Owner Financing & Note Investing Podcast with Dawn Rickabaugh · Dawn Rickabaugh | Expert Advice for building wealth through Owner Financing & Note Investing

Widow Left with Seller Financing Nightmare: Fixing Fraud in Creative Finance

·56 min·4 clips

Widow discovers dead husband hid seller financing deals and destroyed all paperwork.

Dawn Rickabaugh, the Note Queen, shares a cautionary tale about predatory seller financing and the complex work of cleaning up a fraudulent portfolio. This episode details her intervention in a case involving her cleaning lady and later, the widow of the unscrupulous seller. Rickabaugh explains that 38% of U.S. properties hold over $32.8 trillion in equity, which she calls "the juice" for ethical creative finance. She begins by promoting her updated books on seller financing before recounting her recent return from a two-and-a-half-year sabbatical, which her note-based cash flow supported. Her cleaning lady approached her with concerns about the house she was buying from a family friend, revealing a contract-for-deed that was never recorded and left the family unprotected. Rickabaugh discovered the seller, an older man, was intentionally avoiding recording the agreement and tried to add an extra $7,000 to the payoff. She confronted him directly, threatening legal action for predatory behavior, and forced him to sign proper paperwork at a title company. She later learned from a friend that this seller had a pattern of entering such agreements expecting to reclaim properties and repeat the process. After the seller died, his widow on the East Coast inherited a messy portfolio of eight properties with little to no paperwork. Rickabaugh helped untangle one specific case involving a widow named "Alice," who was behind on payments and living with a chaotic household of non-family "sons." The original paperwork was missing, but payment history and verbal promises indicated an intent for ownership. Rickabaugh negotiated a new, affordable mortgage for Alice, putting her on title despite misgivings about her stability. True to prediction, Alice defaulted within six months, and the situation grew tense with implied threats from residents. The East Coast widow had to initiate foreclosure, which ultimately pressured Alice to sell the property, allowing her to walk away with $30,000 in equity. The seller's widow was paid in full, including all back interest and penalties, but endured a stressful foreclosure process. Rickabaugh reflects that a life estate lease for Alice would have been a cleaner solution, avoiding the foreclosure ordeal. The tone is conversational and narrative, blending a personal story with educational insights into note investing ethics. Listeners interested in the real-world pitfalls of seller financing and ethical deal structuring will find this episode gripping. Those seeking only technical "how-to" strategies without the human element might find the detailed story less applicable.

As heard by us

A difficult financing case that becomes a clear lesson in equity, title, escrow, and deal structure.

A widow and a messy financing setup drive the discussion. The host works through the deal as it unfolds, trying to protect the seller while leaving the buyer room to handle the payment.

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Why you'd press play

Press play if you want a real-world seller-financing deal straightened out around equity, title, and payment risk.

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