EP 38: The Role of Ethics when a Subject To Deal Goes Wrong with Carly Nino

Ethics, especially ethics when a Real Estate deal goes wrong, is an important conversation. Tune in as Courtney and Carly, a Real Estate attorney that specializes in creative financing, discuss the controversy of a Subject To deal gone sideways and ask questions around the role of ethics for Real Estate investors and the industry.

Courtney and Carly cover many topics in their conversations but some you'll want to pay attention to are:

-her experience with an investor and a Subject To deal gone wrong

-how investing is risky and some pitfalls for private money lenders

-what role ethics should play in the investor world and how it is a difficult question to answer

-are Transaction Coordinators helpful or hurtful in the creative world right now?

-how other roles in the Real Estate industry have a standard for ethics and how investors don't

-among other important conversation pieces

Carly's post that started this conversation: "A subject-to deal gone wrong. What do you think??A negative equity subject-to deal is going to live auction tomorrow. There is no saving it. I tried. The buyer was a scam artist. Via a well-known group, he found someone to lend $50,000 in second position. This amount was enough to cover arrears, agent fees, wholesaler fees, closing costs, and give him cash back at closing. He promised to run the properties as STRs with high cash flow. He never did one thing. Because of him, a seller who thought their problem was solved now will have a foreclosure on their record. To boot, I believe this person is military so the foreclosure can have further consequences. The second position lender is out of all of their money as the property is completely upside down. The could go after the out-of-state LLC separately, but that is expensive and very low likelihood of success in collecting. Who knows if there was a personal guaranty done. Why am I not sure if a Personal Guaranty was done? A Transaction Coordinator - not an attorney - did the Note and subject-to documents, and also was paid thousands for that dis(service) at closing. The documents themself were signed by the Transaction Coordinator as nominee for the Buyer. ❌❌❌🚩The seller is the loser here. She was promised a solution but was part of a scam instead. I, or another experienced investor, could have easily made this deal work. Subject-to wasn't the problem. The second position lender was new, and trusting. It's not something you can afford to be in lending unless you can afford to lose your money. You need someone with experience to guide you. Real estate isn't a joke. It's the biggest purchase/sale decision many people will ever make. Creative finance isn't a joke. There are real solutions for people, but sadly the guru world has made it rife with new investors doing deals way above their financial and skill level, and scam artists have found an opening to line their pockets at other's expense. Why are so few gurus talking about how serious these deals need to be taken? About ethics, about legality, about having reserves for when sh** hits the fan (and with real estate - it always does - something always comes up whether it's unexpected vacancy or a major plumbing disaster) Ethics and legalities don't sound sexy to talk about. But these conversations are NEEDED. If you are teaching people creative finance and you just ignore how complicated it is, how having zero dollars is NOT acceptable, how there are legal consequences - are you truly an educator? Or are you just interested in lining your pockets with a course?The buyer's name was Osean Williams since so many are asking."

To connect further with Carly, connect with her on Facebook at https://www.facebook.com/carly.nino.

We hope you enjoyed the conversation and got something out of it to help you on your journey.

If you would like to connect further with Courtney, visit CourtneyFricke.com. New January 2025 Workshop announced, Fix Your Income. A 2-day workshop on Real Estate Investing 101.