Are Natural Disasters for Real Estate Investors?
Every Age of Mankind is faced with problems of survival. In the Mercantile Society each movement in time creates new challenges to the participates. Indications of major changes in capital usage are the first signs of economic shifts. To day I wish to examine such a function that has occurred in The Here and Now. I do not wish to point the finger of rebuke at any governmental policy, you dear readers, Real Estate Investors, may draw your own conclusions. We will merely examine a situation in which some interesting investments can be made with rather large returns.
OK, that is the Academic stuffy person approach, it replaces sleeping pills very non effective when you are standing in front of a class of graduate students who are hung over and not interested in the subject matter, they just want to cut to the grade to be awarded. You are a little ahead of them. You want to cut to the real point. How do we make money?
On January 17, 1994, the ground shook in and around the Northern Part of Los Angeles California. An Earthquake, the Media reported an 8.2 but the true measurements were about 6.8 to 7.2 depending on what MLS you belonged. A lot of properties were damaged and a few people killed and hurt.
The population responded at once and called for Federal Assistance, dear old Uncle Sam. We seem to think he is our Father instead of our Uncle. The Government responded and FEEMA came to the rescue. Money, money for repairs. Loans were made quickly based on a Contractors Estimate and of course the property owners and the contractors got together and produced some interesting high ball bids. A $100,000 house ended up with a loan of $250,000 when the actual repair work was $30,000. The difference was in some cases split between the Contractor and the Property Owner. A few morally challenged types of course bought up the properties and then applied for the FEEMA loans thus creating an immediate profit some of rather large dimensions.
Now let us examine the present investment situation created by the above series of actions. Time: Monday morning October 6, 2003.
AN EXAMPLE
A 34 Unit Multi Dwelling built in 1964 by Gypsies. In North Hollywood on a major street. Still standing and in good repair. It was purchased by the present owners in 1989 for the sum of: $433,500. It now has a FEEMA loan on it placed in 9/22/94, amount, $1,252,900. It is in the FEEMA non performing portfolio. It has been asigned to Beal Bank in the wilds of Plano Texas. Seems some politically correct type persons purchased something like $200,000,000 to $400,000,000 of non performing loans. My understand is that they paid or pledged the sum of 16% to 18% of face value. This bank then put the property into foreclosure which started on or about 8/07/2003. It is Tax delinq to the tune of $21,654, and oh yes guess what there is a second on it in the amount of $100,000 held by a local broker. This loan recorded on about 7/29/98.
Other then joining the Republican Party, sending your son to Yale with instructions not to get over a C in any subject or joining Skull and Bones and learning all the words to We are poor little lambs, I suggest an offer to the Bank of Beal to buy their note and continue on with the foreclosure after substituting Trustee. I also suggest the offer to buy should be in or around the sum of 20% of the face of the note.
This is about $250,000. Yes I would go higher. True value of the property about $900,000.
I utilize a private lender who puts up the money to buy the note, I pay him a very high interest rate of 12% and one point for his idiot son who at the age of 34 has not learned to write but is taking the Brokers Examination for a Real Estate License. I think it is his girl friend who is really taking the examination, I wonder how she looks with a mustache.
At this point you can Flip/Flop, ivy mop, to someone who wants to collect rents, or you can arrange financing from Western Mutual or whoever and add it to your long portfolio of rentals.
I selected this one as it is close to where I live and I can skate board over and check on the tenants. But there are an awful lot just now coming into Foreclosure. Most of the Assignees seem to be little private banks, with, really great political connections. talk about history repeating it self, the Gracus Brothers in old Rome. The roaring 100's way back in AD. Right out of the history book. Lets see AD, that stands for After Dominos, before Chess. Lucius
As another great mix of abuse of power and corruption, I think this article is greatly connected with the one describing grate New York builders , which I read earlier of one of the posted links. I believe it was called "Who is Donald Trump" but that topic is now nowhere to be found???? What happened with that post? I looked in Builder's section and is not there anymore.
BTW, who do you think is behind the $200,000.000 purchase deal? Sounds like a lot of money to me.
I also wonder if that LA broker is in fact watching someone's back?
I saw the postings today on the Donald. Omega did some research and used to live next door to Trump on 5th ave back in the Early 90's Pretty accurate stuff. Also knew Fred his father who did a lot of building of units in Brooklyn. I'm sorry I am away from my research materials and this is off the top of my head.
Yes I am monitoring the sale of the note assigned to the little bank in Plano. that foreclosure has been cured and another one begun from the position of the second. What I do not understand is by reinstating that big first of $1,250 they are upside down as to value. Unless....Unless...the first is now undercontrol from a discounted amount and the forclosure of the second of $100,000 is merely to throw the light onto Elis the local broker and away from what else occured.
I am not suprised since the dawn of history, when power is assumed it is normal for profits to the power holders and their associates just start to accrue.
I am going to stay on this one all the way up to and including the dates after forclosure when titles start to p*****, then lets see what pops.
Please do not think I am some wild a$$ reformer I am not. Read too much history. It is just that there is an enrichment to be gained somewhere in this income stream. For example there has not been a receiver appointed to hold rents. Nothing like that. Same management company still working away.
Ah well Oh tempores, Oh Mores Lucius
Let me know what comes out of it, for at list historically-educational purposes
WheelerDealer
You said you have never seen the docs. Just FYI, if you go to the recorders office (where documents & deed are filed/registered) you can review the docs. There you will find the notary stamps on these docs. You can track from there as Lucius suggests. I am going to be looking for other info in order to use this info to further my access to info. Let you know.
Dreamin
Yeah. that would be real interesting research. You will have to post that as an article. If you get time. Im sure all would find it interesting. Lufos is full of wisdom and experience. I enjoy that man.
WD
Are you sure you dont want to try acting. its in your blood, i know!!
How do you find who a nonforming note has been sold. If sold at all and at what price? It cant be a S.w.A.g can it? ( Sophisticated Wild -A$$ Guess)
I saw the default on Retran and ran on it. I made a bid to buy the note from the Bank of Beal in Plano Texas. I found out they had paid 18% of face with a promissory note.
It was in a group of Non Performing Loans FEEMA, only $200,000,000. worth. I knew such a bank did not have that capital to pay so it had to be a note. I offered them $22% of note face. Was ready to come up to 25%. But FHA sent a Loss/Mitigator down to handle the REO and he canceled the deal. Suddenly George Ellis local big time broker started to foreclosure on his $100,000 second and brought the first of $1,250,000 current. I am having lunch with Georgie Porgy tomorrow, Being very Political I think he is covering somebodies A$$ in Wash.DC. I am of course willing to pay as high as $600,000 and that may be what this is all about. who knows I just go. You see you never know, a deal is never stopped it just takes a new direction. Very strange that FHA send their sharpest Mitigator down to Texas to a little bank in Plano Texas Now theres a Blind Trust I would like to pierce. Right Derrick Ali?
You know of course FHA is having problems a small matter of not properly identifying losses on guarantees of non performing paper. I think I have figured out how they have been hiding the losses. Most of you who have tried to work with HUD have probably figured it out also. You shuffle after foreclosure and do not bring it to market. You just let it stew around as you transfer the titles around for awhile and sort of lose track.
Notice how long after a foreclosure before it gets out to the Brokers, I followed one here in the Valley for four months after the sale until it was finaly listed. Then they changed and held it for Non Profits Only. Got to say the man that bought it and is fixing it up is going to sell it for a profit. I know, I asked.
Strange world, Lucius
I almost forgot, speaking of Derrick Ali, I finaly figured how to pierce Blind Trusts, and of course Land Trusts. Simple cannot see why I did'nt think of it, the one weak link in all recorded Deeds.
The Notary.
Document is notarized for recordation, there at the bottom is the seal, with name, date. So check with Dept of State of that State and they will give you address and etc. of the Notary. So Go Look. Also check upper left hand side of document. Where was it mailed to after recordation. thats your next start point .
Between those two leads you should be able with a little leg work identify all the players.
Curious Lucius
if your looking at the document to see the notory arnt the names she notorized there too? with addresses? This may be an ignorant question because i have never seen the doc's to know
if possession is 9/10th of the law then ignorance must be the other1/10th
Hummm
as a notary I shall have to be a little prepared to review this tidbit of info
I will as soon as I gather some info.
And Lucius if you read this I am not starting your fan club you'll just have to enjoy my quiet admiration.
And as for Lucius I agree. I find many of his commentatry educational and entertaining. I also agree with much of his "ideals", there is a lot to say for experience and there is a lost admiration for listening to our elders!