What about Ethics?

[VDon]

I always had the idea, that in order to be a good person/businessman, you need to lead by example, show inegrity and strong ethics and principles.

When I was still attending University, I had the chance to buy an apartment valued around €65k for like €40k, but did not pull the trigger because the seller clearly had no clue. It was a single mother in her late 30ies, working in a facility for mentally handicapped kids, who had just lost her husband and had to sell to pay the bills.

Of course someone else made the deal and a small fortune. Today (maybe 10 years later) this apartment would be worth around €250k.

This was - from a financial standpoint - probably the biggest mistake I ever made and I am still not sure if I did anything wrong. At what point do you think, ethics, morals or integrity need to/can be left aside?

 

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[HoneyBadger]

I always had the idea, that in order to be a good person/businessman, you need to lead by example, show inegrity and strong ethics and principles.

When I was still attending University, I had the chance to buy an apartment valued around €65k for like €40k, but did not pull the trigger because the seller clearly had no clue. It was a single mother in her late 30ies, working in a facility for mentally handicapped kids, who had just lost her husband and had to sell to pay the bills.

Of course someone else made the deal and a small fortune. Today (maybe 10 years later) this apartment would be worth around €250k.

This was - from a financial standpoint - probably the biggest mistake I ever made and I am still not sure if I did anything wrong. At what point do you think, ethics, morals or integrity need to/can be left aside?

How'd you know she didn't know what the going rate of the apartment was? Also just to add it is one thing about ethics if something is materially different than what someone believes it to be (i.e. you are pawn shop owner and someone comes in thinking they are selling a fake gold necklace but you know its real and pay them as if it is fake and not warn them) and another for the lady to know what she is selling but being ignorant of researching what she should sell it at.

 

[VDon]

How'd you know she didn't know what the going rate of the apartment was?

She lived in a medium-sized town (Graz) and assumed that real estate value was the same in Vienna. Which of course was a huge mistake. In addition the apartment was located in the most expensive part of the city.

 

[HoneyBadger]

She lived in a medium-sized town (Graz) and assumed that real estate value was the same in Vienna. Which of course was a huge mistake. In addition the apartment was located in the most expensive part of the city.

And to solve your personal scope of ethics you passed up the deal but didn't tell her what you believe to be a more correct price (to which she went on to sell it for a bad price according to you)? Am I getting this right?

 

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[Guest34764]

As long as everything is legal I'm good.

If you had known that apartment was going to be valued so high later would you have bought it?

 

[ravenspear]

And to solve your personal scope of ethics you passed up the deal but didn't tell her what you believe to be a more correct price (to which she went on to sell it for a bad price according to you)? Am I getting this right?

Yeah I mean, there was no sense in passing it up unless you were gonna do this instead.

 

[theag]

I would have bought it without a moment of hesitation.

 

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[Guest34764]

I would have bought it without a moment of hesitation.

We both agree there.

Money is money, and 40K is still a lot to help a single mother.

If you let emotions play in your investments, it might screw you over one day.

 

[mayana]

At what point do you think, ethics, morals or integrity need to/can be left aside?

I can see why you'd struggle with this. When I've been faced with situations like that, I follow this rule:

If I don't feel strongly enough about the low price/vulnerable seller to help them/encourage them to charge a higher price, I 'll take the deal.

(It's usually a friend or family member who I might help and not rip-off, mostly because the relationship is worth more to me than potential financial gain.)

Fortunately, or unfortunately (depending on which side of the the deal you are on), someone would come along and by my house at a fire sale price even if my husband had just died and I had just been diagnosed with a terminal disease and all of my kids were handicapped. In fact, I'd probably be a target for investors. Lol. It's just how things work, for better or worse.

 

[Napoolion]

I would had made the deal. €40k is still €40k, you were not trying to scheme it out for nothing.

If talking about ethics though, I try to be very ethical and hold high integrity. I have noticed that every time I am dishonest, it will bite me back. Also it is really easy to ruin your name in internet and everytime somebody Googles you, they will see your past sins.

However some people I know have very low ethics and they seem to be doing alright and no effects seen. I hold away from people who are dishonest, lying, manipulating. Trust is a fragile thing and I would never do any partnerships with those people.

So I guess, for me, the right answer is balanced version of not too a**hole, but not pushover or overly nice guy either and going for your goals. Then again I am quite young, maybe I will get meaner with time.

 

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[OldFaithful]

@VDon a simple method to determine the ethical thing to do might be to ask yourself: If I were in the other person's shoes (seller), what would I want the buyer to do?

Would you want a prospective buyer to give you the asking price so that you could get those bills off you back?
Would you want a buyer to let you know that the apartment actually has a higher value than the asking price?
Would you expect a buyer to offer more than your asking price?

It can help to take a minute and put ourselves in the other person's shoes.

 

[TheGrind]

You just described wholesaling real estate.

Nothing wrong with it, she needs money and you give it to her.

 

[Swam010]

Talking about ethics, am I the stupid one or is everyone else using a nickname for a reason?
Hardly anyone comes out in his own name on this forum?

 

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[Jon L]

You could look at any business that way. I sell custom programming services. I hire people in low-cost-of-living countries and charge my clients many times what I pay my developers. However, I've also spent considerable time developing a whole bunch of stuff (expertise, management, systems) that allows me to do this. Could my clients do the same thing I did and go straight to Pakistan? Sure. Will they? Nope. Why? Because their time is better spent doing what they do best.

I have a friend that wholesales houses. He's very up front with people. He tells them that he needs to buy houses at 40% off market value in order to make a profit, but can give them cash on the spot. (He needs this amount because of the risk and the work involved). If they're ok with that, then great. If not, he moves on. One deal, the guy wanted half of his profit. In that case, the owner was willing to do a bunch of the repair work himself, and was rewarded for it.

As long as you're up front with people, they make a decision based what their needs are. This lady you ran across may place more value on having 40K tomorrow vs 65K in 2-6 months (or however long it takes to close).

 

[The-J]

There's a reason why people sell so low, and it's usually due to personal or property distress.

Maybe the mother just got divorced. Maybe she owes a lot in back taxes. Maybe she's facing foreclosure.

Or maybe the property has a problem that makes the place unlivable that she can't afford to fix, so she has to sell the property.

They need the money fast and are willing to sell at a discount to get a quicksale.

The value of them being able to sell right now for 40k euros is more than waiting to sell for market price. That's why they sell low.

Maybe now that you understand this, you'll consider that this is not an ethical issue but a due diligence issue. If it smells too good to be true, look for the incentives.

It's very likely the woman was trying to screw someone over. This is why you do due diligence.

 

[Jon L]

Talking about ethics, am I the stupid one or is everyone else using a nickname for a reason?
Hardly anyone comes out in his own name on this forum?

we all post some fairly personal and business-sensitive stuff on here. I don't use my full name or my company name because I don't want clients googling and finding how I 'make my sausage.'

 

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[Swam010]

we all post some fairly personal and business-sensitive stuff on here. I don't use my full name or my company name because I don't want clients googling and finding how I 'make my sausage.'

Thank you so much! I just learned another valuable lesson!

 

[Swam010]

Thank you so much! I just learned another valuable lesson!

Can I change my username somehow? It seems I can't?

 

[VDon]

Well maybe I should have made the deal, if it had been some old wealthy Lady it would have been a no-brainer for me.

But a widow with a child to take care of... I am still undecided. Even if 40k might be a lot - 20k, 50% more, is a lot to lose.


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[VDon]

Other example: I have found a product and a target group, I am sure I could make carefree 50k a year off.

Let's say it would be like selling the rebel flag to some slavery proponents.

Take the money, or let it be?


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[theag]

Other example: I have found a product and a target group, I am sure I could make carefree 50k a year off.

Let's say it would be like selling the rebel flag to some slavery proponents.

Take the money, or let it be?


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[Raoul Duke]

Other example: I have found a product and a target group, I am sure I could make carefree 50k a year off.

Let's say it would be like selling the rebel flag to some slavery proponents.

Take the money, or let it be?


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Who comes on a forum to seek advice from complete strangers? Who does that?

“I went to a bookstore and asked the saleswoman, 'Where’s the self-help section?' She said if she told me, it would defeat the purpose.” Steven Wright

 

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[OldFaithful]

Who comes on a forum to seek advice from complete strangers? Who does that?

Someone who does not have a strong, internal, moral compass. Hence the question about ethics and what we might have done in the OP's original question.

It's not all that uncommon though, and it seems that ethics & morals tend to wax and wane in generational cycles. I'm not at all surprised. Perhaps the most helpful thing we could do at this point would be to encourage the OP to spend some time searching/thinking about the development of his own internal moral compass...

 

[VDon]

Someone who does not have a strong, internal, moral compass. Hence the question about ethics and what we might have done in the OP's original question.

It's not all that uncommon though, and it seems that ethics & morals tend to wax and wane in generational cycles. I'm not at all surprised. Perhaps the most helpful thing we could do at this point would be to encourage the OP to spend some time searching/thinking about the development of his own internal moral compass...

Maybe you got a point, I am not sure.

I might have a huge problem with pulling the trigger/taking action, when I should, but on the other hand this "If you don't screw this guy, someone else will do, so go get that money!" mentality does not fit well with me...

 

[Raoul Duke]

Someone who does not have a strong, internal, moral compass. Hence the question about ethics and what we might have done in the OP's original question.

It's not all that uncommon though, and it seems that ethics & morals tend to wax and wane in generational cycles. I'm not at all surprised. Perhaps the most helpful thing we could do at this point would be to encourage the OP to spend some time searching/thinking about the development of his own internal moral compass...

He has done that twice. Sit & think about it. While he is doing that, everyone else here is taking action. In 6 months he will bump this thread again. Only to tell us about this great "opportunity" he missed out again. Why you ask? Because he doesn't know if it would be ethical or not. We can't help him with these types of suggestions. I do see what you are getting at though.

@VDon

https://www.thefastlaneforum.com/co...tlane-how-low-will-you-sink-for-wealth.58553/

http://sethgodin.typepad.com/seths_...ethics-ripples-and-the-work-that-matters.html

https://sivers.org/book/HowWeDecide

http://www.iep.utm.edu/stoiceth/

 

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[Dwight Schrute]

"If you don't screw this guy, someone else will do, so go get that money!" mentality does not fit well with me...

Awesome. You're in the right place

This thread could be useful for you to become more resourceful: "The Astonishing Secrets"

 

[brickco]

I would never take that deal if I thought the seller truly didn't know it was worth more. And I would have told her what I thought it was worth, and I would have offered her less, but close to the "fair market" value if I really wanted the place. I would be more likely to get the discount, she would get more than she originally thought, and we'd all sleep good at night not worrying about how many people we screwed over to pay for our comfortable beds.

In this scenario, what would actually have happened is you would have offered her 40K, someone else would have offered her 40K, and someone else (more like myself) would have told her the truth and made a fair offer that included her staying on as a tenant so she wouldn't have to move. She would tell the two 40K offers to shove off and happily deal with the honest person who's looking for a win-win.

If you're chasing win-lose scenarios, you're not creating value. Creating value is win-win. I create something you value for more than it cost me to make and sell to you. You get more value than you paid. I get more money than it cost me to produce. Win-win.

 

[Ninjakid]

F*ck, I hate this rhetoric that you have to be a complete cunt to be good businessman.

She was selling it to you, she would have had €40k, and she ended up getting it from another buyer. You didn't try to coerce her or scam her, you would have bought it for exactly what she was asking.

It's good that you have a conscience about these things though.

 

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[The-J]

Other example: I have found a product and a target group, I am sure I could make carefree 50k a year off.

Let's say it would be like selling the rebel flag to some slavery proponents.

Take the money, or let it be?


Sent from my Swagphone with Tapatalk

I would do it. I'd love to make some cash off of ignorant racists. They can hate me for my color all they want while they stay poor and I collect easy checks off of em.

 

[RHL]

There are always more ways to make money. The feeling that you have to jump on a given shady idea or lose it all is a slow-lane scarcity mindset. It's a mindset that will bone you on deals too, because you're going to have that same frantic mentality when you see a deal that might be good but probably isn't because you fear that it will "get away" and you won't get another chance to make that kind of money. Ridiculous.

You can always make more money, but a lot of evil things can never be undone or fixed. That makes the choice obvious to me.

However, I don't know if buying a house at a low price is "immoral," really. I'd just have checked to make sure she knew she could more if she rode it oht, and that she really didn't want to. If she was bound and determined to sell at that price, do it.