Tragic $2,000,000 Scam - Client Letter Makes Attorney Cry

Another sad story. This is so unusual to have the wife involved in these investment deals. It's upsetting to think that Mr. P has successfully secured our $2 million retirement fund for himself. Now this is for those that are able to watch on YouTube. You can see this tattered piece of paper here.

This is Mark. He's an attorney and cpa.

And this is a client's tragic story. No, okay. No, this is seriously. A woman walked up to me at the end of a workshop, I think it was in Phoenix, Matt, at least 10 plus years ago. And she had tears in her eyes and just handed me this note and I was like, oh no, did I offend her? You know, I mean, my jokes are so clean and never racy or edgy. So I thought I couldn't have offended her. But no, she handed this to me and there were people around. I'm signing a book or whatever and then I, I read this later back in the room. Another sad story. Question mark. One main reason I was drawn into real estate investing is I'm going to read it word for word. Sometimes there's a little grammar issue here, but we're going to do it. One main reason I was drawn into real estate investing is because the first time I heard the term, quote, real estate investor was when my husband announced that he was investing the full amount of his retirement to a long time acquaintance who was an obviously, quote, successful, quote, real estate investor, end quote. My husband asked few questions as to where the money would be invested, nor did he require liability beyond a two page contract. Neither did he consult with an attorney or CPA because it was, quote, too expensive. Quote, I, on the other hand, at the time knew nothing of real estate investing, but asked one question of this acquaintance, Mr. Tim, and I won't say his name. Shouldn't we have a pile of paperwork to sign? Question mark, quote like I remember when we got a mortgage. Mr. P retorted, quote, what is the matter? Don't you trust me? End quote. Then he looked at my husband and said, quote, g the husband's name. This is so unusual to have the wife involved in these investment deals. Quote, After 18 months, I became aware of this. I became aware that we were receiving no income from Mr. P. I insisted on getting an attorney who is trying to investigate this for us. Also the SEC is investigating him. Mr. P obviously knew much about all this asset protection stuff. Final paragraph. This information is bittersweet for me. It is good to know for the future as I prepare to start my life over. But upsetting to think that Mr. P is maybe, and probably successfully secured our $2 million retirement fund for himself.

See, wow. That is what asset protection is, is. We said be smart, but also, it's okay to have some backbone. It's okay to push back. And. And I. Some people feel like I. I can't believe that comment that that person made. Like, this is very unusual to have the wife in the room. I mean, if I was the wife, I'd be like, I'm the one that signs the check on this 2 million or approves 2 million going out. I think a lot of people, when you're investing money, you have the power, okay? You're like the bank, okay? They're gonna put all these conditions on. They're gonna investigate everything before they release money on something, okay? You need to be doing the same thing with your money when you come across an investment deal. I know we want to be nice. I know we want to be kind. I know we don't want to create a scene or anything. This is business. It's your money. You got to protect it.

Yeah. Yeah. I mean, there's so many lessons to learn from this very, very sad message. And you can see, many of you. Why I've kept this for years. I. I just think of. We had an SEC investigator come on our show a year or two ago who wrote a book on fraud, and he said, the number one fraud in America is affinity fraud, where it's someone you know, someone in church, someone down the neighbors hood, in your real estate club, in your investment club family. And we don't take the extra precaution that we should because we think we know them. And so I just want to say the best asset protection is just being careful, smart, doing your due diligence, and then all this entity stuff and trust and structure stuff that comes next, and you need it. You need both. Be careful, people. Be careful. Yeah. Let's now vet a little bit of due diligence. So everything we've said was about really focused on taking proper steps, being careful, not being pressured. I mean, we could talk about this for a whole podcast, which we have. If you look into our podcast history. We have due diligence podcasts in our sister podcast, the Directed IRA Podcast, and in prior shows here on Main street, we talk about being careful with your investments. But due diligence and good asset protection is two things, in my opinion. It's knowing the deal, knowing the people you're dealing with, and they're two different things. You may say, I know this deal is good, but you kind of have a bad feeling about the person, or you maybe have a good feeling about the person, but you have no idea what the hell you're doing. And maybe. Matt, can I take the know the deal part and then you take the know the person part?

Love it.

All right. Know the know the deal part. I have two comments. One is Warren Buffett is famous for this. This. He would say, I never invest in anything I don't understand. If I don't know how they make money or what the product is, I don't buy it. And every year in Omaha, Nebraska, does retreat. It's an Omaha right. He gets. Or am I just thinking Peyton Manning? I think it is an Omaha right.

The oracle of Omaha.

The oracle of Omaha. See, man, I used Omaha twice on my show today. Two different reasons. Yeah, we want that.

City of Omaha needs to send us some love.

Yeah, we want to give you some love. So the Chamber of Commerce of Omaha is the sponsor of today's show. Want to give a big reach out to Tom Wagner, the CEO of Chamber of Commerce. I don't know who he is. I'm just. Okay. Anyway, all right, now, knowing the deal, number two, I had this Texas client that was just so colorful, and he was like, if I. If I don't understand the deal, then I ain't doing it. And I'm like, what are you talking about? He goes, mark, in every deal, I look around the table, and if I can't figure out who the dumb money is, it's me. And I get up and walk away. Because he's like, there's always dumb money at the table, and I want to know who that idiot is. And if I can't figure out what it is, I'm out. And I'm like, oh, that's smart. So, you know. So know what you're doing. Know what you're doing. That's my point. What about people? I mean, you brought that up. Partners. I mean. Yeah.

Well, here's just a simple example. And I just remember this lesson just for myself. Let's just take a simple rental property, okay? Buying a rental property, you know the deal. You analyze the property to death. You've shopped the right mortgage rates or you've negotiated some awesome creative financing on the deal. You know the market it's in, you know the rents you can get. You've got this expectation, and you've ran some analysis on how it's going to appreciate you even thought about the tax benefits and all this stuff. You're like, man, you like, you got an awesome deal. And then you buy the thing and then you rent it to the first moron that sends in an application to be your tenant. Okay? Because that tenant is in business with you, they're either going to pay you every month or they're not. And this only works if you have a a good tenant. And so it may seem simple, but you need to be choosy about the people you're doing business with that are going to pay you in a deal. Like a tenant. Maybe you're hard money lending and it's borrowers. Maybe you're going into a business venture and someone's supposed to do a bunch of work, do your background and research on that person as much as you do in the deal itself.

I love SA.