Dee contacted me. She and her Merry Band of Felons are having the time of their lives in some dangerous neighborhood in the 85007 zip code of Phoenix. She wanted me to know she has changed her model. She will no longer be buying homes. She will now cosign for her "Citizens" (that's what she calls them). That way she won't have to put down 20 percent but instead her Citizen will have to come up with the standard 3.5 percent FHA mandated instead. A win-win? Right?
If I may: she is helping folks WHO RECENTLY GOT OUT OF PRISON by co-signing on home loans. We aren't talking about folks who may have gotten themselves in the clink for a simple DUI charge, either. These Citizens have done hard time for more than 20 + years at a stretch for some social heinous crimes.
"What happens if they default?" I innocently asked. Actually, I was dying to know.
"Oh, they won't," she replied. "They have to have a job." Of course they do. I didn't bother to ask what happens if they end up back in the slammer or the other residents in the area have strong opinions of their new neighbors--a scenario Dee is very familiar with. Instead, I gave a non-committal "uh huh."
What I did tell her was to please, PLEASE talk to a real estate attorney. Please. Please. Please. I also suggested a few other ways to do this that I might know about that could protect her as long as she only buys no more than four properties and follows the Dodd Frank law. But, she wasn't too keen on my suggestions.
The rest of this story sort of fits in with the frustrating theme of my blog posts lately. Currently, Dee and one of her citizens are in the process of purchasing a property. I know this, because she called me to ask what I thought of the price. I am not the agent because this one happens to be a for sale by owner. Because I am so "helpful" she was sure I would be happy to give her comps and guide her on properly writing a contract. That's what I do. Apparently.
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