So you’ve probably heard about bid rigging before, and it’s actually something that a lot of investors simply accept as part of the process of buying properties at auction because even when other, more experienced investors aren’t necessarily working together to keep other investors out, there are plenty of scenarios in which a more established buyer will actually pay more than they normally would to snag a property and hopefully scare off the competition. Overpaying on a property is perfectly legal, but rigging the auction, as you might imagine, is not, and you won’t believe the lengths that the FBI recently went to in order to try to expose suspected bid rigging in San Mateo and Alameda counties in California.
I’ll tell you all about it in just a minute, but first I want to take a second to mention something else that is basically RIGGED in our society today: YOUR CREDIT. That score determines SO MUCH about what you can and cannot do in your entire life, from where you live (even if you don’t buy) to what jobs you can get and what types of businesses you can even afford to start. That dumb little number, your CREDIT SCORE, has dominated your life long enough, in my opinion, and fortunately for you, I’m not alone in feeling that way. If your business could benefit from an infusion of $50,000 to $250,000 in cash credit at ZERO INTEREST (and I suspect you could find SOME WAY to leverage those funds, my savvy real estate investor listeners), then I strongly suggest you check out a free training provided LIVE for REI Today listeners by experts who have raised over $200 million in zero-percent unsecured funding since 2008. You CAN access this type of funding for your own deals and business and perhaps even more exciting, you can also offer it to your clients and buyers, not to mention that you get a HUGE BONUS just for attending the training with a more-than-$3,500 value. This training has a live Q and A and is offered only at specific times to a limited audience number, so sign up right now at www.rei.today/BIGCREDIT (one word, big credit) and reserve your seat. That’s www.rei.today/BIGCREDIT. Don’t go into Summer 2016 without the funding and support that you need to thrive in your real estate business. Go to www.rei.today/BIGCREDIT right now.
Now, let’s get back to where all in your local green space you need to be looking for the hidden mics…
So, the FBI originally hid the microphones basically all over San Mateo and Alameda because they suspected that some real estate investors in the area were rigging local auctions by agreeing not to bid against each other at the public auctions, then holding private, members-only auctions where the properties were sold again and the investor who made the original purchase pocketed the difference in the public auction price and that of the private auction. This is a tempting set-up because it tends to keep prices down and also enables investors to make some money just by buying low at the public auction. Bear in mind, also, that this is all ALLEGED, the investor who was actually indicted in 2014 as part of the conspiracy has pled not guilty and the other parties are just being investigated, not accused.
Anyway, the FBI put mics everywhere: in the courthouse where the auctions were held (those were hidden in light fixtures), in bus stops near the courthouse, in a statue inside the courthouse, in backpacks that they left lying around, and, reportedly (shockingly, the FBI is not confirming this) under rocks and trees throughout the Bay Area. So basically, if you were hanging out around Oakland Courthouse, they probably were listening. Kind of creepy, huh.
So anyway, not surprisingly, the defenses for the guys who are now facing investigation for bid rigging are pretty up in arms about all this recording, and I can’t say I blame them. After all, there was no warrant issued for a surveillance operation in the area. Individuals could have discussed the topic without actually being involved. Apparently you have the right to expect a conversation in a public place to remain private (as long as you have it quietly) and the FBI basically ignored this as well. So it’s a great big mess, and it’s unclear other than establishing that they can get away with this for extended periods of time, the FBI really accomplished much or even intended to. I’m going to just let that little conspiracy theory stew around in your brain for a minute.
So, the moral of the story, as it were, is simple: don’t participate in rigged auctions. The FBI doesn’t like it, it’s not legal, and your loving government will break its own laws in order to try to make sure you’re not breaking them. So now don’t you feel protected and loved?
If you want to learn more about the specific FBI actions (and privacy violations) out west or in your neck of the woods, then check out our extended coverage of this matter in the REI Today Vault at www.rei.today/vault. Not yet a member? No worries! Your privacy is safe with us, and you can get immediate access by just text REITODAY no spaces no periods to 33444 and I’ll provide you with fast, immediate access to this startling information as well as sending you straight to a treasure trove of trainings, uncut interviews, breaking news coverage, and a lot more timely, insightful information that will help make your real estate investing safer, faster, and more profitable. That’s REITODAY no spaces no periods to 33444 or go to www.rei.today/vault for more information right now.
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REI Nation, thanks for listening in. Now, more than ever, please remember this:
Your best investment is ALWAYS your own education.
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.