We've recently been made aware of some
clever investment scams out there. With the tightening of bank
lending standards — and the tight money market in general—there have
been many predatory lenders come to the front.
They pose as investors, or as Angel investors. In the last
I’ve learned of two instances of these scams targeting the kennel buyer
The way they work is to get you to give a deposit upfront, to “cover
their expenses”. Sometimes they really have offices; often their
office is just a cell phone. They frequently do not need an
appraisal; they can work off your business plan. They do not
need loan approval, and there is tons of cash available. They are
not too concerned with your credit; they are willing to help the
For many people wanting to buy an existing kennel business, this sounds like
heaven. Instead, it may be the beginning of a frightening loss of
whatever down payment you may have tendered.
No legitimate investor
wants to lend money on an unverified business. If no bank or legitimate
lender seems to think you are a good risk, why would someone loan
you the entire amount, with no guarantees, in many cases without
even having seen the property, much less have had a good appraisal?
These kennel property "investor" people are good at making their investment sound real. They
don’t call them “con men” for nothing. They are your salvation, and
your best friend, at least until they have your money. Then they are
mysteriously unavailable. No phone calls are returned, and they have
changed business addresses.
In one recent case, the property investor kept saying he’d sent the local
real estate broker the contract; the check for the earnest money
must have gotten lost in the mail. The contract was indeed sent,
after numerous requests, with none of the pertinent information
filled out. No check ever arrived. The closing attorney contacted
this investor, and was told it was to close in a few days. How was
this supposed to happen? There wasn’t a contract on the table! No
funds had ever been sent. No phone calls from either the real estate
broker or the attorney were ever returned.
The “investor” kept lying to the buyer until the very last moment.
Even up to the point that the buyer left his home and put his stuff
in a U-haul to move to his new home and take over his new business.
He had put his faith and confidence in this scam artist. Charges
have been filed with the FBI for Interstate fraud, and with the
Attorney General of the State involved. That doesn’t help the poor
buyer or the seller, both of whom were kept on the hook and made
plans based on the promised closing.
If you are dealing with a "kennel property investor" or investment group, be careful! If they want a deposit up-front, be even more wary. If the
concerned about an appraisal or says they are not worried about past
credit, run the other way and keep looking. Don’t deal with them.
is better to put off your dream until you can save sufficient
than to lose what money you have to a scam—and still not have your
dream kennel property.