I Made A Mistake And Need Advise
I am fairly new in real estate. I am a agent as well as a loan officer and I'm learning my lessons the hard way.
About six months ago I was working with a friend who sold me on the fact as well as three others that he was an experienced investor here in Arizona. I and the three others got involved in a property he was purchasing with hard money. He showed us that we stood to make at least 40% on a minimal investment for fix up costs and if he would have done what his proposal was we would have.
So we all did it, we each gave him about twenty five hundred each and repairs actually spent were only about 3500.00. Here is the stupid part ,all any of us have is a cancelled check with note in the memo for what it was for.
Since then I sold it once and they sold it about three times, each deal falls out during the inspection period. The listing agent called me to inform me that another contract has been written on the property waiving the inspection period accepting it as is but the person on title the individual that we trusted will not accept and just keeps delaying the process. According to him we would lose about 5 grand but thats spread over 5 people.
Is there any way to cloud the title on this property with the county or should I just chalk it up to another hard lesson learned.
What is coming up on the inspections that make the deal fall through?
[addsig]
The amount of work that is still not completed. So for face value they made the property look presentable but when you really pick it apart the money that they didn't put into it would have covered a good portion of the list.
Find out if he still thinks he can sell it for enough to make the profit he was promising. If he thinks he can offer to let him buy you out of the property for your initial investment amount. Likely he knows he's screwed and won't do it but if he really believes that he's got a clue he'll think that's a great deal.
On the bright side at least you don't have any holding costs to worry about. As far as costly RE lessons go $2500 is a pretty cheap one. You might even have found some other potential partners or people to compare deals with in your other 3 partners (assuming you three still get along).
There are some things that you can do, like reporting him to SEC & the attorney general.
However, this may come back to hunt you!
Personally, I would chalk it up as a hard lesson learned!
Any time you deal with money and real-estate you as the money backer need to take control of the property by way of deed, sounds like he has property control!
[addsig]
5K does not seem like a lot spread over 5 people. Why not hold onto the property and rent it out until the value rises to cover the 5 K?
Generally most areas go up 5.4% a year,the home is a 100K home then a year ought to do it.
I toally agreed with the rest just eat it up and take it as a lesson that how we all get the experience we need to be successful. But next time make sure you have the deed.
Your case is almost silimar to mines where I cured a defult with a gentleman that was having a little chanllege where after 30 days he was going to refinace the home but never did and he was trying to prolong in paying me back which is 100% of the money borrowed from me. But the good thing is that I had made a contract with the gentleman had it notiarize and also had him give me the quit deed to the home and now he is really in for a treat once i throw him out of his home. :-D