Shell Game (Stand Alone 2) Read Online Free PDF Page A

man said.
    “That’s correct, sir,” Gerald responded. “It’s a $31,000 balance with a six percent interest rate. The asking price is $35,000, so you’d need four grand to put down, plus closing costs.”
    The man laughed. “I was born at night, but I wasn’t born last night . The owner of this place is out of work. He’s late on his mortgage payments. He needs out from under the mortgage bad. So, that’s what we’re prepared to do for him -- save his financial ass. We’ll assume the mortgage. He can cover the closing costs out of his pocket.”
    “Well, I can always present your offer,” Gerald said, suppressing an urge to laugh at the guy’s arrogance. “There’s no guarantee he’ll accept it.”
    “How much you wanna bet he’ll kiss your feet when he sees our offer?”
    Gerald just shrugged and wrote up the offer; sure it was a waste of everyone’s time.
    When the seller saw the offer, he didn’t kiss Gerald’s feet, but he looked like he might hug him.
    “Damn, I was afraid we’d never sell the house in this awful market,”
the seller said. “With the economy down and interest rates going up, I thought we’d have to declare bankruptcy.”
    “You realize you’re going to have to write a check at the closing table to cover closing costs?” Gerald asked.
    “Yeah, I understand. But it’s better than ruining our credit.”
    When Gerald called the buyer to let him know he’d made a deal, the man said, “No shit, Sherlock. It’s like stealing candy from a baby.”
    What an asshole, Gerald thought. But he was captivated. “You sound like you’ve done this before.”
    “Twenty-three purchases in less than six months.”
    “Holy . . .” Gerald couldn’t complete his phrase.
    “You heard right,” the man said. “Twenty-three houses at an average price of $33,000, with an average interest rate of five and three quarters percent, and no money down. As long as the FHA allows buyers to assume mortgages without having to qualify financially, I’m going to buy these places hand over fist.”
    “What’re you doing with them?”
    “What do you think I’m doing with them? I’m renting them out. People got to have a place to live. Most families would rather rent a house than an apartment, any day. Hell, I’ve rented some houses back to the people I bought them from. Even gave them an option to buy the places back down the road when they get back on their feet. At a profit, of course.” He chuckled at that. “I’ll hold the houses for seven to ten years and then sell them for at least twice what I paid for them. Mark my words. With the federal government spending money on Vietnam and the Great Society, inflation’s going to be the name of the game. Meanwhile, the schmucks who rent the houses pay down the mortgages.”
    “You looking to buy more of these FHA deals?”
    “Is the Pope Catholic, boy? Damn straight. Call me if you find any more.”
    Gerald wound up selling thirty houses to Warren Tatum, who he began calling The FHA King. Tatum was thrilled with Gerald, who was thrilled with the sales commissions, which he didn’t have to share. And for every house Gerald sold to Tatum, he bought one for himself.
    Then Gerald took the next step. He introduced himself to real estate lenders at local banks and savings & loans and convinced a couple of them, based on his success selling so many FHA properties, to list their foreclosed real estate properties with him. Gerald put together real estate limited partnerships that made low-ball offers on the best ones. He acted as the general partner of the partnerships, while investors – the limited partners – put up cash to cover upfront expenses, repairs, and operating costs until the places were rented. As general partner, Gerald made all the decisions and had full control over the properties. The banks were happy to dump real estate they’d taken through foreclosure from borrowers who fell behind on their payments, treating whatever money