“Land is the only thing in the world that amounts to anything, for ’tis the only thing in this world that lasts. … ’Tis the only thing worth working for, worth fighting for, worth dying for,” says Gerald O’Hara to daughter Scarlett in Gone with the Wind.

Wise words. Real estate was on an upward surge for decades. It seemed unstoppable. Then, along came the disastrous collapse of the housing bubble in 2007. Six years later, we’re seeing a good rebound in real estate prices, and that has many, perhaps you, wondering if land is once again, if not worth fighting and dying for, at least worth investing in.

The answer is a qualified yes. Real estate, in any economy, can play an important role in a diversified portfolio. Today, with most real estate prices still well below pre-2007 levels, and mortgage interest rates lower than they’ve been in decades, “It is probably a very good time to buy,” says Morningstar financial analyst Samuel Lee.

There are three major ways that people sink money into real estate. The first, the most obvious, is to purchase a home. The advantage to holding real estate in the form of your own house is, well, you get to live there. There are few other investments, outside of art and antiques, that you actually get to enjoy. The big disadvantage is that no investment is less liquid than your home. If you need cash in a jiffy, your house is not the ticket. Also, with real estate agent commissions and title searches and such, homes are not easy or cheap to buy and sell.

The second way to get into real estate is to buy a house and rent it out. The advantage to being a landlord is that you can generate a steady cash flow with rent. If you can afford the down payment, and can deal with the hassles of being a landlord (fixing broken windows and unclogging toilets, not to mention dealing with the personalities of your tenants), you should be able to earn a healthy 8 percent or so on your money, says Lee, “Not bad at all by today’s low interest standards.”

The third option, and the easiest, is to invest in real estate securities, such as real estate investment trusts, commonly known as REITs. Traded like stocks, REITs typically represent ownership in commercial properties, usually office buildings, condos, or malls. REITs can be lucrative, but they are risky. The 30-year average annual return is about 12 percent, but there have been both very good and very bad years.

Norman Miller, Ph.D., professor at the Burnham-Moores Center for Real Estate at the University of San Diego, says that now might be a good time to invest in either REITs or stocks in the housing-construction industry. Of these two investment choices, “REITs are more a buy-and-hold investment, for those who want long-term exposure to real estate without the headaches of being a landlord,” says Miller. “Housing stocks, subject to even more risk, as well as potential, are appropriate for only the most aggressive investors.”

Morningstar’s Lee, editor of the ETFInvestor newsletter, agrees, suggesting a 5 percent allocation to REITs for most investors—best achieved by purchasing shares in a low-cost, indexed exchange-traded fund that invests not in one, but in many companies. One good choice would be the Vanguard REIT Index ETF (ticker VNQ).

If you want to go the more aggressive and volatile route, consider the iShares Dow Jones U.S. Home Construction fund (ITB).

Gerald and Scarlett O’Hara had but one option for investing in land. You have many.

Land Ho! The Saturday Evening Post

When Michael Clauer was deployed to Iraq in February 2008, his wife, May, became depressed and fell behind on dues totaling $977 to the Heritage Lakes Homeowners Association (HOA) where the couple lived. In an effort to collect unpaid dues, the HOA sent multiple notices by certified mail demanding they make the payment or face foreclosure on their home. After all of the HOA’s letters to the Clauers went unanswered, the association foreclosed on the Clauers’ home, and then sold it at auction for $3,201 to one Mark DiSanti. In May 2009, DiSanti sold the house to Jad Aboul-Jibin for $135,000.

In Texas, homeowners associations can foreclose on homes without a court order, therefore the Clauers were given no notice of the foreclosure proceedings.

The first inkling of the foreclosure and subsequent sale came in June 2009, when May received and opened a letter from the new owner requesting rent payment.

Still in Iraq, Captain Clauer found himself fighting two battles: one to protect his homeland and the other to protect his home.

The Clauers filed a lawsuit to get their home back, claiming they were protected from foreclosure by the Servicemembers Civil Relief Act (SCRA), which protects those on active duty from certain financial and legal obligations, including foreclosure, without a court proceeding.

The HOA argued that SCRA did not apply in this case because Captain Clauer had no ownership interest in the home, as it was owned by May Clauer and her parents.

The HOA made good faith efforts to contact the Clauers on numerous occasions to collect unpaid dues, to no avail; therefore, on behalf of and in fairness to neighbors who paid dues, the HOA claimed legal right and responsibility to seek remedy through foreclosure. On a conciliatory note, the HOA said they wanted the Clauers to get their home back, but no longer owned the home.

As for the current owner defendant, he claimed that he was an innocent purchaser in this matter and the rightful owner. Nevertheless, he said he would have given the property back to the Clauers, but only after he was reimbursed for the purchase price he paid.

The Decision:
The federal judge ordered the parties to figure it out for themselves. They settled out of court. While terms of the settlement are confidential, the Clauers did get their home back.

Battle on the Home Front The Saturday Evening Post

One week after Shirley and David Finch purchased a home in Parkersburg, West Virginia, they discovered defects in the basement—defects they hadn’t noticed before because the area was blocked from view by the previous owner’s workbench. The couple had hired InspecTech to complete an inspection and report prior to the purchase of the home, so they contacted them for an explanation. The company’s inspector reinspected the home and reported water damage, prior efforts to fix it, water infiltration, and structural issues with the foundation. InspecTech refused to pay for any costs incurred because the agreement they had with the Finches included unconditional release for damages.

The Finches sued the company for negligence and $39,000 to cover the cost of repairs.

InspecTech maintained the Finches had no right to collect, citing the contract which stated “The CLIENT (Finches) hereby releases and exempts the COMPANY and its agents and employees of and from all liability and responsibility for the cost of repairing or replacing an unreported defect or deficiency.” It argued the couple freely entered into the contract; the language about unconditional release was unambiguous; and the contract should be enforced citing precedence that “when an express agreement is freely and fairly made, between parties who are in an equal bargaining position, and there is no public interest with which the agreement interferes, it generally will be upheld.”

The Finches countered that unconditional release of liability was against public interest because Flanagan presented himself as a certified home inspector in West Virginia, yet failed to meet state standards. Contractual release would give them no recourse against negligence and provide disincentive for experts to adequately perform services. InspecTech said its contracts and services were based on business policy, not public policy, and maintained the right to enter into contracts with any other party, as they did with the Finches.

Decision:
The Circuit Court of Wood County found the Finches had contractually released InspecTech from all liability and responsibility for costs of repair and granted a summary judgment in favor of InspecTech. The Finches appealed.

The Supreme Court of Appeals of West Virginia reversed the decision, finding there was a public interest because home inspectors are governed by the State of West Virginia and required to comply with guidelines regulating the home inspection industry for the protection of the consumers. The Finches are entitled to receive the protections afforded by such regulations and should not be expected to relinquish such safeguards as a condition to receive home inspection services.

Water Log The Saturday Evening Post

By 1990 Skyline Woods was well established with 90 homes built around the country club, and Circo thought the time was right to sell the club to a golf course management company. Unfortunately, the golf pros ran into financial hazards. They ran out of “green,” and the only course of action was for Skyline Woods Country Club to file for bankruptcy in 2004. To pay off debt, the bankruptcy trustee auctioned off the property in 2005. A group of Skyline Woods homeowners tried to buy the club, but were outbid by Liberty Building Corporation, a development company owned by David Broekemeier.

Here’s where things got sticky. The federal bankruptcy court transferred property to Liberty, free and clear of all obligations. Shortly after, Broekemeier met with homeowners and club members to inform them he had no obligation to honor memberships, offering the option to play the course if they paid fees like anyone else.

If that was bad, what happened next was worse. In spring 2006, Broekemeier closed the club, posted “no trespassing” signs, and began cutting down trees to clear land where he planned to build a condominium complex and water park. Teed off homeowners sued Broekemeier in Nebraska State Court, requesting a restraining order to prevent further damage to the land. They claimed implied covenants as homeowners in the golf community guaranteed the only use of land was as a golf course.

They reasoned Broekemeier might own the golf course free and clear, but only free to use it as a golf course. Homeowners added that no matter how you slice it, Broekemeier was well aware of their covenants, as he had also built a golf community adjacent to Skyline Woods. And, like Circo, he marketed the course’s proximity and views to sell lots. And there were rumors that he was going to redirect the golf course toward his neighborhood, leaving Skyline Woods homeowners with views of condos and a water park.

In response, Broekemeier came out swinging with a motion to dismiss the case. His first argument was that the state court had no jurisdiction to interfere with the federal bankruptcy order. Second, even if the State court did have skin in the game, the covenants were unenforceable because they were never recorded. Finally, he said Nebraska law protects bona fide purchasers from restrictive covenants when there is no notice.

District Court Decision—2008:

Round one was won by homeowners. A Nebraska court found that they did indeed have implied restrictive covenants; Broekemeier was aware of the covenants; and finally, the bankruptcy sale of the property did not discharge the covenants because they belonged to homeowners, not the golf course. The court ordered Broekemeier to either reopen the golf course or maintain it in a fashion that would not devalue the property of homeowners. Brokemeier chose the latter.

Round two: After six years of legal turf wars, the golf course never reopened, eventually becoming an eyesore due to lack of maintenance.

Aftermath—2012:

Game over. The land was sold. New owner is spending $7 million to build a premier golf course.

Looking For a Fair-Way The Saturday Evening Post

Illustration by Owen Freeman

As part of the master plan, Bonny Oaks was buffered from encroachment by undeveloped woods. Wildlife flourished accordingly. Raccoons. Chipmunks. Deer. Because the deer had no natural predators, they became more and more brazen over the years, tearing up hedgerows and nibbling azaleas in broad daylight. At night, they leapt like fools in front of cars. Residents were divided on the issue. One camp insisted that the deer were a nuisance, a hazard, an infestation to be exterminated like rats or fleas. A number of solutions were posed, including poisoned salt licks. Those turned out to be illegal, not to mention dangerous to pets and children, so this camp contented itself with deterrents like mail-order coyote urine sprinkled around their gardens. The second camp believed that the deer were part of the natural beauty that made Bonny Oaks such a desirable home in the first place, believed the deer should not only be tolerated but welcomed. To this end, several members of the community put out pans of oats in winter, when the woods alone failed to provide. Mr. LaPointe preferred to remain above the fray but before he died, before an embolism stopped his heart forever, he took real pleasure in directing his wife’s gaze toward twilight deer like statues on the lawn.

All things considered, then, it came as no great surprise when Mrs. LaPointe, two years a widow, stepped out to retrieve her newspaper one morning and spotted a dead doe in the middle of Shady Dell Lane. She assumed it had been hit by a car and she was prepared, at that hour, no witnesses in sight, to let somebody else worry about the carcass, when she noticed an arrow buried to the fletchings behind the doe’s right shoulder.

Mrs. LaPointe told her housekeeper, Sadie Petty, how she clapped both hands over her ears at the sight of the arrow, as if she’d overheard something filthy. On the phone with her best friend, Mrs. Penelope Ragland, she described the doe’s eyes—already iced over, she said, as if bored by its own death. And that afternoon, while undergoing her monthly color rinse, Mrs. LaPointe recounted for her stylist, Brenda Wimpel, the way the men from animal control hoisted the doe by its legs and swung it into the back of a truck—one, two, three, like a sack of mulch. She was amazed by the sudden potency of her metaphors. And the more she embroidered the details the more convinced she became that something significant had happened. She was still telling the story that evening to her son and only child, Blackmon, a substitute teacher with literary aspirations. He preferred the flexible schedule, he claimed, because it left him time to write. “The police were no help at all,” she said. “They stood around in my kitchen like, like—”

Her powers of comparison had abandoned her, a fact she attributed to the presence of her son. Blackmon had a knack for rendering her uncertain, for insinuating in her mind a whisper of self-doubt.

“You called the police?” They had finished supper—Sadie Petty’s shrimp and wild rice casserole—and retired to the wrought iron table on the patio. Drifting over from next door were muted, jolly voices, the scent of grill smoke, but none of the lots in Bonny Oaks were less than two acres, the tree lines deep enough to allow for privacy. Blackmon was drinking a Diet Coke and reading her newspaper. He decried the local paper as the work of half-wits and hillbillies, but he seemed pleased enough to take advantage of her subscription. He had been living with her since his divorce. He’d given up their condo in the settlement, despite the fact that it had been paid for by his father, ceded custody of his son despite Mrs. LaPointe’s offer to hire a lawyer so he could fight. The “Arts Section” was open between them, the evening light over Blackmon’s shoulder making a Chinese lantern of the page.
“Well of course I did,” said Mrs. LaPointe.

Blackmon flicked a corner of the paper down. “What about the paramedics? They might have tried CPR?” He coughed up a laugh, then snapped the paper back into place so that his face was hidden once again.

Mrs. LaPointe was about to tell him that he could at least pretend to care, when her neighbor, Herman Pickering, pushed through the screen of trees between their yards, wearing an apron and bearing a meat fork. His apron read Support Our Troops in red and white letters against a blue background. “I thought I heard you folks,” he said. Sweat ran in the folds and creases of his smile. He turned back to his house and shouted, “Douglas, come on over here a minute. Come say hello.”

A few seconds later his son appeared on the LaPointe’s side of the trees. Barefoot. Feet and ankles pale. He had a younger version of his father’s face, as big and square and handsome and uncomplicated as a coffee table book.

Herman said, “Did I tell you Douglas was home on leave?”

Bonny Oaks–May 2004 The Saturday Evening Post

Illustration by James Yang

But, as consumers finally learned to be wary of out-of-the-blue offers of untold riches, clever Nigerian letter scammers found ways to adapt. These days, instead of just masquerading as monarchs, some also pose as wealthy foreign businessmen on dating websites, asking cyber sweethearts for money for a plane ticket to meet them or help them out of a jam. Others claim to be bank lenders who “approved” two percent loans in a tough economy—after the requested application fee is paid. Still others have been known to pose as FBI director Robert Mueller or even Hillary Clinton, threatening arrest or offering political help to get a hidden inheritance (depending on the letter) unless upfront fees are paid to keep you out of jail or put you on Easy Street.

The very latest spin on all of the above scams has been to abandon email (too common, too much competing spam) in favor of the old-fashioned fax. As with email, faxes also can be sent en masse, with “predictive dialers” that call thousands of random phone numbers per day; if a fax tone is reached, the transmission goes through.

Sigh! Just goes to show you, some old scams never die. Instead (and often after well-publicized warnings), they just get tweaked. So be aware—and beware—of these creatively sinister newly rewritten rip-offs, hustles, and cons:

Telephone Scams

Misleading telephone offers date back almost to Edison. Here are the most common and their newest incarnations:

1. Fake Lotteries. The classic approach is to say “you have already won” a lottery that, in fact, you never entered. (One tip-off: they’ll ask you to pay advance fees­—never part of legitimate winnings—in order to claim your prize.) Or, they call to ask for donations for phony charities (often in the wake of recent disaster) or to promise government grants, low-cost medication, or a “free” vacation (any of which they claim requires your personal information and credit card).

The New Twist. Now fraudsters who work the phone try to get you to call them. For example, you receive a mailed letter for any of the reasons above, or stating there’s a UPS package that cannot be delivered, or that you’re entitled to cash from a special (secret) government program. You’ll call what seems like an American area code, but is actually the number for a Caribbean country. Dialing that number may cost as much as $5 or more per minute. So, the scam is actually two-pronged: As an operator tries to weasel your personal or financial information for identity theft, you’re simultaneously running up sky-high phone bills—thanks to a series of transfers, long holds, and lengthy small talk to keep you on the line as long as possible.

2. Distress Calls. Another classic phone scam is the call to targeted grandparents. Scammers pretend to be a grandchild in need of money after being arrested or hospitalized while vacationing abroad. They often try a generic greeting such as “Hi, Grandma, it’s me, your favorite grandson!” with hopes you will reply, “Billy? Is that you?”

The New Twist. Now, scammers are increasingly identifying themselves with the specific names of grandchildren—as in “Hi, Grandma, it’s Billy, and I need your help!” They get grandkids’ names from Internet searches on ancestry websites, Facebook accounts, online telephone directories, or reading recent obituaries of the target’s spouse.

3. Timeshare Resale Agents. Timeshares have a tendency to lose value. For years, distraught timeshare owners have been barraged with offers to help unload their unwanted units by self-described “resellers.” These sleazy profiteers promise they already have an interested buyer. All they need is their fee—upfront, please—to make the transaction occur. (Of course, the buyer is nothing more than a figment of the scammer’s imagination.)

The New Twist. Timeshare owners who’ve been swindled of upfront fees by phony resellers are now being re-contacted by so-called “fraud recovery” specialists. Guess what they’re being offered? Help with recouping that lost money—for another upfront fee, of course. Sometimes, it’s the same “resellers” now calling as “recovery” specialists, according to FBI reports. At best, pay a “recoverer” and you’ll get little more than forms or instructions to file complaints with investigating government watchdogs—all of which you can get for free at websites for the Federal Trade Commission or your state Attorney General. At worst, you get nothing but a smaller checking account.

Protect Yourself from Phone Scams. Hang up on any unsolicited phone call seeking personal or financial information. To avoid the phone bill trap, be cautious about calling back anyone with an area code you don’t immediately recognize. The most commonly used Caribbean area codes are 876, 809, or 284 (Jamaica, the Dominican Republic, and the British Virgin Islands). Also be wary of Canadian area codes, which are also three digits long.

Illustration by James Yang

Debit Card Scams

The invention of the ATM machine has not just made banking a greater convenience: It’s been a source of unlimited inspiration to the criminal mind. Top scams include:

1. ATM Skimming. Portable “skimming” devices—sold online for as little as $100—are placed over or behind the card slot to record information encoded in the magnetic strip of debit cards. With miniature spy cameras placed nearby to record PIN numbers used to make cash withdrawals, crooks are able to make duplicate cards and score fast cash from multiple machines. Without a PIN, they can make fraudulent online purchases.

The New Twist. Automated card machines at gas pumps have become an even more desirable target. Reason: With only a couple of manufacturers of gas pumps, a single key—in the hands of a scammer who gains employment at one gas station—can open pumps at multiple stations to install the sinister skimmers.

2. Fake “Out of Order” Signs. In bank vestibules with several ATMs, crooks place “Out of Service” signs on non-tampered ATMs in order to get customers to use a neighboring ATM on which they already placed a skimmer. Such was one recent case that resulted in $390,000 in skimmed withdrawals—until the Secret Service nabbed the culprits.

The New Twist. In a newer spin, no skimmer is even needed. Instead, crooks apply adhesive to certain buttons—“enter,” “cancel,” and “clear”—to prevent keypad-using consumers from completing their cash withdrawals after they’ve already inserted their card and typed PIN codes. As frustrated customers leave the machine to report the problem (tin foil is sometimes used to prevent cards from being returned), lie-in-wait crooks use a screwdriver to release the keys to complete the transaction—and get cash.

Protect Yourself from Debit Card Scams. Before using an ATM, wiggle the card slot—if it’s loose, avoid that machine. Also ensure a light emits from the card slot; if obscured, that’s a sign of tampering. Inspect keypads to ensure buttons aren’t stuck and always cover the keypad as you enter your PIN. At gas pumps and checkout counters, a credit card is safer—federal laws limit your liability against credit card fraud to no more than $50 (it varies with debit cards, depending on when the fraud is reported). When using a debit card to buy gas or anything else, it’s safer to choose the “credit” screen prompt instead of “debit” so you don’t have to enter your PIN. The purchase amount will still be deducted directly from your bank account, but it’s processed through a credit-card network—providing greater protection in the event of fraud.

Sneakiest New Scams The Saturday Evening Post