Local residents have been caught in a five-year debate over the activities of one man, a real-estate investor named Jason Buzi.
Hundreds of people have commented on the Weekly's online Town Square forum, claiming Buzi's tactic for buying homes in Palo Alto and surrounding cities is a scam.
There is not a firm consensus on what it is he does. Some claim he buys properties for below-market value and then sells them (through a clause in his contract with the seller) to another buyer for a profit.
Buzi denied it, saying his contracts simply provide room for a partner to help him pay for the houses he buys.
"I'm not wealthy enough to buy every property I make an offer on," he said. "So I add partners to the contract."
Those partners are sometimes added to his contracts after the fact, Buzi said, but that he works with the same people consistently. However, he was not comfortable giving out the names of his partners, saying they do not necessarily want to be associated with some of the bad press Buzi has received online.
"It's not like I go out and find random people," he said. "I've worked with these partners for six or seven years."
Backing out of a contract is rare for Buzi, who said the only times he has not been able to find a partner to invest with was while working in unfamiliar areas, like in Alameda across the bay.
"When I enter a contract, my intent is to close," he said. "There have been very few contracts that I have walked away from."
He also said the prices he pays sellers are fair.
"I don't lowball," he said. "That is exactly opposite of what I do. Most of the profit is coming from adding value not from low prices."
Buzi said he rehabs properties that have not been put on the market yet, meaning he buys homes that need some fixing up. After refurbishing, remodeling and sometimes rebuilding, Buzi and his partner will resell the home for profit.
This kind of real estate tactic is fairly common, Buzi said, but his marketing technique is what has garnered him a not-so-savory reputation in the area.
"There's a lot of investors but there are very few people who do the marketing that I do," he said.
Buzi floods local neighborhoods with fliers asking homeowners if they are looking to sell their homes to him. His perks: no real estate agent, no staging and no open houses. He also tells prospective buyers that they can remain in their homes for a time, presumably enough time for him to partner up with another investor.
"This is how I make my living," he said. "Actively looking for deals and trying to get one a month."
Originally working in the mortgage business, Buzi said he found working for someone else in such a volatile market difficult.
Buzi left the mortgage business in 2005 and started helping a friend flip houses.
By 2008, the poor economic climate got to Buzi's business.
"Things got tougher and I kind of took a break," he said.
As he saw the market getting better, Buzi decided to reenter the real-estate game in 2010, readapting to the new housing environment, he said.
"You have to be adaptable," he said, noting that he hadn't purchased a short-sale home, one that a bank had taken ownership of, until last year.
As far as allegations against Buzi for scamming sellers and even for having illegal practices, he said most of that is coming from people who either do not understand or who are threatened by his business.
"Real-estate agents obviously don't like me buying right from the seller," he said.
David Blockhus, a real-estate agent with Coldwell Banker, confirmed that what Buzi does is not illegal, but that is misleading.
"How he makes his money is by buying houses that have not been put on the market," he said. "We have a board of ethics that we have to follow, he doesn't have that."
Blockhus warned sellers that they will be getting less than market value for their homes when selling to buyers like Buzi.
"In today's market, if you put (your house) on the market, with full visibility, you are going to do substantially better," he said, noting that there are some cases in which people do not want to go through a real-estate agent, even if it means more money, because they will have to disclose information about their property or have open houses and other disruptions.
It has been speculated that the people selling to Buzi are not informed sellers and Blockhus agreed.
"I don't know for sure, but I think his target market are people who don't know what they are doing," he said.
Buzi said his partners and the people he has actually purchased from are not among those accusing him of bad business practices.
"The people I have done business with have nothing bad to say about me," he said. "I've gone to attorneys, I've made sure everything I do is totally legal."