You’ve probably seen the signs – usually stapled to telephone poles – that say things like, “we buy houses,” “Emma buys houses,” or “cash for your house.” They often look handwritten, and feature dollar signs and a phone number.
They’re called bandit signs and they aren’t unique to Los Angeles. But they are all over the city, sometimes even three or four are tacked to the same utility pole.
I started calling the numbers earlier this year hoping to find out who puts them up and who calls the numbers. After many unreturned messages and declined interview requests, I eventually found someone willing to share the details of his business.
Cesar Espino is 38 years old and originally from Mexico City. He’s lived in Los Angeles for about 20 years, and said he got his start in the real estate business more than a decade ago, investing in rental properties.
“It’s definitely a very lucrative market,” he said, explaining what attracted him to the business.
About two years ago, Espino started his current company, C2 Real Estate Investments. With C2, he’s essentially a bargain basement shopper in the real estate world. He looks for the cheapest houses he can get, which often means homes in bad shape, or owned by people in desperate straits; desperate enough to call a number on a sign.
“I look at people that are stressed,” he said. “They’re going through a divorce, or relocating. Maybe they’re downsizing. And so at that point they want to talk to me, right?”
It’s not clear how much business Espino actually gets from his bandit signs. He said he also generates leads from networking with real estate agents, scouring property listings and simply driving around, knocking on doors of dilapidated-looking homes.
But when he does buy property, he does it all cash, taking out what’s called a hard money loan. Hard money lenders are not banks. They’re private companies, sometimes even individuals, who provide funding to investors and flippers. These loans come with high interest rates and are usually designed to be paid back fast.
To make good on his loans, Espino said he sometimes turns around and immediately sells the property to another investor (a practice known as wholesaling) for a small profit. Other times, he flips the house.
To be sure, there are all kinds of operators behind the real estate bandit signs plastered around L.A. and Espino is just one example. But if you want to sell your house, real estate watchdogs warn against calling anyone in his line of work.
“You should be very wary of these folks who are posting the signs,”
said California Real Estate Commissioner Wayne Bell. Bell heads the Bureau of Real Estate, which oversees licensing and regulation for the state’s real estate sales, agents and brokers.
“My advice would be to seek out a professional, licensed real estate person,” he said, “because they have what’s known as a fiduciary duty to the people they represent. They have to put the interest of the seller first. The investors put their own interests first.”
The world Espino operates in is unregulated, so if you do a deal and things go wrong, you don’t have much recourse. Bell said this world is rampant with scams – for example, investors who try to get people to sign away the deeds to their homes without ever paying a dime.
Espino acknowledged that there are plenty of scams in his corner of the industry, but said his own business is straightforward. He admitted that he tries to get himself the best deal when he looks at a potential purchase.
“If you’re not going through a hardship type of situation then yeah, please go and see an agent,” he said. “If you’re not too worried about…paying 3 or 4 percent to get some expert advice, by all means go ahead and do it. But if you’re going through a hardship and you really want to get out fast, I am your guy.”