Biggest Investor Mistakes: iPonzi, Anyone?

By Ben Steverman - 2011-09-13T22:48:05Z

Photographer; Harald Sund/Getty Images

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Partnership Problems

It seemed like a chance to make money without investing any cash. A Colorado man with good credit would take out a $200,000 loan, and his partner would use the proceeds to build a house to sell in a booming area of Alaska. Soon, however, the Colorado borrower found himself contributing $120,000 in cash for extra construction costs. Then, when his partner wanted to live in the house rather than sell it immediately, the Coloradan realized he had little leverage to kick the partner out: While he held the $200,000 mortgage, his partner was the sole owner of the land and thus the house. With help from Kevin Sanderford, principal of Colorado West Investments, the client threatened legal action, enabling him to buy out his partner. Eventually, he sold the house at a $140,000 loss.