CLEVELAND, OH (WOIO) –
A flurry of ads on local radio in Cleveland promises to teach the public how to quickly flip homes for profit from experts of HGTV’s “Flip this House”, but Cleveland City Council and other community leaders caution the public if it sounds too good to be true, it is. House flipping is not a get rich overnight investment, and it could end up costing the purchaser tens of thousands of dollars and possible jail time.
The Armondo Montelongo Find and Flip Real Estate Seminar will take place at hotels across Northeast Ohio during this week and uses the popularity of HGTV’s “Flip this House,” along with the promise of making $10,000-$40,000 per deal, as an enticing draw with no money down and no credit.
The seminar is free to attend and claims to teach the public the secret to making money by flipping homes, but typically require fees for further training, often $1,500 or more per session. Dozens of complaints have been filed with Better Business Bureaus and government offices across the country. Four such events are scheduled for Greater Cleveland alone:
- Marriot East on August 8
- Marriot Airport on August 9
- Hilton Garden Inn Mayfield Village on August 10
- DoubleTree Hotel in Independence on August 11
“We as a city are not out of the woods yet when it comes to navigating the issues of home foreclosures, abandoned properties and companies preying on unsuspecting consumers to make a quick buck,” said Tony Brancatelli, Cleveland City Councilman. “It is upsetting to my colleagues and myself that so many radio stations have agreed to air this advertisement fully knowing the fragile condition our neighborhoods are in. Unsuspecting buyers could end up with properties that are well beyond repair, or have already been condemned.”
While house flipping and real estate can be a profitable business venture, it takes an informed and knowledgeable professional to research, buy, renovate, market and sell a home. Cleveland City Council wants prospective house buyers and flippers to be aware of the legal and financial responsibilities that comes with taking title and ownership of a property. Sellers of properties may not always be honest or knowledgeable about the home’s condition and various liens or other financial responsibilities. Furthermore, many unsuspecting investors acquire property through a quit claim with specific language that the buyer is responsible for municipal fees and assessments.
If you purchase a home in Cleveland, you may be responsible for:
- Any past-due taxes on the property
- Back water fees
- Back city assessment fees (board ups, lot cutting, etc.)
- Repairing all code violations on the property
- If the property is condemned, the owner is responsible for demolition costs including: attorney’s fees, costs of inspection, administrative and support staff, property maintenance costs, court costs, title search feed, process server fees, skip tracing, discovery and deposition expenses
- Responsible for pending legal actions against the property
“As a city we value those who have an entrepreneurial spirit,” said Jay Westbrook, Cleveland City Councilman. “Many residents have been successful in recent years with starting a business on their own. And Cleveland is benefiting from this. What we do not want to see is our residents tricked into believing you can make money overnight in buying, fixing and selling property. The real estate market is a difficult one to succeed in and it will take more than a brief workshop to make you an expert on the nuances it takes to succeed.”
The foreclosure and housing crisis has greatly affected the city of Cleveland and Cuyahoga County. More than 10,000 abandoned or unfit homes in the city need to be demolished or significantly invested in. The city alone has spent $30 million to date on demolitions. The combined impact of the housing market crash and economic downturn on Cuyahoga County is $1.5 billion is loss of value, making it very difficult for sellers to make a profit on property sales.
The city has taken on a number of initiatives, programs and legal actions to help stabilize neighborhoods transform our communities and hold responsible parties.
· Codified Ordinance Sections 3103.09 and 367.08: Allows the city to recover costs of demolition of condemned structures from any and all owners jointly from the time of the notice of condemnation to the demolition.
· Codified Ordinance Sections 3103.092 and 367.131: Anyone buying, owning, selling or transferring real property in Cleveland must register and identify a statutory agent with the Ohio Secretary of State
· Codified Ordinance Section 367.11: No person shall knowingly misrepresent the legal occupancy of a dwelling, building or structure as an inducement for the sale of such property
· Codified Ordinance Sections 367.112 and 367.113: Certificate of disclosure at sale
· Codified Ordinance Sections 365.01, 365.02, and 365.05: Rental registration upon ownership
Cleveland City Council encourages anyone with questions about property they are interested in purchasing to call a local licensed real estate agent or their local community development corporation. Unless an individual is an experienced investor, they should ask for a warranty deed from a reputable title company.
Article Courtesy of WOIO 19 Action News
LOCAL: Cleveland City Council Members Warns Residents on Get Rick Quick Seminar was originally published on wzakcleveland.com