Whether you are considering investing in real estate, or have already made the investment, it is important to recognize the warning signs of a real estate Ponzi scheme and to know what to do if you suspect a problem. Real estate Ponzi schemes have, unfortunately, been common in recent years and investors need to be aware of the potential scam.
Four Potential Ponzi Scheme Signs You Can't Ignore
While real estate Ponzi schemes may take different forms, there are often common signs that are apparent regardless of the way the scheme is presented to investors. Our experienced investment fraud attorneys recommend that investors be aware of:
- Unusually high rates of return. If a real estate investment seems too good to be true, given the current real estate market and financial climate, then you should assume that it is too good to be true. Unusually high rates of return are typically signs of a scheme and not a legitimate investment strategy.
- Specific guaranteed returns. Most legitimate investments do not guarantee specific returns because the money that you make is often dependent on factors outside of the control of your broker, advisor or agent. Specific guaranteed returns could be a sign of a potential problem.
- Confusing investment strategies. If investment strategies are very difficult, if not impossible, to understand then the person selling you the investment may be purposefully trying to keep you from understanding what is going on or may not understand it himself.
- Undisclosed investment strategies. If you are not provided with full and complete information regarding your investment, including the potential risks, then your broker may be trying to hide something, such as a scam.
Contact an Experienced Investment Fraud Lawyer if You're Concerned
If you believe that you may have been the victim of a real estate Ponzi scheme then it is important to contact an experienced investment fraud attorney. The investment fraud lawyers of Meyer Wilson have successfully represented more than 800 investors in stockbroker mediation, arbitration and litigation claims.