Is this a good idea or a shady scheme?

[Irvine Laird]

I work with a not-for-profit organization that develops affordable housing solutions for low income families. The center of our mission is the belief that homeownership builds personal personal wealth with a homeowner has the right support and training to go along with her or his otherwise limited resources. This has been a successful program over the last 15 years as dozens of low income families have used their homes as launching pads toward better careers and higher net worth.

This week, a man approached me with a big idea. He is a developer of some kind who says he has people to front the money to buy dozens of foreclosed homes at pennies on the dollar in the low income neighborhoods where my organization works. These investors would cover the cost of buying and renovating each home to the tune of about $10,000 to $20,000 each. The developer asked to use my organization's brand. We would find low-income buyers for the homes and arrange bank mortgages at about $25,000 to $30,000 each. Half of the profit would go back to the investors and the other half would buy more homes. My organization would get to make more homeowners of low income families.

I've got a weird feeling about this, but some of my colleagues seem to like the idea. I reckon someone out there has some experience or an educated opinion.

Should we go for this or tell this guy no thanks?

[Bigb23]

Pay for a service to run a background check on him. Copy his drivers license and pertinent info.

But this stinks to high heaven, nowadays. :confused:

[Blueidone]

This group of investors could be using Neighborhood Stabilization Program (NSP) funds to accomplish this. I work for a company who is trying to do the same thing. This is a federal program designed to get foreclosed homes back on the market and occupied. Question the gentleman further about his plans. If you want more information on the NSP program you can go to the Wayne County website. There is a great description of the program there. The City of Detroit has separate funds from Wayne County and there is information on the City of Detroit website as well.

[lilpup]

If the guy seems serious you should consult an attorney and have a specific agreement written up between the two parties/organizations. Whether they want to loan you the money to do the purchasing, rehabs, and selling, or whether they do the purchasing and essentially contract the rest out to you, you want to be absolutely sure you're protected from fraudulent investors as well as straw man buyers that could leave you holding the bag.

[Roq]

That you're even posting this question here shows you have serious doubts. Run, don't walk, to a reputable attorney and get this checked out.

[detroitbred]

You should follow your gut instinct........it is trying to tell you something. Because you are questioning this proposal, you know your instinct is right.

[Sstashmoo]

Quote: "I work with a not-for-profit organization"

Quote: "This has been a successful program over the last 15 years"

Quote: " a man approached me with a big idea".

Quote: "He is a developer of some kind" "who says he has people to front the money to buy dozens of foreclosed homes at pennies on the dollar in the low income neighborhoods where my organization works."

Quote: "The developer asked to use my organization's brand." "We would find low-income buyers for the homes and arrange bank mortgages at about $25,000 to $30,000 each. Half of the profit would go back to the investors and the other half would buy more homes. ""

Quote: "I've got a weird feeling about this"

And rightly so, tell this guy to beat it.