DL Open Thread: Thursday, May 11, 2023

Hey, they did it to themselves.  My advice?:  Keep on doing what you do.

Corrupt ‘House-Flippers’ Victimize Desperate People.  You kinda intuited it.  Now you know it:

HomeVestors of America boasts that it helped pioneer the real estate investment industry. Founded in 1996 by a Texas real estate broker, the company has developed a system for snapping up problem properties — and expanded it to nearly 1,150 franchises in 48 states.

Unlike real estate agents, house flippers operate in a largely unregulated space. Real estate agents have a fiduciary responsibility to represent a homeowner’s best interests in negotiations, which is defined in state laws, licensing requirements and an industry code of ethics. But in most states, flippers don’t need a license.

HomeVestors, the self-proclaimed “largest homebuyer in the United States,” goes to great lengths to distinguish itself from the hedge funds and YouTube gurus that have taken over large swaths of the real estate investment market. The company says it helps homeowners out of jams — ugly houses and ugly situations — improving lives and communities by taking on properties no one else would buy. Part of that mission is a promise not to take advantage of anyone who doesn’t understand the true value of their home, even as franchisees pursue rock-bottom prices.

(A) ProPublica investigation — based on court documents, property records, company training materials and interviews with 48 former franchise owners and dozens of homeowners who have sold to its franchises — found HomeVestors franchisees that used deception and targeted the elderly, infirm and those so close to poverty that they feared homelessness would be a consequence of selling.

“You were always lying to them. That’s what we were trained,” said Katie Southard, who owned a franchise in North Carolina. “There was a price that you could pay, but you would always go lower and tell them that was the price you could pay.”

Do yourself a favor–read the whole thing.

Corrupt Mobile Home Mogul Victimizes Desperate People.  Sam Zell, the self-proclaimed ‘grave dancer’ and the largest landlord of mobile homes in America:

The man they blame is Sam Zell, the property mogul who is the largest landlord of mobile homes in the US. He styles himself as a “grave dancer” for his business habit of buying up distressed assets, and serves as chairman of the board of Equity Lifestyle Properties (ELS), which owns Down Yonder and over 400 other mobile home parks across the US. Residents at other ELS properties across the country tell the Guardian that they have raised similar complaints.

Sam Zell has an estimated net worth of about $6bn. He is one of the largest landlords of US rental properties full stop, with a massive real estate portfolio spread among affiliates under Equity Group Investments, his investment firm.

In a 2012 conference call, Zell said he liked “the oligopoly nature of our business”, in reference to limited competition in the mobile home industry. Zell self-coined the term “grave dancer”. As a rebuttal, tenants and tenant advocates have labeled him a “grandma gouger” over rent increases on the tenants, often older, at his parks.

Zell may be the largest, but his modus operandi is not dissimilar to what operators frequently employ here in Delaware.

What do you want to talk about?