Real Estate Investing Ethics - When is Lying Just Being Creative?

Here’s the story. An investor- we’ll call him “Bill”- was preparing to close on an investment property. He received a copy of the final loan documents via fax, and took the opportunity to look them over so he would be prepared to sign them at closing the following day.

Bill was surprised to find that the loan application contained some glaring inaccuracies, including a gross overstatement of his income and a property usage declaration stating the property would be used as his second residence. In fact, Bill had clearly informed the mortgage broker he had no intention of ever living in the home.

Bill was in a bad position. He was committed to closing on the property the next day, or he faced over $100 per day in penalties. Yet he knew that signing the application with the false statements was an act of fraud. What to do? What would you do?

The answer to that question is at the heart of a growing split in the ranks of real estate investors, and I believe it reflects a similar split in our society as a whole.

Many would look at Bill’s situation and claim, ‘It’s not his fault- he didn’t tell the lie, the broker did! Look at what he stands to lose if he doesn’t close. Besides, he committed to close on that house- he can’t back out now. He should just go ahead and sign the documents. It will work out alright in the end, especially since he’s just going to flip or refinance the property within a year anyway.”

The other side of the argument states, “Signing those documents is clearly loan fraud, and quite simply lying on Bill’s part. Even though the original deceit wasn’t his, once he signs his name he knowingly becomes a party to it, and the loan would be funded under false pretenses. Even though it may cost him money, and possible the deal, Bill should refuse to sign and try to work it out some other way.”

There is no middle ground here, and if you plan to invest over the long term you WILL face some similar dilemma. The question is not IF but WHEN. Now, not when you are in the heat of the moment, is the right time to decide how you will respond.

Simply stated, what kind of person are you? The kind for whom ethics are relative to the situation you are in, and how much pressure you’re under? Or, are you a person who knows right from wrong and is prepared to do the right thing no matter the consequences?

The more of us who choose to be the second kind of person, who choose right every time, the better will be our industry and, by extension, our society and our world.

The answer to the question in the title? When is lying just being creative? Never. Lying is always just plain lying.

Real Estate Investing - How To Get Ahead

We all want to get ahead. You hear people say it all the time. But what exactly does that mean? It’s kind of a vague statement, but it sounds good. Basically, it means that you want to have more money?maybe get your earnings ahead of your cash depletion. Maybe it means you want to be able to save enough to send your kids to good universities, or be able to take your family on annual vacations. It could mean that you want to squirrel away a retirement fund.

Whatever your particular idea of getting ahead, it does imply some sort of motion?movement from where you are now to where you want to be. That means you must figure out exactly where you are now and where you should be going. Once you start to think about it, though, you may find those places are a little more difficult to determine than you had originally thought. You may find yourself beginning to struggle with just what your particular concept of getting ahead is.

Robert Kiyosaki, who authored the popular Rich Dad series of books, has mapped out a way for you to tell where you are and where you should be, if building wealth is your goal. He also gives you a plan on how to get there.

In his book ?Cash Flow Quadrant,? he introduces readers to a concept that the man he called his ?rich dad? introduced to him years ago. This quadrant is an illustration of where your money is coming from and subsequently how you think about money. Believe it or not, the two things go together.

For instant, if you are in the E quadrant, you are an employee in search of security. Someone in the S quadrant is self-employed and likes to be in control, to do things their way. A B quadrant person is a business person. (This is very different from an S-quadrant person because the B has a system that can work without their direct input, thereby freeing them for other, wealth-building, pursuits.) The I quadrant person is an investor.

According to Kiyosaki, that quadrant not only tells you where you are, but where you should be. If you are on the left side, in either the E or S quadrant, you should be making plans that will move you to the right side?first to the B quadrant then into I.

In order to do that, you need to increase your wealth by taking a job that affords you the money to invest or the time to build a business system. The system will take care of your personal needs, afford you the time to learn about investing, and provide you with the cash to purchase real estate equity. And that, my friend, is something that will make your cash grow like kudzu.

That is how you get ahead. It is a process, and you have to be systematic about it. You can’t just jump into investing without knowing what you’re doing. That is foolhardy and dangerous. You also can’t jump in if you haven’t gotten your basic needs covered. First, make sure that is taken care of. Then expand.

Kiyosaki compares the process to playing Monopoly. If you are going to win at Monopoly, you have to buy land. Then you have to put little green houses on that land, which you can later trade for big red hotels. Then you get paid.

About the Author:

Alex Anderson Helps Regular-People (Just Like You) To Successfully Invest In Real Estate. Enroll In Her Free - Educational “Investment Property Program” At: www.GreatInvestmentProperty.com

Real Estate Investing - How To Get Ahead

We all want to get ahead. You hear people say it all the time. But what exactly does that mean? It’s kind of a vague statement, but it sounds good. Basically, it means that you want to have more money?maybe get your earnings ahead of your cash depletion. Maybe it means you want to be able to save enough to send your kids to good universities, or be able to take your family on annual vacations. It could mean that you want to squirrel away a retirement fund.

Whatever your particular idea of getting ahead, it does imply some sort of motion?movement from where you are now to where you want to be. That means you must figure out exactly where you are now and where you should be going. Once you start to think about it, though, you may find those places are a little more difficult to determine than you had originally thought. You may find yourself beginning to struggle with just what your particular concept of getting ahead is.

Robert Kiyosaki, who authored the popular Rich Dad series of books, has mapped out a way for you to tell where you are and where you should be, if building wealth is your goal. He also gives you a plan on how to get there.

In his book ?Cash Flow Quadrant,? he introduces readers to a concept that the man he called his ?rich dad? introduced to him years ago. This quadrant is an illustration of where your money is coming from and subsequently how you think about money. Believe it or not, the two things go together.

For instant, if you are in the E quadrant, you are an employee in search of security. Someone in the S quadrant is self-employed and likes to be in control, to do things their way. A B quadrant person is a business person. (This is very different from an S-quadrant person because the B has a system that can work without their direct input, thereby freeing them for other, wealth-building, pursuits.) The I quadrant person is an investor.

According to Kiyosaki, that quadrant not only tells you where you are, but where you should be. If you are on the left side, in either the E or S quadrant, you should be making plans that will move you to the right side?first to the B quadrant then into I.

In order to do that, you need to increase your wealth by taking a job that affords you the money to invest or the time to build a business system. The system will take care of your personal needs, afford you the time to learn about investing, and provide you with the cash to purchase real estate equity. And that, my friend, is something that will make your cash grow like kudzu.

That is how you get ahead. It is a process, and you have to be systematic about it. You can’t just jump into investing without knowing what you’re doing. That is foolhardy and dangerous. You also can’t jump in if you haven’t gotten your basic needs covered. First, make sure that is taken care of. Then expand.

Kiyosaki compares the process to playing Monopoly. If you are going to win at Monopoly, you have to buy land. Then you have to put little green houses on that land, which you can later trade for big red hotels. Then you get paid.

About the Author:

Alex Anderson Helps Regular-People (Just Like You) To Successfully Invest In Real Estate. Enroll In Her Free - Educational “Investment Property Program” At: www.GreatInvestmentProperty.com

Real Estate Investing - How To Get Ahead

We all want to get ahead. You hear people say it all the time. But what exactly does that mean? It’s kind of a vague statement, but it sounds good. Basically, it means that you want to have more money?maybe get your earnings ahead of your cash depletion. Maybe it means you want to be able to save enough to send your kids to good universities, or be able to take your family on annual vacations. It could mean that you want to squirrel away a retirement fund.

Whatever your particular idea of getting ahead, it does imply some sort of motion?movement from where you are now to where you want to be. That means you must figure out exactly where you are now and where you should be going. Once you start to think about it, though, you may find those places are a little more difficult to determine than you had originally thought. You may find yourself beginning to struggle with just what your particular concept of getting ahead is.

Robert Kiyosaki, who authored the popular Rich Dad series of books, has mapped out a way for you to tell where you are and where you should be, if building wealth is your goal. He also gives you a plan on how to get there.

In his book ?Cash Flow Quadrant,? he introduces readers to a concept that the man he called his ?rich dad? introduced to him years ago. This quadrant is an illustration of where your money is coming from and subsequently how you think about money. Believe it or not, the two things go together.

For instant, if you are in the E quadrant, you are an employee in search of security. Someone in the S quadrant is self-employed and likes to be in control, to do things their way. A B quadrant person is a business person. (This is very different from an S-quadrant person because the B has a system that can work without their direct input, thereby freeing them for other, wealth-building, pursuits.) The I quadrant person is an investor.

According to Kiyosaki, that quadrant not only tells you where you are, but where you should be. If you are on the left side, in either the E or S quadrant, you should be making plans that will move you to the right side?first to the B quadrant then into I.

In order to do that, you need to increase your wealth by taking a job that affords you the money to invest or the time to build a business system. The system will take care of your personal needs, afford you the time to learn about investing, and provide you with the cash to purchase real estate equity. And that, my friend, is something that will make your cash grow like kudzu.

That is how you get ahead. It is a process, and you have to be systematic about it. You can’t just jump into investing without knowing what you’re doing. That is foolhardy and dangerous. You also can’t jump in if you haven’t gotten your basic needs covered. First, make sure that is taken care of. Then expand.

Kiyosaki compares the process to playing Monopoly. If you are going to win at Monopoly, you have to buy land. Then you have to put little green houses on that land, which you can later trade for big red hotels. Then you get paid.

About the Author:

Alex Anderson Helps Regular-People (Just Like You) To Successfully Invest In Real Estate. Enroll In Her Free - Educational “Investment Property Program” At: www.GreatInvestmentProperty.com

Real Estate Investing Ethics - When is Lying Just Being Creative?

Here’s the story. An investor- we’ll call him “Bill”- was preparing to close on an investment property. He received a copy of the final loan documents via fax, and took the opportunity to look them over so he would be prepared to sign them at closing the following day.

Bill was surprised to find that the loan application contained some glaring inaccuracies, including a gross overstatement of his income and a property usage declaration stating the property would be used as his second residence. In fact, Bill had clearly informed the mortgage broker he had no intention of ever living in the home.

Bill was in a bad position. He was committed to closing on the property the next day, or he faced over $100 per day in penalties. Yet he knew that signing the application with the false statements was an act of fraud. What to do? What would you do?

The answer to that question is at the heart of a growing split in the ranks of real estate investors, and I believe it reflects a similar split in our society as a whole.

Many would look at Bill’s situation and claim, ‘It’s not his fault- he didn’t tell the lie, the broker did! Look at what he stands to lose if he doesn’t close. Besides, he committed to close on that house- he can’t back out now. He should just go ahead and sign the documents. It will work out alright in the end, especially since he’s just going to flip or refinance the property within a year anyway.”

The other side of the argument states, “Signing those documents is clearly loan fraud, and quite simply lying on Bill’s part. Even though the original deceit wasn’t his, once he signs his name he knowingly becomes a party to it, and the loan would be funded under false pretenses. Even though it may cost him money, and possible the deal, Bill should refuse to sign and try to work it out some other way.”

There is no middle ground here, and if you plan to invest over the long term you WILL face some similar dilemma. The question is not IF but WHEN. Now, not when you are in the heat of the moment, is the right time to decide how you will respond.

Simply stated, what kind of person are you? The kind for whom ethics are relative to the situation you are in, and how much pressure you’re under? Or, are you a person who knows right from wrong and is prepared to do the right thing no matter the consequences?

The more of us who choose to be the second kind of person, who choose right every time, the better will be our industry and, by extension, our society and our world.

The answer to the question in the title? When is lying just being creative? Never. Lying is always just plain lying.