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Ask Dave

Taking Advantage?

If Ryan takes advantage of buying repossessed cars or foreclosed homes, is he taking advantage of the people in those situations as well?

QUESTION: Ryan asks Dave about how he feels ethically about taking advantage of certain markets like repossessed cars and foreclosed homes created by circumstances that Dave teaches people to steer clear of. Isn’t that taking advantage of people who have hard luck? Not at all, explains Dave

ANSWER: I disagree. I don’t think there is any ethical dilemma at all. If you set out to harm someone in a transaction, and by doing the transaction you are directly harming them, then you shouldn’t do it. I never do a deal that’s not a win-win. But if someone pawned something and I can buy it later at a pawn shop and get a deal, there’s nothing wrong with that. As far as a foreclosed home, what’s worse for the person; to sell the house to you or to get foreclosed on? With the second choice, they’ve already been foreclosed on and you’d buy it from the bank. You’re not supporting or encouraging them to do stupid things.

If you loan someone money at 42% interest with the hope they’re not going to repay you so you can take their stuff, then you shouldn’t be doing that. That’s ethically wrong and your taking advantage of people. But if someone’s in a bad situation and you can help them by buying their stuff and keep them from getting in a worse situation, then that’s a blessing. You’re not taking advantage of their bad judgment; you’re assisting them in turning their lives around.

If someone else is standing there ready to offer them more money than I am, then I need to tell them about that better deal. I don’t think you’re supporting the bad cycle in that case. The bad cycle is always going to be out there.