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Ethical Creative Real Estate Investing



There are rules of the road. Sometimes we call these laws and regulations but not always. The rules don’t tell you so much what to do but rather what not to do. That leaves the investment road wide open to creative ideas as long as you do it responsibly. The single largest hurdle regarding creative investing deals is the level of business acumen or sophistication that all participants in the deal possess. By definition, creative financing (or creative deals) are nontraditional. The average consumer or Joe Q. Public does not use these techniques. The result is there are fewer rules and regulations governing them. Creative deals contain more complexity.

Real estate investing ideas

Bad apple investors use this lack of rules and higher complexity without scruples to defraud others. When this happens enough times, new rules and regulations are put in place to prevent it. Legitimate investors don’t benefit from more rules. For the sake of your own business reputation and the industry as a whole, it is always best to create ethical deals and even build in protections for less sophisticated investors and/or Joe Q. Public. 

Know How Sophisticated the Other Person Is

This is just plain good business sense. If the other person in the transaction has a deep knowledge of the type of deal you’re involved in and is unethical, you could be the one holding the short end of the stick. But that isn’t what I’m referring to here. This is about you being ethical when you encounter people that are unfamiliar with the type of deal that you are trying to put together. There are times when it’s better to walk away from a deal even if you could have made a killing. At times, sandwich lease options and seller financing can be these types of deals.

I’m a firm believer that sandwich lease options need to be win-win-win deals. For the seller, for you as the investor, and for the tenant/buyer. You are the sophisticated investor in the middle of the deal. Most of the time, the seller and the tenant/buyer are Joe Q. Public. They are depending you to put the creative transaction together. You MUST be sure everyone in the deal fully understands what the intended outcomes are and what the unintended outcomes could be.

Sandwich Lease Option Rules of the Road

The seller should be relatively secure in the deal since he/she holds the property title until the deal completely closes. However, this person could be highly dependent on the rental income until the deal closes. As an ethical creative investor in the middle, you have a responsibility to understand how dependent the seller is on that income and assure they receive the income – even at your own expense if your tenant/buyer doesn’t make the monthly payment. An unethical investor could force the seller to miss several payments until he/she is forced to sell for pennies on the dollar that was never the stated intention of the deal. As the investor, you should enter the deal prepared to keep the seller “whole.” If you find yourself in a position of not being able to do this, you should unravel the deal even if it means no benefit to yourself.

Understanding the sophistication of the tenant/buyer carries at least the same amount of responsibility for the investor. Failing to work earnestly with tenant/buyers is most the common cause for sandwich lease options to be considered unethical. It happens when an investor churns the large option fee. The typical lease-option buyer struggled to save most of the down payment needed (lease option fee) and is an entry-level buyer with a limited salary. But he/she can’t quite qualify for a mortgage at this time. This is an unsophisticated buyer. Investors have an ethical responsibility to assure these people fully understand the terms of the deal. Investors have a responsibility to strongly urge that the tenant/buyer seek outside legal advice. Investors have a responsibility to be sure the tenant/buyer has a reasonable opportunity to obtain a mortgage within the lease option period. This often means working with a mortgage broker and/or a respectable credit repair service. An ethical investor wants the tenant/buyer to succeed. There is no better word-of-mouth advertising than a tenant/buyer who has succeeded in purchasing the home.

Unethical Property Owners Usually Get Their Due

I was once involved with a person who grievously took control of a small portion of valuable land through adverse possession. It involved 11 feet of expensive lakefront property owned by an elderly man with Alzheimer’s. The standard lot had 60 feet of waterfront. The man with Alzheimer’s and the adjacent property owner both had double lots or 120 feet of waterfront.

The trespassing neighbor planted a hedge that angled from the common upper property line to cross over the line 11 feet at the water’s edge. This happened at about the time the elderly man was diagnosed with Alzheimer’s. He verbally complained several times about the hedge but never took legal action. Following his death, the heirs filed for the property title but the neighbor clouded the title by filing for adverse possession of the 11 feet. The heirs could not afford to pursue a legal challenge.

I purchased the contested lot for fair market value based on the 49 feet of waterfront the heirs could deliver and a promise to legally pursue the adverse possession. At a cost of about $8,000, I did pursue the case in court but lost. The legal requirement to obtain adverse possession in Washington s State is to have active possession for a minimum of 10 years. The trespassing neighbor was able to show photographs of a family event partially on the disputed property. The date of the event exceeded the statute by 3 months.

Although the trespassing neighbor received legal title to the 11 feet, he paid a dear moral price. He too was retired, elderly, and living in a small rural waterfront community. The entire community took great exception to his actions and fully shunned him. His social life ended for the remainder of his lakeside retirement. Such is the price paid for being unethical.

Please comment with your thoughts and experiences about ethical real estate investing.

Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions, inquiries, or article ideas to

Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 12 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, near a national and the Pacific Ocean.

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California’s vague new financial regulation law – Orange County Register



Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.

Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.

However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.

The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.

The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.

It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.

Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.

Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.

The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”

Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.

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Erie Homecoming 2020 to take place virtually



Erie Homecoming 2020: “Erie’s Economic Evolution” is happening this week.

Erie Homecoming is an event that shares the vision of where we are going as a business community and the specific projects that will be taking us there.

Yoselin Person was live outside of the Erie Regional Chamber to tell us more about what’s taking place at this year’s homecoming.

Get your favorite hot drink because Erie Homecoming is happening virtually. 

Rooms full of people just aren’t happening in the midst of a pandemic, so Erie Homecoming is an event that will inspire you from comfort of your home or office.

The purpose of homecoming is to give attendees the opportunity to learn how they can invest in the Erie community.

During this two day event, you will be able to learn how you can invest the time, talent and treasure in creating a more diverse and prosperous Erie community.

Erie’s Black Wall Street will be featured this year. It’s a nonprofit organization that’s known for improving black business.

“So, having it geared towards helping black businesses expand and spread their wings, I think that’s amazing,” said Alexandria Ellis, owner, She Vintage.

Ellis began her business six months ago. She says Erie Black Wall Street is a safe space where black entrepreneurs can connect and collaborate with others.

The organization also helps others with credit repair.

“They’ve helped me by connecting me with resources if someone is looking for a nail tech or a boutique that’s black owned, they have connected customers of their clients to me through their organization,” said Ellis.

Speakers from the black owned organization will speak about creating regional equity.

There will also be a discussion about Flagship Opportunity Zones and what it means in terms of tax and other investment incentives.

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RiverBend Growth Association announces new members | Business



RiverBend Growth Association encourages use of face coverings

The RiverBend Growth Association announces its new members:

5 Diamond Campground

Brian Campbell and Matt Diamond

2 Fun Lane

Hartford IL 62048

(618) 254-1180

Alton Pride Inc.

Jason Heeren, director of sponsorship

P.O. Box 662

Alton IL 62002

(618) 204-7420

Alton Pride is a charitable and educational organization established to bring awareness, understanding, and advocacy to the LGBTQ+ community with an emphasis on the specific needs of the youth within the community. We are setting ourselves apart from other Pride organizations by focusing on giving back to our community, rather than hosting just a parade or festival. We will be depositing a majority of event proceeds into a structured account funding our goal to develop a local teen suicide prevention line and a teen resource center to help youth in need.


Imo’s Pizza – Bethalto

Lori Bromberg, president/treasurer and managing partner

515 N. Bellwood

Bethalto IL 62010

(618) 258-0011

Bethalto Imo’s is owned by Charles and Barbara (Babs) Pelan. Barbara was a nurse and Charles has had a varied career but has always had an entrepreneurial spirit. He and Babs purchased the Bethalto Imo’s in 2013 and seeing the success of the brand and the store in Bethalto were anxious to purchase the Edwardsville Imo’s franchise in 2014.

Their daughter, Lori Bromberg, is the managing partner and provides leadership and daily oversight to the business. Lori has a bachelor of science degree in management and has 31-plus years in corporate leadership roles, including customer experience, supply chain, distribution strategy, change management, hr/talent management, training and safety. Lori also is a certified mentor for SCORE providing mentoring and coaching to small businesses.

While it is our goal to have a financially successful business, we believe the cornerstones to achieving success is ensuring a superior product and customer experience, investment in our employees, positive contributions to our community, while demonstrating a strong commitment to safety. We pride ourselves on our commitment to Imo’s corporate mission, “To maintain the Imo’s tradition of uncompromising quality, pride in Imo’s products, and passion for success and for customers to experience a genuine, original St. Louis pizza of the highest quality, served in a pleasant atmosphere or at home, so that they too will have reason to say: “Imo’s is my favorite pizza.”

If you frequent our Bethalto location, we will be moving down the street a little over a mile, still on 111, within the next month or so.  We will continue to have delivery and pick-up as well as offer new patio seating.


Lewis and Clark Community College Foundation Inc.

Mark Kratschmer, president

5800 Godfrey Road, ER 0210

Godfrey IL 62035

(618) 468-2010

The Lewis and Clark Community College Foundation is a nonprofit corporation organized under the laws of the state of Illinois. The foundation supports Lewis and Clark Community College and its students through scholarships, awards, and other assistance.

Piasa Body Art

Cody Hinkle, owner

560 E. Broadway

Alton IL 62002

(618) 462-1720

Alton’s best body art shop, offering tattoos and piercing services. Now with The Salon for all your hair care and barbering needs!

Prosper Credit Consultants

Jerheart Huntley, owner

525 Wyss Ave.

Alton IL 62002

(877) 503-7465

Credit repair that works! Prosper Credit Consultants uses the most innovative processes to make sure our clients are educated on how credit repair works! Prosper Credit Consultants is dedicated to educating our clients on how to get and keep good credit! We have become a one-stop shop for all things from credit repair, building credit for beginners, trade lines, putting our clients in position to purchase that new car, and home they want. Give us a call (877) 503-7465 or set up a free credit consultation.

The RiverBend Growth Association is the chamber of commerce and economic development organization for the 12 communities known as the Riverbend.  For more information about the Growth Association, visit or call (618) 467-2280.

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