Money for nothing - get-rich-quick schemes

Washington Monthly, April, 1993 by Art Levine

After taking the Milin and Vu courses and attending several other seminars, I was convinced that there were indeed hundreds of desperate homeowners in my area eager to unload their properties for practically nothing. To line up investors, all I needed was to place an ad in the paper claiming to be a real estate investor offering properties at 15 to 20 percent below market value.

For $23, I placed that bogus ad and indeed snared a few phone calls, but the most interested investor was a 21-year-old high school dropout named Don. And after scouring the foreclosure notices, I soon learned that the few homeowners I found who appeared desperate--based on their ads--weren't nearly as hungry to sell as I'd hoped. One couple, for instance, who announced in their ad, "MOVING ... MUST SELL," turned out to be just looking for a bigger house. They were clearly prosperous people, and I hung up the phone quickly, frustrated that the recession hadn't yet ruined more families in the area.

Then I ran across a promising prospect: "BETHESDA Reduced, owner moving ... $179,000." I called the owner and found out that he'd had his house on the market for eight months and was getting ready to retire to Arizona. It was just what any Tom Vu graduate was looking for: an impoverished retiree who would be forced to survive on Social Security unless he sold his house to me. My goal, the Vu course told me, was to get him to sell it for 30 percent below market, so I could re-sell it to an investor. I consulted the course's tips on deal-making--"plant fear," it advised and called the Vu organization hotline for last-minute negotiating advice. "It doesn't matter what the truth is," one instructor advised me about calculating a price bid. "It's whatever you can slip by them."

I felt slightly guilty about taking advantage of a poor old man, but I was determined to score my first deal the Tom Vu way. Yet as I approached his small, two-bedroom, gray-brick house, I'd almost convinced myself that I was actually a "problem-solver," as Tom Vu called us, doing him a favor by seeking to steal his house dirt-cheap. The man who greeted me, though, wasn't the doddering senior citizen I'd expected, but a bearded, single man in his late fifties who worked as a psychologist for the government. My heart sank--that meant he'd had a steady professional job for years, and probably solid savings.

We sat down in his living room. He stared at the TV, occasionally looking at me in a jaded, wary way. It was hardly the frightened anxiety I was hoping for. Still, I pressed on: "Because I offer all cash at closing," I said, glancing at the Vu-scripted spiel I had scribbled into my notebook, "and, you know, close quickly, uh, what I'd like to offer you is below market, but, uh, in fact amounts to what is, like, the net selling price ..." I postponed as long as possible the dreadful moment when I'd actually have to name a price, fearful that he'd punch me out for insulting him. So I tried to pave the way by citing the selling costs, such as real estate commissions, that he'd save by selling to me at a rock-bottom price. He interrupted with a blank, cold stare: "I already deducted that." Flustered, I looked at my crib sheet and cited other costs he might save by selling to me, Mr. Cash Investor. "Plus, because I'll be paying you all cash, I think a reasonable figure is"--I glanced down at my calculations and added a few thousand on the spot--"about $140,000." I looked at him with nervous hope.