and give him a verbal bill with a condition. Pay up within 30 days or I’ll sell the debt to the local thug. You can deal with him.
You don’t do it of course but the threat may be enough to push his stress levels up a tad. Or you could do what all women are good at. Nag the bugger endlessly. He’s bound to cave in.
Its a successful strategy my wife has employed for years!
The Freckle
labradorinlove
I have to tell you it doesn't sound like a good situation you find yourself in. I have a good friend who lives in Phoenix. He is a real estate agent, knows finance and is an investor himself and knows plenty of good attorneys. This guy is taking you for a ride for sure.
If you send me an email I will pass on my friends contact details to you to see what he can sort out for you. I think you know your going to have to eventually jump on a plane to Phoenix.
labradorinlove wrote:I am an Australian woman who bought a few investment properties in the USA- Phoenix, Orlando and Las Vegas.
I bought a 3 bedroom modern house in Phoenix AZ for $55,000. I employed a tradesman to do a few general repairs on the house. He then recommended I buy 3 foreclosure properties in the same area in Phoenix. He said he could do all the repairs for $12,000 and they would rent for $1200-$1400 each. I bought the properties for about $122,000 and paid him an initial sum of $6000 to purchase material. Over the course of several months I continuously relented to his requests for more money as he claimed the repairs were more serious than first imagined. He told me that the properties had been broken into and had various house parts stolen and damaged. I paid close to $20,000 altogether and made continual requests for receipts, invoices, proof of purchases and photos of work completed but he never provided any of these.
He then asked me if he could act as a property manager for the property 1st property I had bought, after there was a change of tenants. I agreed to pay him a monthly fee of $75 to look after all the maintenance issues with the property and make sure the tenant was happy. He was also paid $900 to tidy up the property before the new tenants moved in. Although this guy has no license to be a property manager in Phoenix, he went ahead and signed a lease between himself and the tenant in my property. Then I had a friend from Nevada who was visiting Phoenix personally inspect the properties to discover that basically no work had been done whatsoever.
The tenant at ended up moving out because all the maintenance issues the tradesman was supposed to fix were causing problems. For example I bought a brand new AC unit for the house which he was supposed to install but evidently didn’t have a clue what he was doing so he hooked it up and it cools but doesn’t heat.
The tradesman does have a registered business and owns a big house and has assets. I guess he was counting on the fact that I live in Australia and am far away. I did contact a few lawyers in Phoenix who said they would charge around between $5000-$8000 to pursue the matter. For that amount it doesn't even seem worthwhile as it could potentially be more money down the drain.
I have considered taking a 'holiday' to AZ to pursue the matter in court myself. I work from a computer so there would be no loss of income by having to travel abroad. Any advise about what I should do would be greatly appreciated.People like this give us all a bad name in this busines . Please send me a PM I am in the states and Also Jay Hinrichs.I think we can help and know the right people to help you out. This again is a common theme for people just sending money and not taking into account what is going on. Instead of sitting here telling you what a mistake you made . I say lets get this piece of trash and make sure he is held accountable for every dollar you have lost .
sincerely
People like this give us all a bad name in this busines . Please send me a PM I am in the states and Also Jay Hinrichs.I think we can help and know the right people to help you out. This again is a common theme for people just sending money and not taking into account what is going on. Instead of sitting here telling you what a mistake you made . I say lets get this piece of trash and make sure he is held accountable for every dollar you have lost .
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Jay as i have seen on the forum – before some of the posts were moderated
– is quite passionate about dealing with those who give his industry a bad name and would seem to have a fair amount of experience and resource as Alex suggests they might be a good starting point.Wow I'm really I overwhelmed by people's support on this forum. I didn't expect it at all. To those people who implied I was naive and stupid I must agree I displayed a degree of this.
I felt I did do due diligence by checking the tradesman had a registered address with the BBB and verifying his home address. I also did a reference check with a real estate agent he was employed by.
Also I spoke to this man at great lengths on the phone. We had regular 30 minute telephone conversations. He sounded like a person with good morals and told me he came from Utah where all the folks are honest.
I'm 25 now but I was 23 or 24 when I first started employing him and I have been known to be way too trusting of others and gullible. On the positive side it was a good experience to become more wary and smarten up.
I have also spoken to other people he has ripped off. I spoke to a young man who has a wife and baby to support and this tradesman employed him to run around doing all his jobs for him for some 2 months and never paid him a cent. Like me the man trusted him but finally just refused to keep working when he didn't get paid anything. I fully believe the tradesman is going through life ripping people off at any opportunity where he can see he will profit without being caught. The last few times I tried to contact him his phone just rang out and I assume he had to get a new phone number with all the people who would have been chasing him.I have a place in Phoenix which is currently rented with a good return. I have a real estate agent/manager whose doing a good job. i plan to go over there soon to check on how things are going and to source another place. Probably in Phoenix. I could check out things for you- at least get some feedback. Also I have a bit of work to do on my place -painting and roof repairs which will be completed by a locksmith/carpenter who is also my daughter in law’s father. We could possibly do something for you if your places have been broken into. I have just signed up to this forum so I could get advice on submitting my tax return. After reading IRS material it seems we only need to give a simple report and some documentation and not file a complete return, Any help is appreciated. My Realtor Chris Paul at Prudential will be made aware of your situation. This type of stuff makes him mad and there is some investigations and legal actions going that I know of as well so don’t feel too bad- this type of stuff happens. By the grace of God go I! Jeff
– is quite passionate about dealing with those who give his industry a bad name and would seem to have a fair amount of experience and resource as Alex suggests they might be a good starting point.
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