Who Brings a Gun to a Closing?!
Quit Recap: Joe was a motivated seller who wanted to get rid of his inherited property, very quickly.We soon found out he had a current offer on the table from what we suspected was another wholesaler, who could not get financed after 3 months. In addition, the property was facing foreclosure, the taxes were going up for sale, and Joe fired his current lawyer – accusing him of purposely sabotaging the deal for his personal gain. ON TOP of that, Joe was a marine, fought in a few wars, was a mercenary, ex-MMA fighter, and a legal killing machine. From beginning to close, wholesaling his property took us a bit over 5 months because Joe was very erratic, paranoid, and hard to deal with.
By now you can tell this is my story on how a fantastic and simple wholesale deal turned highly dangerous. Joe had previously agreed and signed documents so he did not have to attend the closing, a smart move by the lawyer.
It was like Dr. Jekyll and Mr. Hyde. One moment everything was alright and Joe was happy that we were helping him out, then a day or so later he would call demanding we give him more money or he would physically hurt me and the attorney.
In case I have not made this clear, Joe was convinced that everyone was out to get him and he felt he was going to be left with nothing. Even before we agreed on a number, his original attorney told me that Joe was unstable and not to be trusted. I ignored the warning simply so we could move on with the deal.
As we got closer to the set closing date, I feel, that the reality of selling his fathers house is what caused him to become erratic and verbally abusive.
If you were to meet him today, you will get the impression that he is a very well mannered guy. Yet because wholesaling puts you in direct contact with people and their properties, you will come across colorful individuals who have a lot of emotions attached to their property. Either way, the lessons learned from the encounter will stick with me in all my business endeavors.
When Wholesaling Real Estate Gets Dangerous
What I did for Joe: Before things got too out of hand, I was doing everything I could to appease the seller. When we were negotiating and helping get all the paper work done for Joe, I recall having to drive down to his house and help him with a few bucks because he had sold his car and said he needed some quick cash. Also, I reduced me wholesaling fee so Joe could have more after the closing. I went out of my way to make sure that everything was explained fully and openly with the buyers, the attorneys, Joe, and myself. I believe that acting like a friend was a big mistake.
I learned to recognize the difference between being friendly and being a friend. Seeing that Joe was a highly trained specialist and fighter, thinking back, he was probably testing me – as well as the attorneys – just to see how much more he could get from us.
Not only did i drive to his property to help him out with a bit of cash and moving, his new attorney – the one I helped him find – also drove down to his property to get signatures and explain everything that he didn’t understand. In the beginning of the process I said I would do what I could to get Joe what he asked for. He asked for a specific amount of money, which nobody guaranteed but we came within a few hundred dollars of. Also, I found him a cash buyer, I got him an attorney, money, moving boxes, even dropped my wholesaling fee so he could get more.
Honest opinion: Joe gave us the impression that he did not need the money as much as he just wanted quick cash so he could leave and go back to California. According to Joe, he had purchased a few townhouses and he lived near a military base in SoCal. The only reason he was in Chicago was because he had to take care of his fathers stuff after he passed.
The more I think about it, Joe was probably just trying not to come off as desperate. Was he? I will never know, but I do know he was about to lose the property to foreclosure and he was going to owe a lot more on taxes, eventually leaving him with nothing.
Side Note: When I started wholesaling, I would listen to podcasts/tapes/cds about how easy it is to lock up a property, find a buyer and make a spread. This experience made me learn that every deal is different, and more importantly, every seller is too.
Sorry, back to story…
The week leading up to the closing, me and the attorney received numerous calls in late afternoon. Joe was trying to back out of selling the property because the estimated closing costs had gone up and he felt that he was deceived – he wasn’t. The seller claimed would rather go into foreclosure than do the deal. I called the attorney who reassured me that there was nothing to worry about and that Joe had already been told of the costs beforehand and he was just acting out of fear.
The day we closed was a normal one. Only the attorney’s showed up and it took about 2 hours to get everything done. Joe had a nice big paycheck waiting for him. Later that day, I received a frantic phone call from Joe. He had a gun and was looking to use it!
The seller received close to what he asked for but was short by 1K or so because of taxes and other unpaid bills. Since me and the attorney assured Joe that he would still walk away with a check, he felt I actually OWED him the difference from his actual amount and the amount he desired. Funny thing is, had he not played so many games and try to manipulate everyone, the deal would have been done within 90 days and he would have walked with more than what he figured he would receive.
I simply went about my business after the closing and figured since he got 98% of what he wanted, and I had gone out of my way to make sure of it, we were OK. WRONG AGAIN.
Where is my partner in all this?
I took it upon myself to handle this situation because the campaign was my idea, I scheduled the meeting, and I was in charge from the begining. Either way, before we even met Joe we agreed to split everything down the middle and I stayed true to my word. We closed and I immediately went to the bank to cut a check for half, even though I did all the leg work. What can I say, I am a man of principals!
How it ended
Joe called me week or so leaving me some of the most threatening messages you can think of. He would recite my home address, my cars make and model, and even describe what my girlfriend looked like! Turns out, he had been following me and the attorney to our homes and office like we were his prey since before the closing.
Me? I called his attorney who reassured me that he was just trying to bully people and we were the easiest ones to bully – especially me. Either way, I was pretty freaked out.
In his voice mails he would recite my home address, my phone number, and my license plate. My girlfriend found a random person sitting in front of the house – which turned out to be Joe’s friend who followed her and Joe described her to me over the phone.
Why all the insanity? Well he reasoned his actions by saying that if I got paid a my asking amount (which I didn’t), the attorney got paid his asking fee, than he should get paid exactly what he wanted, not a dollar less.
Cops to the Rescue? Nope!
The harassment got real. I tried calling the police and that soon to be a near dead end. Turns out Joe had no car because he sold it for cash, no real address, and no real phone that I could give them. All the info I did have was his California information – which doesn’t help me at all in Chicago. When I did mention to him that I was in touch with the police, he said he could put me in the hospital and be out in 90 days or kill someone and be out in less than 2 years (touting his military background and connections). Scary stuff…
Finally, I had enough and I decided not to live in FEAR!
I took comfort in my actions and I knewI was the only guy who helped him and did everything he asked short of doing his laundry. I called him and told him I would bring him the remaining amount and we agreed to meet a public location near the highway.
Before we met, I wrote out a document stating that he will no longer talk to me or make contact with me for any reason whatsoever. In return, I would not take take him to court on assault charges. Also I offered him some cash – about $100 and a way short of his asking amount.
Finally, we met and I told him that this was it and no more. Strangely, it was enough to get him to sign my “peace and desist” agreement.
I aint no dummy though – I took a witness with me who also signed the document, and we each got a copy. He quickly agreed, apologized, took out his weapon out of his back pocket to show he wasn’t kidding, got on his phone and told whoever to stop following us, and told me he never met anyone like me. Thanks?
Five months later, countless calls, endless miles driving back and forth, all the time spent in traffic, and all I made was a whopping $900 (2K fee split 50/50, minus the $100 extra to shut him up). Was it worth it? NOT FINANCIALLY! But in terms of learning experiences OMG YEAH!! Every wholesaler should learn from this experience.
My learning curve shrunk and I can handle almost any kind of seller now, no matter how looney or unstable!
A Year Later
Thanksgiving of last year my sister and a few friends came to visit. We ended up going to a loft party in down town and stayed until 4 am. When I was walking out, I passed the security guard and he definitely looked familiar. It was Joe. He high five’d me, asked me how I was doing and told the guy next to him that I was a good guy.
Apparently, I am a good guy after all.