Real Estate Speculation: From A Trailer Park To Foreclosure On 4 Homes

The Minneapolis Star-Tribune has a fascinating article about real estate speculation in Minnesota. The article focuses on Bradley and Sarah Collin, a couple with three children who were living in a trailer park when they were suckered by a local “property management company” that (illegally) paid the couple $20,000 cash to buy 4 houses in a new subdivision.

From the Star-Tribune:

The couple and their three children, ages 2, 3 and 5, were living in a crowded trailer park in Blaine, when Bradley saw a newspaper advertisement touting real estate as the next quick way to make money.

“I didn’t want to paint the rest of my life, and the trailer park scene was about as bad as parts of north Minneapolis,” Bradley said.

Over a steak dinner at a Perkins restaurant, the couple met with two salesmen from Executive Premier Management Inc., a firm in Wayzata that described itself as a “property management company.”

With no money down, they could buy properties in a fast-growing new subdivision in Otsego known as Otsego Preserve, near Interstate 94 and the Albertville outlet mall. They would get $5,000 in upfront cash for each house they purchased.

The Collins were also told that home values in Wright County were appreciating at 8 percent a year, much faster than the national average. At that rate, the Collins could make $24,000 a year for every $300,0000 house they bought in the county. They were told that rental income would cover their mortgage payments until the houses were sold.

Collin said the management company helped him apply for four mortgages within days of each other. The firm used a different lender each time, a way to hide from the banks the debt he was taking on and wouldn’t be able to afford on his net income as a contractor, which averages about $60,000 a year. The “no documentation” and “no down payment” loans carried a much higher interest rate than conventional mortgages.

The couple purchased four houses — each for about $300,000 — hoping to quadruple their profits. The Collins received a $5,000 check after each closing. The cash payments were not disclosed on the mortgage statements sent to the bank, which Collin says he has since learned is illegal.

Executive Premier Management is not registered with the state, and the telephone number given to Collin no longer works. The two salespeople, Nathan Nordvik and Jonathan Matheson, do not have listed telephone numbers and could not be reached for comment.

The Collins hoped to rent the houses for a few years while the properties appreciated and then sell them in order to raise enough money for a down payment on a house of their own. Unfortunately, the rents didn’t cover the mortgage payments on the houses and when the bubble burst in Minnesota, the Collins learned that the subdivision that they had been told was appreciating at 8% a year was actually filled with other investors who cut and run when property values tanked. Now Collins gets 175 calls a day from creditors and his foreclosed houses are now listed at $160,000-$170,000. He feels guilty for being part of the mortgage meltdown: “All these mortgage companies are going down because of people like me who don’t pay their mortgages,” he said. “I’m partly responsible for that.”

Housing Bets Gone Bad [Star-Tribune] (Thanks, Rob!)
(Photo:Glen Stubbe, Star Tribune )


Edit Your Comment

  1. covaro says:

    If it looks to good to be true….

  2. mercnet says:

    Wow anyone that promises quick income should set a red flag off. He had better odds going to a casino to make money.

  3. Shappie says:

    How could anyone think this would be a good idea?

  4. Pylon83 says:

    At least he takes some responsibility for it.

  5. GotanOrange says:

    The guy’s a contractor & makes around 60k a year, so there’s some level of education that he’s attained. Seriously, wtf was he thinking?

  6. unklegwar says:

    Serious lack of financial thinking on this guy’s part. People see money and they get really really dumb (which is bad if you start out dumb).

    BTW $60K a year for painting ain’t bad. They were in a trailer? They must be REALLY bad at managing money!

  7. unklegwar says:

    @Pylon83: Lip service isn’t “taking responsibility”. What’s he DOING? Besides saying “My bad”?

  8. SuffolkHouse says:


    What a bullsh@t comment to make. You don’t go trolling through trailer parks with dollars looking for the people who know the ins and outs of business. Nope. You go there to exploit people.

    There isn’t a comment in here yet about the people who exploited this guy. Was he stupid? Yes. Should we have expected him to know real estate law? Not at all. Where were the folks looking out for this guy. Not there. That costs money – taxes. People don’t like paying taxes, even in times of war. They’d rather borrow from the Chinese and let guys like this fend for themselves.

  9. thirdbase says:

    The guy took a shot at improving his life by investing in real estate. It didn’t work out. At least he tried. Stop feeling guilty. It was a business decision. If it would have worked out you would have been a hero to your family. Now pick up the pieces and get on with life. Don’t let this stop you from taking another shot at improving your lifestyle. Not all business decisions pan out. But you have to keep your head up and keep trying.

  10. AD8BC says:


  11. chiieddy says:

    @unklegwar: Someone who owns a painting business can make a lot more than $60k a year. My husband’s uncle is one of those. Makes really good money. Commercial work pays very well.

  12. RandoX says:

    Someone help me out. What did Executive Premier Management Inc. get out of it? Was it their houses that were being sold?

  13. JiminyChristmas says:

    I think the real responsibility lies with “Executive Premier Management,” who enticed this housepainter to unknowingly sign $1.2million worth of fraudulent mortgage applications. They were quite clearly running a scam. Responsibility also lies with the banks and mortgage brokers who wrote $1.2million worth of no documentation, no down payment loans, on houses overvalued by 30%-50%. The least amount of responsibility lies with this guy in the story who, more than anything, is the patsy left holding the bag.

    If you ask me, the buck stops with the banks. They are the one link in this whole chain that all along had the means and sophistication to keep the whole process clean. Not to mention, they had the obligation to not piss away their depositors’ money on transactions where they did close to zero due diligence. Of course, we all know now that the banks were up to: they sold the loans to Wall Street, effectively washing their hands of these bad loans before the ink was even dry.

  14. FreeMarketGravy says:

    @unklegwar: Well, to be fair, what CAN he do? It was his fault for getting himself into this kind of hole, but now what can he really do from where he is?

  15. deedrit says:

    HOLY SH*T!

  16. seanblood says:

    wtf is he doing in a trailer park on 60k a year? that does not make any sense to me.

  17. Nytmare says:

    @unklegwar: What can he do besides go into bankruptcy?

    I wonder why these two anonymous salesmen were peddling houses, and why so many houses from the same development were speculative investments. Sounds like the builder was complicit, paying scammy salesmen to offload the houses by whatever means. So if this speculator guy needs to track down the salesmen, maybe he could be successful via the builder. Of course he might have trouble securing a lawyer considering his financial trouble.

  18. akalish says:

    @GotanOrange: Actually, you can make six figures as a contractor with no little to education. Construction/contracting are areas where experience is far more important than education.

    The fact that he makes $60K/annum and lives in a trailer park speaks to his lack of budgeting abilities and lack of finance skills. The poor guy was perfect prey for scammers.

  19. KyleOrton says:

    @RandoX: False comps for the neighborhood. Think of this article if you’re ever looking at houses and the Realtor points to fast-selling houses with sky-high prices.

    I’m not saying this happens in all situations. Sometimes the builder’s relatives purchase units at the list price.

  20. @JiminyChristmas:
    In the grand scheme of things, the blame lies squarely on the banks, they gave out high risk loans because they knew they could pawn them off on hedge fund investors with zero risk.

    In this case however, the blame lies with the “Executive Premier Management” (does that name even mean anything?) and the guy who bought the houses. Banks can’t be aware you’re taking out four separate loans at the same time and this guy didn’t disclose a lot of stuff to the money lenders.

    And alas, I blame the guy who bought the houses. Taking on 1.2 million in debt should at least warrant some research and probably legal counsel. I mean if he got scammed out of a couple thousand I’d feel really sorry for him, but sinking that much money into a shady investment deal is inexcusable.

  21. PunditGuy says:

    First red flag: steak dinner at Perkins.

  22. opfreak says:


    The blame lies with the guy who said he’d buy the 4 houses @ 300k each.

    the end.

  23. Jerry Vandesic says:

    Here’s another article about this group of “businesspeople” who seem to have set up a bunch of interelated companies in MN: []

  24. FrankTheTank says:

    @thirdbase: THIS IS NOT INVESTING.

    Buying houses you can’t afford on the speculation that they will increase in value so that they cover your costs is not an investment, it’s a gamble.

    If I agree not to call these people “greedy”, can you not call what middle-income real estate speculators do “investing”? (it’s obviously different when people are putting millions into real-estate, Donald Trump-style)

  25. ThunderRoad says:

    Who cares who’s fault it is really. It’s all a major mess with no end in sight.

    but hey, if you want a $300k house for $160k, and can stomach the cold, you are golden!

  26. Juggernaut says:

    He’s just as guilty as the scumbags that led him by the nose… he bought four houses with no money down (and even got paid for doing it) and it didn’t raise a question in his mind?

  27. MeOhMy says:


    Buying houses you can’t afford on the speculation that they will increase in value so that they cover your costs is not an investment, it’s a gamble.

    I agree. However by this same token “investment” and “speculation” are two sides of the same exact coin. What’s the difference between the two? My stock portfolio is full of “investments” but let’s not BS ourselves – I’m only in it because I’m gambling that I can sell most of them at a profit in 30 years.

  28. JiminyChristmas says:

    @FrankTheTank:Buying houses you can’t afford on the speculation that they will increase in value so that they cover your costs is not an investment, it’s a gamble.

    Shit, you had better tell someone on Wall Street. ‘Leverage’ is the name of the game: borrowing 10x to 20x your own investment…in the hope that whatever you’re investing in goes in the right direction.

  29. @JiminyChristmas: @Troy F.: Thats the fundemental change in the housing market in the last decade or two. People stopped buying a home as a place to live, with the hope it would increase in value, to buying a home purely as an investment vehicle.

  30. @FrankTheTank: I agree that speculation does not equal investing.

    However, I don’t think RE Investing is for the uber-rich only. Anyone of any income can do it, if they do it right and bank on the numbers today, not the numbers tomorrow.

    I’m RTFA, and it keeps repeating the phrase “they were told”. Obviously, this guy COMPLETELY relied on the “experts” at this property management company to steer him in the right direction. He didn’t do his due diligence and he got screwed. Which sucks major ass.

  31. Blueskylaw says:

    This is just sad.

  32. katylostherart says:

    now this guy i feel bad for, but really, check the deal. too good to be true.

  33. Trai_Dep says:

    @opfreak: yeah, because these people have spent their career in the finance/banking/real estate industries.
    Banks. And Wall Street for breaking the tie between a bank making a bad loan then suffering the consequences for it.

  34. jfischer says:

    He was a victim of fraud, nothing less.

    Yes, he was dumb to get conned so badly, but the bottom line here was that he was tricked into lending his identity to people who took the big bucks in the form of “broker” fees, likely on both the loan and the sale of the properties, and left him holding the bag.

  35. Mr. Gunn says:

    I remember a Fatwallet thread from a guy who was offered a “deal” like this from someone he knows. Pretty much everyone advised him that he was being scammed, but he continued on about how he trusted his friend and didn’t think his friend would do that to him and tried to rationalize his way to thinking the easy $20000 was real. I think he finally came around, but can’t find the thread anymore.
    Everybody loves a blame party, don’t they?

  36. ideagirl says:

    @SuffolkHouse: Excellent comment, thanks

  37. GearheadGeek says:

    @seanblood: @unklegwar: Actually, at $60k/year with 3 kids in a market where suburban crackerboxes are $300k, they might have been managing their money pretty well by NOT buying a house. It seems like money management went out the window when they started with mortgages, not when they were crowded into the trailer.

  38. heavylee-again says:

    I could easily see how a guy who’s making $60k as a contractor is living in a trailer park. His wife may not work because she may be watching their 3 kids, some of whom are still too young for school. Stretching $60K to five people changes things.

  39. chrisjames says:

    @SuffolkHouse: “Should we have expected him to know real estate law?” For a $1.2M real estate investment: YES!

  40. MissTic says:

    So Everyday Joe struggling to make ends meet is fueled by the desire to cut corners on wealth building, ignores basic math and is now whining about it?

  41. Concerned_Citizen says:

    He makes 60K a year and lived in a trailer. How did he not save the money to buy his own house?

  42. MrGrimes says:

    At least get your feet wet and buy one first lol. Who in their right mind wakes up one day and decides they are going to be a real estate entrepreneur…then buys half a street for $1.2 million? The red flag should have been that he needed to use seperate mortgage companies.

  43. bunch.of.wackos says:

    is very easy to say the guy was dumb, he should know better, and
    that he had a level of understanding, when someone sits with you and
    says you have a shot at getting out of where ever you are and with
    little to no investment everyone is interested.
    I agree with @JiminyChristmas:
    the banks are at fault, they lend themselves to the meltdown trying to
    sqeese a buck out of people trying to forge a future. too bad the
    bankers will hold their money while their employees are laid off, one
    can only hope for disgruntled employees delivering some justice
    ohh greed … my least favotite sin…

  44. SuffolkHouse says:


    No. You expect the guy lending the money to know how risky the recipient is. That’s why borrowers aren’t put in charge of the bank’s money – moron.

  45. ludwigk says:

    @Concerned_Citizen: My GF and I have a combined income well over $60k/yr, and we are nowhere near being able to afford a house. Of course, we live in the SF/bay area with some of the most expensive real estate in the country. Doh!

  46. JiminyChristmas says:

    @Mr. Gunn: As I see it, that’s the whole problem with the residential real estate business: you can’t trust anyone. No one in the whole transaction has an ironclad fiduciary duty to the buyer.

    Mortgage brokers have to be the worst: The whole concept is they shop the market so you get the most for your money. Yet they have no legal duty to put the best deal they find in front of you. What they’re really after is to get you into the most expensive loan they can convince you to sign.

    Realtors have a more stringent professional standard, but the bottom line is they are still sales people. Even though they have some obligation to represent your interests there’s still that commission: which affects which houses they show you, when they show them to you, which offers they advise you to accept, and which ones to reject. There’s a potential for conflict of interest in each one of those areas.

    Ergo, put an unsophisticated buyer into one of these situations and it’s no wonder bad things happen. Every last person they talk to: broker, bank, realtor, builder, is potentially leading them in the wrong direction.

    *requisite disclaimer: Yes, there are many ethical brokers and realtors working in the residential real estate industry.

  47. Crrusherr says:

    if he was making 60,000 a year y was he living in a trailer park?

  48. JiminyChristmas says:

    @ludwigk: Hey don’t feel bad. I had some friends who lived in SF for several years: a lawyer and a tenured university professor. They earned well over double what you and your GF do…and they didn’t think they could afford a house either.

    They live in Anchorage, AK now.

  49. Nakko says:


  50. mac-phisto says:

    @JiminyChristmas: i came in here to make this very point. what i don’t understand is, at what time did we start trusting them again? i remember my parents being very skeptical & cautious when dealing with brokers throughout the eighties & nineties – even the “friends”. they would always be cordial, but in my dad’s eyes, they were no different than car or furniture or shoe salesmen & that’s not far from the truth. it’s not their job to give you invoice price – it’s their job to get you out the door with the mattress above that floor. when did we become so naive to think that they were working for us again?

    one thing i want to mention though – i also remember my father brewing over mortgage papers like he was studying for the bar exam for WEEKS before he even put pen to paper. can anyone honestly say they have this ability anymore? i received papers before i signed, but when i showed up at closing, the papers in front of me were quite different from what i had a look at before. & from speaking to others, it seems RARE anymore to have access to those 6″ of paperwork before a closing – sometimes even on refi.

  51. D.B. Cooper-Nichol says:

    For everyone that’s blaming the banks – while that’s appropriate much of the time lately, note that in this case, the banks were also scammed.

    Multiple applications, with different lenders, in a very short time period – that’s so each lender sees only a $60k earner, with no debt(?), buying a $300k house. Perhaps not unusual. There was no greedy bank loaning out $1.2M.

    I think it’s also fair to point out that the Bradley Collin was complicit in the fraud by signing multiple loan applications. I’m sure he was told “this is how it works,” but I also tend to think that anyone can smell when they’re involved in something shady. What’s the old W.C. Fields line – you can’t cheat an honest man?

  52. D.B. Cooper-Nichol says:

    My post should not be interpreted as letting mortgage lenders off the hook, in any way, for the mess they’re in, generally.

  53. westonalan says:

    the Star Tribune’s my home paper, they did a good job. Its pretty bad outside of the metro area. I live downtown, bike to work, live in 300 sq ft trying to pay off school, blablabla. It sucks how the median house price increased over 67% over the same time that median wages only increased 16%. A similar thing happened in france in the 1300’s, mainly caused by the central banks pumping more money into the system, then house prices dropped 50%, which is what we’ll be seeing a lot more of soon, which isn’t bad for me, because i can’t afford a house.

  54. ShadowFalls says:

    $60k a year and you are living in a trailer park? what? Something doesn’t seem right there…

    You must be really bad at managing money to have issues with that much income… Many working couples don’t even make that much.

  55. Kajj says:

    Right, but, as has been discussed extensively already, they have three kids, at least two of whom are too young for school, and we don’t know what other expenses they might have. Maybe he or his wife are paying off student loans, or they have medical bills. Living below your apparent means isn’t always a sign of financial ignorance.