Recent news about DJ Envy’s business partner being arrested for alleged wire fraud and running a real estate Ponzi scheme highlights the importance of due diligence in investments. The case, centered in Paterson, NJ, involves claims of 30-40% returns within a year, raising red flags for informed investors.
Key takeaways:
Be wary of “get rich quick” schemes
If it sounds too good to be true, it probably is
Average stock market returns are around 7% annually
Professional hard money lenders typically offer 8-12% APR for real estate projects
Consider safer alternatives like real estate crowdfunding platforms or REITs for passive real estate investing
Always research thoroughly and consider the logic behind investment opportunities. If someone offers unusually high returns, question how it makes sense for them financially. Remember, there are established, regulated ways to invest in real estate without taking on excessive risk.
