The real estate blog.

Two years ago real estate investing in “hot” markets like Phoenix, Las Vegas and San Diego was the thing to do to make a load of money without much work. These “investors” were simply buying new houses with easy money and turning a profit when the home was completed. It was turnkey and anyone could do it.

Then the market shifted and things began to unravel. Casey Serin so mis-timed, mis-invested and mistook the market, he ended up holding eight houses in four different states. Foreclosure took most of those properties.

Critics claim Casey was stupid, but guys like Jeff from the SDCIA knew what they were doing and were successful. Then a few problems turned up on some Florida properties he owned and the market changed and now he’s facing foreclosure as well.

The

face of the specuvestors, those that were successful, had to be Zareh Tahmassebian. He was a 22 year old high rolling Las Vegas real estate investor who had so many houses, he didn’t know where they all were. He was buying up property in Las Vegas and Phoenix left and right in 2005. When the market turned, he kept buying. This time it was New Mexico. He even moved to Phoenix and got a commercial real estate license to catch the next wave of real estate early. He was impressive and I was envious. Today it’s been reported that even poster boy wunderkind real estate investor Zareh Tahmassebian is facing foreclosure. What? He’s supposed to be successful. He was worth millions! Well, dear readers, he is now in a bunch of trouble. The foreclosures aren’t even the tip of the iceberg. Read on to find out more, because I am going to share with you something few people know.

I’ve been investing in real estate for some time now. The original Fortune article Zareh was featured in really struck me. I couldn’t believe how easy it was to make money in real estate, but I knew new houses were a problem. They’re very fickle and I personally don’t really trust new homes. There are too many things that can go wrong. I’ve never bought a new home from a builder. This guy impressed me nonetheless. As the market changed, I was curious about Zareh and wrote a post about where he was today. Even though the real estate market turned Zareh seemed to be holding out well. He was still doing well and I wrote an article documenting where he was today.

Then I got the “call.” It started out innocently enough. The caller had found my article and was curious if I had spoken to Zareh. I explained the article was a compilation of other sources and some of my research into his Nevada mortgage license and Arizona commercial real estate license. After my explanation, the caller revealed the true nature of their call. They were trying to track this guy down. He had stiffed them on a real estate transaction I’ll get to in a minute. They had already found foreclosures in the Las Vegas area and Zareh had sold all his Nevada properties by the end of 2006! After Zareh Tahmassebian had maxed out his debt to income ratios on loans, he sought investors to keep his house buying going. The Fortune article said,

Tahmassebian bought his eight Phoenix houses with 10% down, a total investment of $150,000 including closing costs. To buy seven more houses, he entered into a limited partnership with his best friend’s dad, who lost money in the tech crash and is looking to make it back in the housing market. Each contributed half the down payments.

After maxing out the opportunity with his friend’s dad, Zareh found other investors through the mortgage company he worked for. The investor that called me explained they had gone into a house together in Arizona. After investing a mid-five figure sum with Zareh, a home was purchased and rented out. According to the investor, Arizona public records show the home was sold in January, 2007. The last time the investor spoke to Zareh, was February 2007 and he assured them everything was ok. To this day they have not received their original investment or any profits.

The investor was just trying to get their initial investment back, but as soon as I heard about the foreclosures, I knew this was going to be an unlikely scenario. The investor asked that I hold off on writing anything as they were still hoping to find Zareh and “talk some sense into him.” I obliged, but did contact the original author, Grainger David, in hopes that he might be able to do a follow up story and possible locate Zareh.

After a brief introduction, I wrote the following:

The reason I’m writing you is yesterday I received a call from one of Zareh’s investors. It turns out they have not been able to reach him, his phone has been disconnected and he sold the house they invested with him in without paying them back. They did some research in Las Vegas where he owned houses and found they had all been sold or foreclosed on. I thought you might be interested in this information for a follow up. I don’t have the resources to track this guy down, but figured you would.

This investor is just looking to get their money back, but I suspect they are not the only ones who has been left holding the bag. They don’t want to make a big deal about it and just want to find him. If you’re interested, I have their contact information. You can call me or email me back to discuss.

Though I didn’t hear back from the reporter, I did stay in touch with the investor. They said they were close to finding Zareh and for me to hold off on writing anything. I respected their wishes, but after the article today again stated my intention to publish. The investor agreed and provided the following additional information:

Thanks so much for the latest information. Yes, I had a friend of mine check on his latest whereabouts and it looks as though he’s hiding out in Rio Rancho, NM. Due to the new FCC regulations, phone numbers were an impossibility to obtain. We filed a complaint against his AZ RE license and apparently, someone else had beat us to the punch. AZ DRE informed me that as of May 21, 2007, he is not eligible to re-apply and will be denied if he tries. He has not made any attempt to contact us since February of this year.

Holy crap! Rio Rancho is where Casey Serin invested and had a home foreclosed on! I also checked on the license and it shows inactive with two complaints. Clearly, this is not the only investor burned by Zareh Tahmassebian. With investigations by real estate boards, burned investors, foreclosed homes, this poster boy of real estate investing success is quite surely heading for a heap of problems. Law enforcement likes to take out big fish, especially those within the real estate industry. Zareh Tahmassebian, I’m afraid you have got the biggest bulls eye pointed in your direction right now. And I am no longer jealous of your “success.”