Category Archives: Media

Interview with FW Inc Magazine

Jeremy Brandt interviewed by Fort Worth, Inc. Magazine
Jeremy Brandt interviewed by Fort Worth, Inc. Magazine

The kid who sold you chocolate bars in the neighborhood? Yeah, that kid. He went big with a couple of digital real estate platforms.

Jeremy Brandt was that kid. The one who bought bulk candy at Costco and sold it for profit in the neighborhood. The one who went door to door selling the surplus leather gloves his dad brought home from his job at the machine shop; who got a job at 16 at a computer shop and resold the discarded parts at a flea market.

The computer store job led to freelance work designing computer networks, which led to a consulting gig at the height of the tech bubble. “I had 15 or 20 people reporting when I was 19, which was ridiculous,” Brandt says. Then the bubble burst, and Brandt was out of a job in his early 20s. What next? He put his expertise in technology to work with a friend who was flipping houses. Today, at 37, Brandt owns Fast Home Offer, one of the country’s largest lead generation businesses, and WeBuyHouses.com, a national licensing platform for investors. In his spare time, he helped co-found the Fort Worth chapter of Entrepreneurs’ Organization.

“I’ve been a lifelong entrepreneur since I was seven,” Brandt says. “I’ve just had an aptitude for viewing the world that way. Even the bad things look like an opportunity.”

Growing up homeschooled:

Being homeschooled afforded me the ability to do what I wanted and excel at it, not spend a set amount of hours in school. My parents really encouraged that.

His fast start in real estate:

When I got started in this business, the first thing I did was put an ad on the Internet to buy houses. Because nobody else was doing that at the time, everybody that went to the Internet wanting to sell their house quickly contacted me.

Founding Fast Home Offer, 2002:

I started getting home sellers from all over the country contacting us. And I wasn’t going to fly to Miami to look at a property. So I cold-called investors in Miami and L.A., asking them if they were buying houses and if they would give me a fee if I sent them a lead. Now, we do large marketing campaigns all over the country; people who want to sell their house quickly contact us and then we refer them out to our clients, local real estate agents and investors. We work with about 10,000 home sellers a month.

How he gets paid:

Fast Home Offer is a bid-based subscription service. Let’s say you’re a real estate investor in Dallas and you want all the leads we can generate in Dallas and you pay us $100 a lead for home sellers in Dallas County. We’re selling every lead to you. If another investor wants to come in and buy leads, they’ll need to pay over $100 to join the market, bidding the price per lead up. And at any time, you have the opportunity to go over the top of him.

Where the idea came from:

We modeled it after Google’s Adwords system for advertising. The problem it allowed us to solve is that our advertising costs are incredibly variable by market. In Dallas, it might cost one-fourth to generate a lead, for example, what it costs in Los Angeles. We needed a way to match our revenue to our costs.

What his leads sell for:

Nationally, there’s a wide range because it’s a bid-based system. The price could be anywhere from $50 to many hundreds of dollars per lead. The price is lower in North Texas than the coasts.

Buying WeBuyHouses.com four years ago:

I was looking for a brand that I could build a company under that could give reputable  investors a national brand under which to operate.

His pet peeve:

One of the biggest problems in our industry is there are a lot of people coming out of real estate seminars who don’t know what they’re doing. A lot of these seminars teach ‘no-money-down’ investing. While it’s possible to buy a house with no money down, these seminars are churning out legions of people who do not have the money to buy a house.

How WeBuyHouses.com works:

We find people that fit our criteria from an experience standpoint, ability-to-close standpoint, and an ethics standpoint, and then we license our brand and provide marketing, technology, and ongoing education support to them. That generally looks like a license up front that might be $20,000 -to- $50,000 and an ongoing monthly license fee that might be a couple thousand dollars. People operate as WeBuyHouses.com in their local market.

 

Tim Harris Real Estate Coaching Radio Interview

Today I did an interview with Tim Harris, a real estate coach and founder of Real Estate Coaching Radio.

We primarily talked about our lead generation platform for real estate agents and how to grow a business by working with motivated home sellers.

Go to 14:08 to hear me explain what I believe is the most important thing an agent can do when working with home seller leads.

Listen to the Complete Interview Here

Tim Harris

Tim & Julie Harris

 

Interview with Jim Krautkremer, Top Real Estate Broker

Jim Krautkremer has been a client of Fast Home Offer for many years, and I’ve enjoyed seeing his business continue to grow as he’s implemented many of the strategies we teach real estate agents.

He’s now started a real estate coaching company, helping agents build their own business by working with motivated home sellers.

We sat down for a call to discuss various real estate topics, and how agents can best take advantage of our Fast Home Offer program.

Here’s the full interview.. Enjoy!

Jim Krautkremer
Jim Krautkremer

 

Investing Coast 2 Coast on We Buy Houses with Jeremy Brandt

Today I had the pleasure of speaking with Pete Asmus for his radio show Coast 2 Coast Investing about our We Buy Houses® program and how we are helping real estate investors grow their business.

We cover a lot of topics and Pete has as much energy as anyone I know!

Here’s the full interview along with a link to Coast 2 Coast REIA.

Investing Coast 2 Coast with Pete Asmus

Fortune Magazine – Protect Your Ideas

I recently did an interview with Verne Harnish with Fortune Magazine about how we protect intellectual property at We Buy Houses®.  Here’s my excerpt and the full article below.

 

 

4. Play offense

Jeremy Brandt, whose Dallas real estate investing firm We Buy Houses owns the trademark to its brand, knows he has to stop infringers so he doesn’t lose control of the trademark. He has a team of legal interns track unauthorized uses — and the company’s efforts to stop copycats — in its customer relations management system. Once warned that they’re infringing on a federally protected trademark, some violators ask to license the brand. “This has helped our sales process,” he says.


Here’s full story from Fortune Magazine.

1. You snooze, you lose

Eighty-eight percent of big companies’ value is based on their brands, methodologies, content, training systems, and other innovations, and the same holds true for many smaller players, says attorney Andrew Sherman, a partner at Jones Day and the author of Harvesting Intangible Assets. Unfortunately, he says, many firms are “asleep at the switch” and don’t protect their assets — to their peril. Do an intellectual-property audit with your attorney to prevent rivals from monetizing your ideas.

2. Speed counts

Until 2013, you had to prove you invented something first to own it. Now, under the Leahy-Smith America Invents Act, the first to file for a patent usually wins, says Dallas intellectual-property attorney Russ Schultz. To beat lumbering Goliaths, apply now for provisional patents, which you can write in a week, to get a year’s protection, says Doug Hall, CEO of Cincinnati-area innovation systems company Eureka! Ranch. “To the nimble go all the rewards,” he says.

3. Lock down contracts

Insist that contractors for creative projects like writing software sign an ironclad work-for-hire agreement that says you own the copyright. Otherwise, the law assumes that they own it. Also, have staffers sign employment contracts that assign you ownership of their inventions. Have you forgotten to do this? “Now is the time to get it fixed,” says Sherman — especially if you plan to sell the firm. Prospective buyers will walk if you’re missing this paperwork.

4. Play offense

Jeremy Brandt, whose Dallas real estate investing firm We Buy Houses owns the trademark to its brand, knows he has to stop infringers so he doesn’t lose control of the trademark. He has a team of legal interns track unauthorized uses — and the company’s efforts to stop copycats — in its customer relations management system. Once warned that they’re infringing on a federally protected trademark, some violators ask to license the brand. “This has helped our sales process,” he says.

5. Hire legal veterans

You’ll be better off with seasoned pros in a boutique law firm than with inexperienced associates in a giant firm. “The quality is better and cost is lower if you can work with senior partners who have been doing patent prosecution for a long time,” says Andrew Levi, founder of Dallas digital marketing and analytics firm Blue Calypso. He has used that strategy to obtain and protect five patents, with six pending — vastly increasing the firm’s value.

 

What your e-mail address says about you

CNN has a story today about “What your email address says about you“, largely in response to Facebook releasing their pseudo-email platform.

The story was tongue in cheek, but many business people (especially older ones) don’t realize the message they are sending with their email address.  If you have any type of business or professional service (real estate agent, CPA, lawyer, restaurant, etc) there is no excuse to not have an email address @yourcompanyname.comIt costs nothing.

Here’s my favorite from CNN’s article:

@aol.com = You are over 70 and still have the same email address you did in 1997

Fair or not, if you send an e-mail from an Aol account, the recipient is likely to expect it to be spam, a forward of some thoroughly debunked conspiracy theory or pictures of kittens.

Walking Away from a Foreclosure & Strategic Defaults – 60 Minutes

The other day 60 Minutes ran another report on “Strategic Defaults” as they are called – home owners who are underwater in their mortgage and walk away from their home (causing a foreclosure) even though they have the ability to continue with mortgage payments.

The most interesting thing about the story was a University of Arizona paper entitled “Underwater and Not Walking Away: Shame Fear and the Social Management of the Housing Crisis”  (Typical University title for a paper!)

It’s a fascinating read if you have some time.  We can debate all day long the ethics of home owners walking away from their obligations, but the fact that it’s happening isn’t in dispute – and real estate agents, investors and other professionals should be thinking through the ramifications of it for their business.

Most home owners don’t realize (or maybe don’t care) that there are many alternatives that are much better than a foreclosure – a loan modification or short sale are all much better alternatives to giving up and walking away.

Here is the 60 minutes segment

Short Sale Supervisor Talks to a Real Estate Agent – Recorded Conversation

The Short Sales and Bank Fraud story continues to gain traction. After CNBC aired the story we brought them, dozens of other media outlets, bloggers and authorities have contacted me to discuss this topic.

Here is the story of how this fraud initially came to our attention, along with the evidence to back it up.

Last year, I was contacted by an experienced real estate agent in our network who negotiates many short sales. She had recorded a conversation between her and a supervisor in the loss-mitigation department at a major national lender, who she felt was trying to get her to do something illegal.

Here is the audio of that recording, along with the transcript. The names have been removed at the request of the agent to prevent backlash from the bank.

Listen: Recorded Conversation with Bank Supervisor

AGENT: OK, so the only way to settle with *LENDER* then is to get money from somebody else and pay it prior to – that’s what *LENDER-EMPLOYEE* suggested – pay it prior to close of escrow, outside of…. <unintelligible> Pardon me?

LENDER: That is something you can do.

AGENT: Pay it outside of escrow, off the HUD, prior to close.

LENDER: Right, that’s something you could do.

AGENT: And is that something you guys do regularly or you see people doing?

LENDER: Yes, that happens – we have people that send us money outside if they need approval letters <unintelligible> from the first, and once we receive the additional funds, the approval letter can be sent for what the first actually offered – so it happens.

AGENT: OK and what about the fact that the first says that, no more than you know, a certain percent is to go to the second?

LENDER: OK, if the first… Here’s the thing, if you’re asking what this is about – the first is saying “well here’s what I’m going to allow” and the first is saying “this is what we’re willing to pay out.”  If there’s a contribution, if you don’t want to be able to come up with the additional that we’re asking for – the first has already gave their approval on what they’re doing – what someone just comes up with has nothing to do with the first.

AGENT: Even if on this letter it says that “the second is not to receive any more than a certain amount”?

LENDER: The first can not dictate what we receive. The first is saying what they are only going to allow. That’s the amount that they’re allowing to us. If someone out there – the buyer – or a family member puts more money and says here’s what I want to give for you because here’s the additionally requested funds – that has nothing to do with the first.
You’re not asking the first to come out of their pocket any extra than what they are willing to give. So that that’s not any information that might have to be required on the HUD.
Hold on one second please.  <long pause>

LENDER: So I need to have the information – you’ve had the opportunity to go over this with *LENDER-EMPLOYEE* – did he explain all this to you on how this takes place?

AGENT: Well he does but I’m having a tough time, ******, I’m licensed and everybody else…

LENDER: It’s not illegal; it’s not a hard thing, this thing that has happened. The information that you’ve actually received from us – we’re actually trying to help you get this deal closed. If you choose to go back and tell the first what’s going on – you’re going to kill the deal.
So what actually happens prior to closing has nothing to do with the first. What happens at closing – that is information you can provide to them. If you are able to come up with additional funds not to get this deal closed prior to closing, then that’s fine – that’s irrelevant for the first. If you go ahead and you want to let the first know “well, here’s all the information that I have – here’s what’s going on” you will be the one to actually kill this deal. I’m trying to actually give you a way to go about getting this resolved. If you take our suggestion – you take the information that *LENDER-EMPLOYEE* has given you – you can have this done.
If not, then you know, those guys are going to foreclose on it and it’s a done deal. But it’s not like we’re holding up this process.

AGENT: Well, what about the form that the buyer’s lender puts out that there are – that everybody has to sign that says there are no side deals?  <long pause>
I mean that… How do I get around that?

LENDER: What you need to take care of actually is not going to be a problem. What they submit to us – there is $****** they are giving us – the only thing you have to worry about – I mean it sounds like you’re scared that you’re going to be fined for something because you are doing something you are not supposed to. This is what we do all day.

AGENT: Well yes, I don’t want to lose my license, go to jail, I mean, I have to sign…

LENDER: You’re not going to lose your license – we have plenty of realtors who do this, who actually understand how this whole process goes – and they realize that OK, if I want to get this done, this will take place. Nobody’s losing their license and nobody’s going to jail, nobody’s receiving a fine…
So and here’s the thing too, I’ll be really honest with you, if you are uncomfortable about working it, you can probably assign it over to someone else, where they would be able to do this – if it makes you feel that uncomfortable – you should probably just assign it over to someone else. Someone who’s actually been able you know – who’s done this before, who’s more familiar with it.
Not to be disrespectful or rude to you or anything like that, but we deal with this every day all the time, this is not something out of the norm. But if you feel like you are doing something that’s against your morals, please assign it to someone else who’s been able to do deals like this so they can get it done, and you can have a happy buyer and a happy seller.

AGENT: Well, how do I get, I mean what’s the logic or if I could understand – when I’m signing a paper put out by FHA that says there are no side deals – this is a side deal.

LENDER: This is a contribution. <long pause> You guys are able to come up with money in order to get this deal closed.

AGENT: OK

LENDER: OK. So the offer that we have it still stands – you can call *LENDER-EMPLOYEE* back and let him know if, what you’re going to do, and if you guys foreclose, we understand. If you’re not comfortable with this – go ahead and assign it over to someone else.

AGENT: <sigh> OK, well thank you for your time.

LENDER: No Problem

Short Sale Story Continues

The response to the story we brought CNBC on fraud in short sales has been amazing!

The whole goal of getting this story out there was to change the practice and prevent it from happening in the future.  It’s obvious from the response that this is a major issue, hopefully the authorities will take notice and investigate this practice.

Here is Diana Olick’s follow-up:

CNBC – Short Sale Fraud Follow Up

Our investigation into allegations of short sale fraud by some of the nation’s major lenders certainly struck a nerve in the lending community, but it also served to show me just how uneducated many in that same community still are, even today.

It’s clear from the dozens and dozens of comments on the blog page that many mortgage professionals still aren’t sure how exactly short sales work, and what is and is not legal.

Due to some technical difficulties on air Friday, I was unable to show a couple of MLS listings that were sent to me that clearly, on the public listing, demanded cash to the second lien holder outside of settlement as part of the transaction. Just so you know, that’s illegal. Yes, a second lien holder can demand payment on the loan, but it has to be documented as part of the sale.

And then just a few minutes after the story aired Friday, I received another email from my whistle-blower, Kayte Gentry:

Diana – we thought it funny that this came in about 10 minutes after the 2nd airing of the story…the email is to my Lead Negotiator.

“Linda,

The agent contribution of $500.00 can’t show on the HUD. Have that removed and resend just the HUD.

If it shows on the HUD the investor thinks they are getting it and not the 2nd lien holder.”

The author of the email reportedly works at Citi, as her email address shows. I have to believe/hope that she doesn’t even know what she’s demanding is illegal, otherwise I can’t imagine she would put it in an email. This is clearly fraud.

I also went on another real estate Web site that specializes in Realtor blogs, and there was a huge string/conversation of real estate agents explaining to each other how to keep second lien payments in short sales off the HUD settlement statements. Right there, in black and white, on the web.

I hope someone in regulation land is listening!

CNBC – Big Banks, Short Sales, Kick Backs and Fraud

This morning CNBC aired the story we brought them regarding short sales, bank fraud and kick-backs to banks.

—————————–

Diana Olick  — CNBC Real Estate Reporter
Big Banks Accused of Short Sale Fraud

Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.

I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.

His companies include 1-800-CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he’s been receiving all kinds of questions and complaints about trouble with second lien holders.

As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used “piggy back” loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don’t qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan). About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.

In order for a short sale with two loans to happen, the second lien holder has to drop the lien.

If they don’t, and there’s no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.

In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn’t have to agree, but more and more are doing so.

That’s all legal.

But here’s what’s not legal and what’s apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say “on the side,” I mean in cash, off the HUD settlement statements, so the first lien holder doesn’t see it.

“They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale,” says Brandt. “So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal.”

(RESPA is the Real Estate Settlement Procedures Act, the 2008 law requiring that consumers receive disclosures at various times in the transaction. It outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD. Read more about it here.).

I told RESPA specialist Brian Sullivan over at HUD about all this and he replied, “That’s a red flag!”

Clearly illegal.

Brandt told me he’s heard from at least 200 agents that they’ve had these requests made by representatives of Citi Mortgage, JP Morgan Chase, Bank of America and other large banks.

Most agents wouldn’t go on the record with me, for fear of retribution by the banks with whom they have to work every day. But one agent, Kayte Gentry, of Keller Williams Integrity First Realty, was brave enough to blow the whistle.

“I think it’s wrong, and I think somebody needs to hold them accountable, and every time I lose a house in foreclosure because of this, it hurts my client,” says Gentry matter-of-factly. “Aside from being illegal and a violation of RESPA, it’s immoral and truly it’s just sad for the client that it’s hurting.”

Gentry says she has had the requests made three times and claims she lost one sale because of it.

“The big banks that have recently made this request, specifically payments outside of the closing statement have been Citi Mortgage and JP Morgan Chase.”

JP Morgan Chase simply answered, “No Comment,” when I relayed the charge to their media representative.

Bank of America denied the practice to CNBC in a written statement:

“Bank of America enforces a policy that all disbursements are documented on the settlement statement for short sales. When we are servicing a first mortgage with a second lien held by another investor, if the second lien holder asks for off-HUD payments, we will not approve the transaction (if we have knowledge of it). It is also against Bank of America’s policy to accept off-HUD payments on its second liens.”

Citi ‘s reply was a bit more complicated:

“We work very hard to help distressed homeowners find solutions for their financial challenges. In our attempt to amicably resolve the debt, we will generally negotiate a reduced settlement with the homeowner in order to release a second lien. Unlike some lenders who refuse to reduce the payoffs on second liens, we choose to reduce the payoff amounts in some situations to assist the borrower. We do not provide instructions to settlement agents on how to fill out the settlement statement or any other closing documents, and we certainly do not require settlement agents or any other parties to violate applicable laws.”

“When we confront the lenders and tell them that this request is illegal and a violation of RESPA, they tell us it’s been cleared through legal and they don’t care. Do it anyway,” charges Gentry.

I personally heard a recording of a phone conversation between a short sale real estate agent and a second lien lender, during which the second lien lender clearly asked for cash outside of the settlement and threatened to kill the deal without it.

The real estate agent was rightly concerned and reluctant (the recording was given to me by Brandt who got it from the agent. The agent would provide no information on the lender, for fear of retribution):

AGENT: Well yes, I don’t want to lose my license, go to jail, I mean, I have to sign…

LENDER: You’re not going to lose your license – we have plenty of realtors who do this, who actually understand how this whole process goes – and they realize that OK, if I want to get this done, this will take place.”

I contacted the Treasury Department, HUD, FINCEN (Financial Crimes Enforcement Network) and the Federal Trade Commission, and none of their representatives could tell me of any active investigation into this. The folks at HUD said they’d be very interested to see my story.