$18m Fine - Rick Otton & We Buy Houses

Discussion in 'Property Experts' started by RPI, 15th Nov, 2018.

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  1. New Town

    New Town Well-Known Member

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    I don't know his product but the judge doesn't appear much of a fan of property investment with the "waste of time" comments
     
    New Town, 15th Nov, 2018
    #21
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Not at the places I frequent. ;)
     
    Scott No Mates, 15th Nov, 2018
    #22
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  3. TMNT

    TMNT Well-Known Member

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    Maybe the judge bought an otp apartment?
     
    TMNT, 15th Nov, 2018
    #23
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  4. Simon Hampel

    Simon Hampel Founder Staff Member

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    An OTP apartment should at least go up in value ... eventually.

    Rick's scheme involved essentially acting as the middleman between a buyer and a seller, making money through arbitrage (arranging to sell the property for more than you'll pay for it, in advance).

    There's plenty of threads on Somersoft which discussed his strategies - here's one: How to Buy a house for $1 - Wrapping / Vendor Financing

    I don't think it's his "wrap" strategy so much that he got into trouble for - it's the whole "How to buy a house for $1" which was the issue - at no point have I ever seen a strategy which allows you to actually buy a house for $1.

    Another thread: How to buy a house for a dollar..
     
    Simon Hampel, 16th Nov, 2018
    #24
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  5. The Falcon

    The Falcon Well-Known Member

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    Interesting reading the “this is not a scam” comments from the 2012 SS post......

    One must put a very high price on their credulity in this game young Jedi......
     
    The Falcon, 16th Nov, 2018
    #25
  6. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think like most "advanced techniques", when they work well, it's all fine and dandy.

    The biggest issue here is that the opportunity for people to get ripped off is significant (ie they can't keep up the payments and thus lose the house - with no consumer credit protection available).

    As much as the banks are no bastions of honesty and decency - at least there are rules by which they are supposed to operate - especially when it comes to consumers running into credit difficulty.

    Unfortunately, the very same people who are most likely to need alternative lending arrangements are also the most vulnerable when they don't work out and thus consumer protection becomes even more important.
     
    Simon Hampel, 16th Nov, 2018
    #26
  7. PandS

    PandS Well-Known Member

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    Richest man in Babylon rule number 5 :)

    Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
     
    PandS, 16th Nov, 2018
    #27
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  8. TMNT

    TMNT Well-Known Member

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    When i first read about these options and buying houses for $1, i did my basic research, and my conclusion was
    Yes its possible, yes its legal.

    But a lot of stars would have to align for you such as finding the right vendor, vendor that was slightly to very guillable, rising market, and finding the right circumstances of the vendor.

    So it was a pass for me
    Plus id neveer met anyone who had done it succesfully before
     
    TMNT, 16th Nov, 2018
    #28
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  9. willy1111

    willy1111 Well-Known Member

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    So...how would he avoid paying the fine?

    The company fine of $12m, if the company didn't have assets of $12m to pay the fine, could he put it into administration?

    The personal fine of $6m, lets say he had a $1m paid off ppor and $20m inside a discretionary/family trust with a corporate trustee, no loan to him from the trust. Lets say he changed trustee company to another newly created trustee company controlled by a trusted person (ie wife, parent, sibling etc) and then declared bankruptcy as he can't pay the $6m fine as he only has $1m personal assets?
     
    willy1111, 16th Nov, 2018
    #29
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    My bet is that he doesn't have $6mil in assets and the company probably has about $100
     
    Terry_w, 16th Nov, 2018
    #30
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  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Trading insolvent if he goes out to buy lunch.
     
    Scott No Mates, 16th Nov, 2018
    #31
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  12. KinG3o0o

    KinG3o0o Well-Known Member

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    so what happens next if he dont pay this hypothetical fine amount.

    jail term? kinda pointless if you fine him and he dont pay, but still go on to enjoy his life.

    well i guess this is the world we live in.. nothing abnormal xD
     
    KinG3o0o, 16th Nov, 2018
    #32
  13. Whitecat

    Whitecat Well-Known Member

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    I want in
     
    Whitecat, 16th Nov, 2018
    #33
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  14. Chomp

    Chomp Well-Known Member

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    I doubt it would go to the duped investors, but it should.
     
    Chomp, 16th Nov, 2018
    #34
  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Bankruptcy probably.
     
    Terry_w, 16th Nov, 2018
    #35
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  16. Lindsay_W

    Lindsay_W Well-Known Member

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    Well you're in luck, Rick's book is still for sale on Amazon!! :)
     
    Lindsay_W, 16th Nov, 2018
    #36
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  17. hammer

    hammer Well-Known Member

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    I can picture Rick rummaging around the room looking under the bed, emptying his pockets before asking "what assets?"
     
    hammer, 16th Nov, 2018
    #37
  18. TMNT

    TMNT Well-Known Member

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    Oh that ferrari key!?
    Thats leased under the business
     
    TMNT, 16th Nov, 2018
    #38
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  19. geoffw

    geoffw Moderator Staff Member

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    I investigated Rick's techniques many years ago, and decided that I didn't like the ethics.

    As far as the fine... if he's anything like the person to whom I sold my business, he'd go bankrupt with no assets in his own name, but coincidentally, with heaps of assets in his wife's name. In this case, assets had been transferred in a dodgy way but expensive to prove, with only a small chance of success. $400K disappeared.
     
    geoffw, 16th Nov, 2018
    #39
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  20. Kent Cliffe

    Kent Cliffe Well-Known Member

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    $120, it's more divisible than $100. :D
     
    Kent Cliffe, 17th Nov, 2018
    #40
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