The District of Columbia Department of Insurance, Securities and Banking (DISB) wants to remind consumers to be mindful of individuals soliciting them for real estate investments.
Sample Real Estate Investment Scam
Alice, a resident of the District of Columbia, knew Bill through her neighbor. Bill offered Alice the opportunity to invest in two distressed real estate properties. Bill advised her that he is a principal broker in the District of Columbia and that, with a $50,000 investment from her, he could repair the properties—he would do all the work and she would not need to do anything—and sell them for a profit. Bill promised to share the profit with Alice by sending her monthly payments of $625. Bill also promised to return her initial investment of $50,000 at the end of 12 months. Alice gave Bill the $50,000 without hesitation. Alice never received the $625 monthly payments or her initial investment, and Bill could not be located.
The Dos and Don’ts of Real Estate Investments
While real estate can be good investment for certain investors, District of Columbia consumers are encouraged to remember the following “Dos and Don’ts” when assessing opportunities to invest in real estate:
- DO consult with a licensed attorney prior to investing in any real estate opportunity.
- DO contact DISB before investing in any real estate opportunity. The Department can help you determine whether that person is properly licensed to sell securities in the District of Columbia.
- DO inquire about the individual’s or company’s other completed real estate investments and ask to speak to those investors about their experience.
- DO perform an internet search on the individual or company presenting the investment opportunity.
- DO contact the District’s Department of Consumer and Regulatory Affairs’ Occupational and Professional Licensing Administration to be sure the company offering the investment has the required professional licenses and those licenses are current at (202) 442-4320.
- DO immediately report all scams, or suspected scams, to DISB at (202) 727-8000 or disb.dc.gov.
For tips on avoiding similar scams, visit disb.dc.gov/page/consumer-scams.