Rental Guarantee Property Scam - is it legal in the DR?

George101

Member
Jul 9, 2017
33
3
8
Dear Experts,

Back in my day there was a popular scam that became very popular with the FBI and Home developers. It was a fraudulent scheme called "The Rental Guarantee Scam". The scam was simple enough to defraud mostly elderly into losing their lifesaving. The scam had three elements. Rental Guarantee backed Mortgage > False Advertisement ( Claims of high occupancy rental income by a marketing person ) > Foreclosing on victims using the mortgage worth more than the property itself. Some would argue there is a fourth element to the scam, Finding Elderly Victims. Generally the scam required Three people; a lawyer, developer and marketing expert. The victims couldn't pay the mortgages because the high rental amounts were not achievable ( not even close ).

In recent years, I've met a lot of elderly people who have fallen victim to this scam and the people running those scams have not been placed in jail. In general, it is heinous act only the worst of the worst could imagine. The North Coast, seems to have developers using this scam to sell houses. Is this sort of scheme legal in the Dominican Republic?
 
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ctrob

Well-known member
Nov 9, 2006
5,138
208
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The North Coast, seems to have developers using this scam to sell houses.
Who? I see realtors inflating potential rental returns, but I haven't seen anyone offering guarantees. And if somebody is, the buyer should be having an atty review it. A lot of times a realtor will use High Season rental figures instead of a yearly average. That's a scummy way to do business, but hardly illeagal. As always, Buyer Beware.

And honestly, people shouldn't be jumping into any business that they aren't experienced at. So many people jump into real estate investing thinking they can manage that business because the have experience living in a house. That has never made sense to me.
 

George101

Member
Jul 9, 2017
33
3
8
Who? I see realtors inflating potential rental returns, but I haven't seen anyone offering guarantees. And if somebody is, the buyer should be having an atty review it. A lot of times a realtor will use High Season rental figures instead of a yearly average. That's a scummy way to do business, but hardly illeagal. As always, Buyer Beware.

And honestly, people shouldn't be jumping into any business that they aren't experienced at. So many people jump into real estate investing thinking they can manage that business because the have experience living in a house. That has never made sense to me.
Don't want to name names. I want to know more about the legality of this scheme since it is a very old scam but seems to be in full operation here in the DR. High season or low season seem to be both outrageously inflated. The sad part is, its foreigners running these scams which in my option hurts the DR reputation. Many of the developers who once operated these scams in the US have modified their marketing to avoid the claims against them for fraudulent advertisements. Here in the DR, those people seem to not care very much about fine tuning their advertisements to avoid the illegal part of it.