Dennis Norman Musings

Dennis Norman

By: Dennis Norman

This past Monday I did a post on short sales where I addressed the use of option contracts by investors on short sales.  Since then I have spent a lot of time discussing and researching this approach to short sales.

I always try to keep an open mind when I look at new business models and approaches to investing.  With this in mind I set out to learn more about the option approach to short sales.  My research led me to one Nathan Jurewicz, a 28 year-old with neon orange hair, known as the “short-sale kid” and the peddler of the “ShortSalesRiches” program.

Nathan sells a program revealing his secrets on getting rich doing short sales.  His approach is based upon obtaining an option to purchase a home from someone that owes more than their home is worth, then once the lender has agreed to the discounted price, proceed to try to find a buyer at a higher price.  When the deals work you make money without ever taking any real risk or putting up a dime.

Sound too good to be true?  Yep…but I don’t really doubt that he is doing the amount of business he claims to be doing.  My concern is the approach itself…basically the money an investor makes using this approach is at the expense of the lender, as well as the seller if the lender does not release the borrower from liability for the shortfall.   Granted I spent many years buying thousands of homes to resell them for a profit so one could argue that I did the same thing, made money at the expense of the seller I bought from.  The big difference is I (or my company) actually bought the homes….we put up the money and took the risk of owning the homes.  In the case of the option, the investor is typically not taking any risk whatsoever as he/she does not purchase the house unless they have it resold. 

In addition when I bought property the seller would normally shop around and get offers from several companies….therefore even though the seller may have been selling for less than full value due to the circumstances or timing that they were selling under, they were still getting the best price at the time.  With the option approach the seller is not only not getting multiple offers or really testing the market, at the time the sale is consummated it is a known fact the seller is not receiving market value…..market value is the price the “option” investor is selling the house for the same day.

In doing my research I ran across an interesting video on youtube.com that appears to be Nathan Jurewicz celebrating a friends birthday.  In the video he repeatedly brags about the money he is spending, the money he makes without really working, etc.  If I was making a lot of money, without risk and without much work, at the expense of lenders and sellers facing financial trouble, I don’t think I would produce a video bragging about it and in fact rubbing peoples noses in it, but maybe that’s just me.  Click here if you want to see the video.

Back in May, Shannon Behnken with Tampa Bay Online did a pretty lengthy article on Nathan and his system, you can check it out here.