Being in the foreclosure business, I found myself at the New York Hyatt on Sunday, at the REDC auction, with two separate clients. They had advertised 294 properties including 11 from Staten Island. On the day of the auction 108 properties were offered, including 6 properties on Staten Island. All of the Staten Island properties were currently listed as active in the Staten Island Multiple Listing Service (MLS).
The atmosphere was one of a circus, with 3 huge screens in front; but instead of clowns, they had men in tuxedos for entertainment. These were the “bid assisters”. Their stated purpose was to help the bidders understand what they were bidding, but the subliminal purpose was to get the bidders into the excitement of the auction so that they would bid over their heads and get caught up in the action.
They did this with sounds, and gyrations. When you bid, they would run and jump in front of you and try to pump you up by rounding their arms in large circles, with eye contact, with clapping and whooping, etc..
The auction started when a person claiming to be the president of the company stood in front of the rows of anxious bidders and talked about how auctions were the easiest way to buy real estate. If you were the successful bidder,and if the property were financeable, you would go to the back of the stage where one of the several banks in attendance would qualify you and get you a mortgage. Even if it were all cash, you would go to the side and sign a contract and give them the deposit ($2500 bank check) plus the difference in a personal check).
And then it begins.
There were three screens. On the left, a screen that had boxes of each of the item numbers in the auction (The Staten Island #’s were 311, 316d, 317, 319, 320, & 321). Once a property was sold and the buyer had signed the paperwork, submitted the check, and their credit checked out, the number changed to a green “CONTRACT”.
On the screen in the center was a photo of the property; and on the right hand side of it was the starting bid (which in many cases was $1,000), and what the property had been valued at once before. Can you imagine? These homes were in this auction because they either had phony appraisals to justify ridiculously high prices in the first place, but most certainly because they weren’t worth what was owed on them, and they were currently pushing the highest value they had ever had.
The final screen on the right showed the number of the item being auctioned at the time. This screen also contained a legend of either CASH or financeable.
And so it went. First a few properties from Newark, NJ; then East Orange, NJ; and then it jumped upstate to Newburgh, New York for a few; then back to New Jersey, and then to Connecticut.
Surprisingly there was bidding on every single property! All the while the auctioneer was doing what auctioneers do: speaking very fast, repeating the price he had, the price he was looking for, etc. (The auctioneer was so loud that I took off my hearing aid and was able to hear a lot of what he said). The auctioneer would also tell the audience how great a deal
they were getting because of the previoiusly appraised value.
Every once in a while a property that had already been bid on was returned to the auction and was re-auctioned; or, as it was put: “we were given a 2nd chance.” This was because either the original buyer didn’t realize what he had done, or he wasn’t credit worthy, or some other reason why the successful bidder did not sign a contract.
Finally, they got to the Staten Island properties. The first one on the agenda was a property at 45 Anjali Loop: a two-family semi in New Springville. The property had originally been listed for $399,000 on March 30, 2009, and reduced to $394,000 shortly thereafter. At the auction it was a hot item. It got high into the $300,000’s before the bidding ended. You could see that there were several people who came to the auction just for this one property, because a lot of people left when it was finished. They probably could have purchased it through the MLS for less.
Next up was a house that had been in the previous REDC auction held a couple of months ago: a two-family in a not-so-good part of Stapleton. 97 Osgood Avenue had been listed in the MLS originally in October of 2008 for $299,000; but over the months the asking price has been reduced to $168,000. The Staten Island Advance had reported that this property had been sold at the prior auction, but apparently that deal died. This property also was hotly contested and sold above the MLS asking price.
Another property that had a lot of action was a townhouse called Mariners Lane. I checked REDC; and in spite of its activity at the auction, they are listing it as "still active", ready for the next auction; so I guess that deal died too.
Meanwhile, the two properties that one of my customers was there to bid on sold for much higher than he was prepared to pay, and higher than the offers he had made through the MLS prior to the auction on both.
The final Staten Island Property, and one which I was very familiar with and with a customer to buy, was vacant land on Scribner Avenue. It was originally listed for $97,500, later reduced to $49,000. I had a customer whose offer had been accepted for $60,000; but during his "due diligence", he discovered that there was a commercial overlay on the property so that you might not be able to build a house; so my customer had walked away. My customer at the auction had asked the bank for a contingency of 45 days to determine by filing if he could build a house, but the bank said no. He went to the auction to try to buy the property for $20,000 or less. The property had formerly been a 4-family prior to the city’s demolition of it as an unsafe building, which had occurred within the past 2 years and which put the zoning issue into a gray area.
The opening bid was $1,000.
The screen stated that the property had previously been valued at $540,000. And the crowd went wild.
My guys went to $32,500. A couple of other people in the crowd kept bidding at the urging of the “bid assisters” who were egging them on, yelling, screaming, cheering, while the auctioneer was saying that the property is such a fantastic deal because it had been previously valued at $540,000 (he didn’t say, mind you, that it had been valued that highly with a 4-family on it).
The bidding ended at $65,000. I went up to the successful bidder and asked him whether he knew that there was a commercial overlay on the property. He had no idea what I was talking about. He asked me if I knew what the size of the property was and what could be built on it.
I recommended that he contact an architect before he did anything else.
Shortly thereafter I saw him again, after he had signed the contract, and given them his $2500 bank check and the rest of the 10% down payment by personal check. Again he asked me what he could build, and again I told him that he might be able to build a store with an apartment, but he should go to his architect.
Speed forward to Tuesday when I received a call from the successful bidder telling me that he lives in Queens and realizes he has no use for the vacant land on Staten Island. I suggested that he contact an attorney immediately (within 72 hours of the auction).
So what is the point of my story you may be asking yourself? The point is that buying at auction is probably not generally the smartest move. While it may be easy, as the president of the company says, but it might not be wise. I am not talking about the foreclosure auction at the County Clerk's office. I am talking about a situation like this, with professional hawkers.
What I have learned from this auction is that there were no real great bargains; no deals were made that you couldn’t have gotten from the MLS. Want to buy a foreclosure? Call me, its safer, and smarter.
………………………to be continued
Friday, June 12, 2009
Wednesday, June 3, 2009
Lsher's List: Goals revisited
Hey
Well, here it is, June already. My how time flies. My New Years Eve e-mail was about setting goals for the new year. Long term goals, middle term goals, short term goals, etc.
So how has everyone been doing?
Well 97% of the people in the world, don’t even have goals. 99% of the people in the world haven’t written them down.
But regardless of where you stand or sit in the spectrum now, today, this minute, is the perfect time to take a moment for yourself, sit down, and think about what you’re doing, and to what aim you are doing it..
Upon reflection, most of us will probably realize that we’ve made some progress on some fronts, more progress on others, and no progress, even stepped backwards on the rest.
But, be not discouraged. Today is a brand new day. Whatever was done yesterday is exactly that- done.
One of great things about our government is that a new administration can take over, and make 180 degree turns, change things radically, and start fresh.
My favorite time of the year while I was in school in New England, was September, the beginning of the new school year, new classes, new professors, new clothing, a new beginning.
Well, I’ve decided that today I am going to bring you a new beginning, and I give it to you to start fresh, no matter what or where you may be. Yesterday is over, and it is now tomorrow.
And it’s a brand new day.
So what should we do?
Stop what you are doing (well obviously you’ve stopped what you are doing, when you started to read this email- duh). Take the phone off the hook, and turn off the ringer on your cell phone.
Relax.
Close your eyes.
Now think about what you would be doing, if you could be doing whatever it is that you wanted to do, or if you could have anything that you wanted- either material goods, relationships’, prestige, power, or whatever.
Or Pick an area in your life that is important to you, that you want to improve (Family/Marriage/Relationship; Work/Profession; Health/fitness, etc.)
Figure out what it is, the number one most important thing that you really want for yourself in this one area of your life.
Maybe it’s a new house, or maybe it’s a better relationship with your spouse. Maybe it’s a new career, or maybe it’s a new account. Maybe it’s a new figure for your body, or maybe it’s to run the marathon. Whatever it is, figure out what is your biggest “goal” for yourself.
Now for the hard part:
WRITE IT DOWN
My goal is to……………………….
Make it clear and specific, the clearer and more specific the better.
Now that you have written it down, you are in the top 1% of achievers in the world!!!!!!
Your goal is now attainable.
Now let’s fine tune it a little, like setting a deadline. And if you don’t reach your goal by the deadline, set another deadline. No one sets unreachable goals, only unreasonable deadlines. Figure out what else you need to do to reach your goals. Do them.
Remember, when setting your goals, think big. Don’t let anyone talk you out of setting high goals. Shoot for the stars. “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” Michelangelo
And remember the most important thing is that: Failure is not an option!
So how have I done? My mother used to say “Do as I say, not as I do”.
Reminds me of an old joke, Jewish mother says to her son-
“so, ask me how I am doing”
"How are you doing?
“Don’t ask”
These are the goals I had in the email that I sent out on 12/31/08 to you:
I am so happy now that I am the #1 Most Successful Real Estate Broker on Staten Island, measured by the amount of sales and listings. On my way.
I sell one house per week or 52 houses this year. On my way.
I get referrals every day from the people who read my emails, and from the people they pass them along to. Not every day, but getting much more frequent.
I write the most successful email publication on Staten Island, reaching over 5000 people who read it. I still stop at peoples office to get their email addresses, and am adding names all of the time.
I earn $1 Million Dollars. On my way.
In 2051, I will have lived a meaningful, healthy, enjoyable life for over 100 years. We’ll see in 2051.
I run the New York City Marathon I am scheduled for surgery on June 25th to correct the arthritis in my toes so that I can start running again.
I serve on several charitable and quasi-governmental boards. Not on any boards yet, but I did get involved in the March of Dimes.
I am wide awake and out of bed by 5:30 am every day, Oops, not doing well on this one
I eat my breakfast, first of my 5 or 6 meals for the day. I eat my 5 or 6 meals most days,
I am at the gym by 6:30, almost every day, beating various previous personal bests in my work out. I reached my short range goal of 25 pushups per workout by June 1st , and I reached it two weeks early, and am now working on form- today I was able to do 25 full range of motion in a row. I increased the cross trainer to level 10 (from level 9).
I wear a 38 regular suit. I lost 4 inches on my waste, and am down a shirt size. Unfortunately I regressed from Easter to Mothers day and found the oatmeal raisin square cookies at Pathmark again. But I am proud to say, that I read a book, “the end of over eating”, and am back on track. More on that book in a different email, but boy, did I learn a lot! (It’s all a plot. by the food industry).
How are you doing on yours?
Finally, it is important that you read your goals, say them out loud, every day. Keep them in the forefront of your mind.
Good luck.
…………………to be continued
Well, here it is, June already. My how time flies. My New Years Eve e-mail was about setting goals for the new year. Long term goals, middle term goals, short term goals, etc.
So how has everyone been doing?
Well 97% of the people in the world, don’t even have goals. 99% of the people in the world haven’t written them down.
But regardless of where you stand or sit in the spectrum now, today, this minute, is the perfect time to take a moment for yourself, sit down, and think about what you’re doing, and to what aim you are doing it..
Upon reflection, most of us will probably realize that we’ve made some progress on some fronts, more progress on others, and no progress, even stepped backwards on the rest.
But, be not discouraged. Today is a brand new day. Whatever was done yesterday is exactly that- done.
One of great things about our government is that a new administration can take over, and make 180 degree turns, change things radically, and start fresh.
My favorite time of the year while I was in school in New England, was September, the beginning of the new school year, new classes, new professors, new clothing, a new beginning.
Well, I’ve decided that today I am going to bring you a new beginning, and I give it to you to start fresh, no matter what or where you may be. Yesterday is over, and it is now tomorrow.
And it’s a brand new day.
So what should we do?
Stop what you are doing (well obviously you’ve stopped what you are doing, when you started to read this email- duh). Take the phone off the hook, and turn off the ringer on your cell phone.
Relax.
Close your eyes.
Now think about what you would be doing, if you could be doing whatever it is that you wanted to do, or if you could have anything that you wanted- either material goods, relationships’, prestige, power, or whatever.
Or Pick an area in your life that is important to you, that you want to improve (Family/Marriage/Relationship; Work/Profession; Health/fitness, etc.)
Figure out what it is, the number one most important thing that you really want for yourself in this one area of your life.
Maybe it’s a new house, or maybe it’s a better relationship with your spouse. Maybe it’s a new career, or maybe it’s a new account. Maybe it’s a new figure for your body, or maybe it’s to run the marathon. Whatever it is, figure out what is your biggest “goal” for yourself.
Now for the hard part:
WRITE IT DOWN
My goal is to……………………….
Make it clear and specific, the clearer and more specific the better.
Now that you have written it down, you are in the top 1% of achievers in the world!!!!!!
Your goal is now attainable.
Now let’s fine tune it a little, like setting a deadline. And if you don’t reach your goal by the deadline, set another deadline. No one sets unreachable goals, only unreasonable deadlines. Figure out what else you need to do to reach your goals. Do them.
Remember, when setting your goals, think big. Don’t let anyone talk you out of setting high goals. Shoot for the stars. “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” Michelangelo
And remember the most important thing is that: Failure is not an option!
So how have I done? My mother used to say “Do as I say, not as I do”.
Reminds me of an old joke, Jewish mother says to her son-
“so, ask me how I am doing”
"How are you doing?
“Don’t ask”
These are the goals I had in the email that I sent out on 12/31/08 to you:
I am so happy now that I am the #1 Most Successful Real Estate Broker on Staten Island, measured by the amount of sales and listings. On my way.
I sell one house per week or 52 houses this year. On my way.
I get referrals every day from the people who read my emails, and from the people they pass them along to. Not every day, but getting much more frequent.
I write the most successful email publication on Staten Island, reaching over 5000 people who read it. I still stop at peoples office to get their email addresses, and am adding names all of the time.
I earn $1 Million Dollars. On my way.
In 2051, I will have lived a meaningful, healthy, enjoyable life for over 100 years. We’ll see in 2051.
I run the New York City Marathon I am scheduled for surgery on June 25th to correct the arthritis in my toes so that I can start running again.
I serve on several charitable and quasi-governmental boards. Not on any boards yet, but I did get involved in the March of Dimes.
I am wide awake and out of bed by 5:30 am every day, Oops, not doing well on this one
I eat my breakfast, first of my 5 or 6 meals for the day. I eat my 5 or 6 meals most days,
I am at the gym by 6:30, almost every day, beating various previous personal bests in my work out. I reached my short range goal of 25 pushups per workout by June 1st , and I reached it two weeks early, and am now working on form- today I was able to do 25 full range of motion in a row. I increased the cross trainer to level 10 (from level 9).
I wear a 38 regular suit. I lost 4 inches on my waste, and am down a shirt size. Unfortunately I regressed from Easter to Mothers day and found the oatmeal raisin square cookies at Pathmark again. But I am proud to say, that I read a book, “the end of over eating”, and am back on track. More on that book in a different email, but boy, did I learn a lot! (It’s all a plot. by the food industry).
How are you doing on yours?
Finally, it is important that you read your goals, say them out loud, every day. Keep them in the forefront of your mind.
Good luck.
…………………to be continued
Lasher's List: Scams and Scammers
I just got out of my car, and I had this catchy tune in my ear that I just can’t seem to shake. Not a song. I don’t have the range of hearing that allows me to enjoy music on the radio. (To understand my hearing, try listening to the Beatles in perfect stereo with only one speaker turned on- I miss all of the lower and higher ranges of the song). But this is not another rant about my hearing.
No, I can't stop singing a “jingle” 1-800 Kars for Kids. 1-800 Kars for Kids, 1-800 Kars for Kids, donate your car today. Ever notice that the commercials are clearer, and louder, and easier to understand than the regular radio broadcasts? TV too.
Now when I am in my car, and I am able to hear the radio, I listen to either National Public Radio (NPR) (WNYC) which is commercial free, except for when they are asking for donations, or to 1010 WINS, where give your car to charity commercials run all day long.
So what’s that all about?
First of all, to be a not for profit corporation, you need to have a charitable purpose (raise money for charity), form a corporation (there are services like Blumberg’s, XL services, Gerald Weinberg, PC, where you give them 3 names, and a charitable purpose, and a few hundred dollars later, bingo- you have a tax free corporation. Now you have an accountant file with the IRS for whatever the current type of tax free corporation is, and you’re ready.
Now you go to an ad agency, come up with a catch tune, or copy, and make an ad. Then you go to the radio station, and buy commercial time. Now they have all kinds’ of deals. Radio is cheap. And not for profits get special rates.
Every car has two values: Wholesale and retail. There are books published every month that list these values (NADA, GALES) for every car with sub sections to add or deduct for added accessories, or high mileage, etc. They call these prices average wholesale or average retail or average loan given on any year and make automobile up to a certain age. When they get too old, then they don’t publish the values. However that doesn’t mean that a car that is over 5 or 6 years old (whatever it is) has no value, at that point the car dealers know from their own experience what the cars are worth.
Now besides price lists that are broken up by retail and wholesale, there are car dealers that are wholesalers and retailers.
The person in the car dealership, who sells you a new car, is a new car dealer. He pays you very low wholesale for your car, leaving room for him to make a profit when he sells your car to the wholesaler. Of course the wholesaler has to make a profit when he sells the car to the used car dealer who then resells the car for retail to the consumer for high retail.
Now in addition to reselling the cars as cars, there is another whole market for the so called “burdens” that the commercials talk about, cars that don’t run, bad body rot, etc, are dismantled, the parts resold, and anything left is sold as scrap metal.
Cars without titles, requires a form to be sent to the Motor Vehicles for a replacement Title. If you are in a hurry, for the cost of federal express, DMV will overnight you the title, so losing your title is no big deal.
Now they also offer vacations. This is easy. People have donated their time shares that they no longer want, so they have access to free vacations all over the place.
So what do they do with the cars?
They sell them.
Who are we dealing with?
Car dealers.
But what about the charity? Where do they come in?
They talk about high administrative costs of charities. There is a car dealer/wholesaler who is really running the show, who pays the charity so much a car, or charges the charity so much a car for services, so that the charity winds up with a couple of dollars per.
But if you take how much they spend on advertising, and how much they spend on the company that buys and sells the cars, I have to wonder about how much of the gross dollars that they raise actually go to charity. 1%?
Andrew Cuomo- where are you?
And speaking of advertising, there is an ad I hear on the radio where the guy says that he just bought 1 Million copies of a book, home remedies that the doctors don’t want you to know about- and he is going to send it to you for free- except for $4.50 shipping and handling.
What can this be all about?
Well, suppose it cost him between ten and twenty five cents a copy (a dime and a quarter). The real cost of mailing is another dollar. Now there is the answering service and the radio/tv time. So what can the profit be on $4.50? One Dollar? Sell all One Million, make a Million dollars?
Is this about putting together a mailing list to work or sell?
Or is this about collecting credit card numbers for future identify theft or credit card theft?
Andrew Cuomo- are you there?
And you know why they say “Money Back Guaranteed?” Because studies have shown that most people would never ask for their money back. (there are always some). But most people are too embarrassed. But the effect on the buying public is, wow this must be okay- they guarantee to give you back your money if you aren’t satisfied.
Several years ago on Staten Island there was a guy who was selling a tape of the month club deal. You would have a catalogue, or get mailings every month to buy new tapes, similar to the book of the month club. Except you were to buy several new cassette tapes every month. (This was before CD’s).
The first month you got 10 tapes for $9.99 and then you bought more tapes every month for five years. When you signed up, you got a free tape player.
Now what he did, was figured out the value of the tapes- 5 years of 3 tapes per month @ $9.99 per = $1798.20.
But in order to make this deal happen, the people had to finance the $1,798.20 over 5 years. But since you couldn’t secure tapes not purchased, he secured the tape deck. Basically he was selling an $80 tape deck for $1,798.20.
Most people that sign up for things like this, will buy some tapes, and then stop buying, but keep paying until it is paid in full. Most people will not ask for their full money back guaranteed (which of course this conman wasn’t offering). If you really purchased the tapes every month you got a good deal. But statistically, you only bought for a few months, and kept paying the entire amount. Greenberg then would sell all of the $1,729.20 loans to one of those well known finance companies at a 24% discount $1,366.32).
Now a lot of people started complaining when they tried to quit, and realized that they had bought 5 year contracts to buy tapes, and started law suits in civil court, but everything was legal, so that didn’t help the buyers. The Advance got wind, the former District Attorney Murphy started something, and he left town, with his money, never to be seen or heard from again.
And some people bought tapes every month, and some paid the bills, and those who didn’t got sued by the finance company.
Always remember that when a deal sounds too good to be true, it probably isn’t.
…………………..to be continued
UPDATES
MY HAIRCUT:
Well, on Monday after my haircut at the barber college, I went back to my regular place, First Impressions at 2047 Victory Blvd, next door to Schaefer’s, between my office and Starbucks on Victory Blvd., and Nicholas re-cut my head to straighten it out, and now I have to let it grow so he can cut it again, to fix it.
No, I can't stop singing a “jingle” 1-800 Kars for Kids. 1-800 Kars for Kids, 1-800 Kars for Kids, donate your car today. Ever notice that the commercials are clearer, and louder, and easier to understand than the regular radio broadcasts? TV too.
Now when I am in my car, and I am able to hear the radio, I listen to either National Public Radio (NPR) (WNYC) which is commercial free, except for when they are asking for donations, or to 1010 WINS, where give your car to charity commercials run all day long.
So what’s that all about?
First of all, to be a not for profit corporation, you need to have a charitable purpose (raise money for charity), form a corporation (there are services like Blumberg’s, XL services, Gerald Weinberg, PC, where you give them 3 names, and a charitable purpose, and a few hundred dollars later, bingo- you have a tax free corporation. Now you have an accountant file with the IRS for whatever the current type of tax free corporation is, and you’re ready.
Now you go to an ad agency, come up with a catch tune, or copy, and make an ad. Then you go to the radio station, and buy commercial time. Now they have all kinds’ of deals. Radio is cheap. And not for profits get special rates.
Every car has two values: Wholesale and retail. There are books published every month that list these values (NADA, GALES) for every car with sub sections to add or deduct for added accessories, or high mileage, etc. They call these prices average wholesale or average retail or average loan given on any year and make automobile up to a certain age. When they get too old, then they don’t publish the values. However that doesn’t mean that a car that is over 5 or 6 years old (whatever it is) has no value, at that point the car dealers know from their own experience what the cars are worth.
Now besides price lists that are broken up by retail and wholesale, there are car dealers that are wholesalers and retailers.
The person in the car dealership, who sells you a new car, is a new car dealer. He pays you very low wholesale for your car, leaving room for him to make a profit when he sells your car to the wholesaler. Of course the wholesaler has to make a profit when he sells the car to the used car dealer who then resells the car for retail to the consumer for high retail.
Now in addition to reselling the cars as cars, there is another whole market for the so called “burdens” that the commercials talk about, cars that don’t run, bad body rot, etc, are dismantled, the parts resold, and anything left is sold as scrap metal.
Cars without titles, requires a form to be sent to the Motor Vehicles for a replacement Title. If you are in a hurry, for the cost of federal express, DMV will overnight you the title, so losing your title is no big deal.
Now they also offer vacations. This is easy. People have donated their time shares that they no longer want, so they have access to free vacations all over the place.
So what do they do with the cars?
They sell them.
Who are we dealing with?
Car dealers.
But what about the charity? Where do they come in?
They talk about high administrative costs of charities. There is a car dealer/wholesaler who is really running the show, who pays the charity so much a car, or charges the charity so much a car for services, so that the charity winds up with a couple of dollars per.
But if you take how much they spend on advertising, and how much they spend on the company that buys and sells the cars, I have to wonder about how much of the gross dollars that they raise actually go to charity. 1%?
Andrew Cuomo- where are you?
And speaking of advertising, there is an ad I hear on the radio where the guy says that he just bought 1 Million copies of a book, home remedies that the doctors don’t want you to know about- and he is going to send it to you for free- except for $4.50 shipping and handling.
What can this be all about?
Well, suppose it cost him between ten and twenty five cents a copy (a dime and a quarter). The real cost of mailing is another dollar. Now there is the answering service and the radio/tv time. So what can the profit be on $4.50? One Dollar? Sell all One Million, make a Million dollars?
Is this about putting together a mailing list to work or sell?
Or is this about collecting credit card numbers for future identify theft or credit card theft?
Andrew Cuomo- are you there?
And you know why they say “Money Back Guaranteed?” Because studies have shown that most people would never ask for their money back. (there are always some). But most people are too embarrassed. But the effect on the buying public is, wow this must be okay- they guarantee to give you back your money if you aren’t satisfied.
Several years ago on Staten Island there was a guy who was selling a tape of the month club deal. You would have a catalogue, or get mailings every month to buy new tapes, similar to the book of the month club. Except you were to buy several new cassette tapes every month. (This was before CD’s).
The first month you got 10 tapes for $9.99 and then you bought more tapes every month for five years. When you signed up, you got a free tape player.
Now what he did, was figured out the value of the tapes- 5 years of 3 tapes per month @ $9.99 per = $1798.20.
But in order to make this deal happen, the people had to finance the $1,798.20 over 5 years. But since you couldn’t secure tapes not purchased, he secured the tape deck. Basically he was selling an $80 tape deck for $1,798.20.
Most people that sign up for things like this, will buy some tapes, and then stop buying, but keep paying until it is paid in full. Most people will not ask for their full money back guaranteed (which of course this conman wasn’t offering). If you really purchased the tapes every month you got a good deal. But statistically, you only bought for a few months, and kept paying the entire amount. Greenberg then would sell all of the $1,729.20 loans to one of those well known finance companies at a 24% discount $1,366.32).
Now a lot of people started complaining when they tried to quit, and realized that they had bought 5 year contracts to buy tapes, and started law suits in civil court, but everything was legal, so that didn’t help the buyers. The Advance got wind, the former District Attorney Murphy started something, and he left town, with his money, never to be seen or heard from again.
And some people bought tapes every month, and some paid the bills, and those who didn’t got sued by the finance company.
Always remember that when a deal sounds too good to be true, it probably isn’t.
…………………..to be continued
UPDATES
MY HAIRCUT:
Well, on Monday after my haircut at the barber college, I went back to my regular place, First Impressions at 2047 Victory Blvd, next door to Schaefer’s, between my office and Starbucks on Victory Blvd., and Nicholas re-cut my head to straighten it out, and now I have to let it grow so he can cut it again, to fix it.
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