Real Estate hell, what to do?

[Danny_Ocean]

Originally posted by nota
is it legal to sell to a dummy CORP you own
with a re-fi at 100% current value
and walk/run [actualy] away
and let them re-po it

No, that is not legal. Mortgage fraud, lending fraud, grand theft, etc., etc.

[Danny_Ocean]

Jim,

I'll be driving through Pt. Saint Lucie this weekend. Will check it out and give you my .02. A friend owns three houses there and has had mixed success with renting.

Now, I have another question. Are you a contractor? How do you go through all this mess (with your home/office), then proceed to do a build-out of your new office without permits/inspections? Don't get me wrong, we've all done it (and we all despise building inspectors), but don't you think they might be keeping an eye on you? Those bastids are like roaches...you can't get rid of 'em!

[nota]

Originally posted by Danny_Ocean
No, that is not legal. Mortgage fraud, lending fraud, grand theft, etc., etc.

how is that fraud , bank lends at current value
on the prop after inspection and survey thats their risk
where is the fraud it is worth x amount and they check
and grand theft?? they get the prop as per the contract
no stealing just smart sharp dealing

CORP bit is just to keep repo off your personal credit rateing

as I understand Fla law a CORP owned rental house limits the owners liability to the value of the asset owned by the CORP
in the case of the house zero as it is fully leveraged by
Mortgage[s] it may take 2 or 3 to get to 100% on a non owner Occupied house
and you pay yourself the value receved from the loan as the CEO of the CORP

and if you can't rent for the cost of the loans
there is no way to show a gain
so the CORP is going bust anyway
even if you work at it

[Danny_Ocean]

Intent. You "broke the law" in the first sentence of your orignal post.

Throughout your mortgage application there will be little checkboxes which you will initial. These checkboxes/initials will be the "catch" come time to face the music.

Tell you what. Give it a try and let us know how it works out. I'll send you a cake with a file in it...

Nonetheless, he still has to pay off the original note. That doesn't disappear into thin air.

[Jims5543]

I moved one county south and into another city.

Basically the City I had my office in lost 10 jobs chasing me out. That might seem funny to you but, with the way the economy in that town is heading every job will count.

It gave me great pleasure to rent that house out for the last year to,.... hmmm. lets say a good 'ol country boy. He had a mobile home on the property dead cars in the front yard, a real eye sore. It made me happy because when I had my business there the place look perfect.

We were also the perfect neighbor, we left at 5 o'clock and were never around on the weekend. The tenant would sit in the driveway and drink till 2 in the morning, shoot off fireworks whenever he felt like it, and played with one of those train horns whenever he felt like it.

The city was really looking out for the residents best interests here.

To answer you question, the building had multiple projects going at once, Electrical was inspected and the fire marshal came out and inspected it as well.

A permit was not needed for the walls because they do not go past the drop cieling and technically they are partial walls and are exempt from needing a permit/inspection.

The mess with the Home/Office was an act of desperation. There were no offices to be had in Oct-Dec 2004 for a resonable amount of money if at all.

I decided to buy this house because it is on a 4 lane road across from a Polish / American club, very commercial in the area. I had not researched it yet but figured I could get a resdential/ Professional license to operate there. Most cities have them, not this one.

Also, 50% of my competitors work from their homes, illegally and the city turns a blind eye to it. There is no way to operate a Land Surveying business out of your home and not have emplyees report to work or clients come buy to pick up or drop off work. Both are violations and the reasons I got in trouble, mainly employees in the house. Yet 10+ Surveying companies in Port St. Lucie are operating illegally. (we had a very good reason to do this) The owner was smarter than me, he had the Occ. License registered to his dads home address, so when they inspect, everything is cool.

My honesty kicked my own butt.

[Jims5543]

Originally posted by Danny_Ocean
Jim,

I'll be driving through Pt. Saint Lucie this weekend. Will check it out and give you my .02. A friend owns three houses there and has had mixed success with renting.

If you want to go out for a drink drop a line I'll PM you my contact info.

I know some really cool watering holes that are all about Florida.

I'll be around all weekend.

Jim

[Danny_Ocean]

Originally posted by Jim Cesiro
To answer you question, the building had multiple projects going at once, Electrical was inspected and the fire marshal came out and inspected it as well.

A permit was not needed for the walls because they do not go past the drop cieling and technically they are partial walls and are exempt from needing a permit/inspection.

Wow! I'm moving up there! Here in Broward/Palm Beach/Dade, you can't crap in a hat without having it inspected first. We have permits/inspections for FREAKIN WINDOW SCREENS @ $100 per unit! So, a 10-unit bldg. = $1000.00 permit fees to replace $500.00 worth of screens...

The build-out you detailed in your other thread would have taken over a month to complete with inspections, permits, plans.

[JeremyD]

Originally posted by Wayne at Pelican Parts
Seems like you might want to cut and run, since you didn't buy it for an investment, and values seem to be tanking everywhere...

-Wayne

Not sure I agree with you on this Wayne - 3rd Q 2006 vs 3rd Q 2005 - out of 148 metro markets 102 had price gains in median - 21 metro areas had double digit gains - 45 had price declines.

Salt lake city had a 19.2% gain for example. (hell, even SFO had a 3.8% increase) Yes more inventory out there than last year = but last year there was obviously a shortage of inventory because prices were being driven up at an alarming rate.

I don't subscribe to the doom and gloom real estate theory. In the areas where there are jobs that support the lifestyle, I think the RE prices will moderate. On that note, I wouldn't want to own a house in an area where the big three automakers had a presence.

The attention span of the american consumer is around the same lenght as the knat. 6 months from now, we'll be worrying about the TomKat split...

[Jims5543]

I have a property manager getting me some comps for renting and tcomps for sale.

I am going to push to sell it by Feb 1 2007, if not then I am going to rent it for a year then decide what to do after I see what the market here is doing.

This is going to turn the thread political sorry.

My only resevation is I feel the national economy is on the edge of imploding. The spending spree over the last 6 years coupled with new blood taking over and "trying to fix the problem" will be remeniscent of the late 80's early 90's. If, a year from now, things are starting to tank economically I am going to be in a lot of trouble.

This is also in the back of my mind.

[turbo6bar]

Cesiro, you're heading in the right direction. You may find renting will be less attractive, particulary if you can sell and break even. If the market hasn't fallen apart, I think you may be able to sell and focus on the better things in life.

[Jims5543]

I am trying to come to grips with this disaster and have come up witht he following anology to make me feel better.

I had my office in this house from Jan. 05 until Feb '05 = 13 months.

Over those 13 months my overhead was approx $1000 less than if I was renting an office space. = 13,000

I rented the house for $1200 a month up until this month 10 months at a $300 loss = $3,000.

So I am sort of ahead of the game by approx $10,000.

If I was to list this house for 179K after paying 189K and can actually sell it at this price or close to it. I think I am not loosing too bad.

There, I think I feel a little better.


I need a beer.

[turbo6bar]

Jim, the perceived value of the home has changed since the time you bought. Obviously, there is nothing you can do about it now. You were in the wrong place at the wrong time. You could lose a lot more.

I rent homes for a living. I KNOW exactly how much it costs to rent homes. Based on what I know, if you were prepared to stick with this property for the long-term, you might be OK or even do well. However, if you are unprepared or are looking short-term, this house could drain you financially, mentally, and physically.

In my opinion, this RE heck is just the cost of doing business. It's easy for me to sit here and yap my mouth, but I'd tell you the same straight to your face. If the rent scenario does not pencil out, I'd list the property at $189k + 6% and take the first decent offer that hits your desk. This presumes the price is under currently listed comparable properties.

You have a badarse SC with 3.6. That's good medicine. Use it.

[the]

I'd get out now. RE in that area hasn't come close to bottoming out yet, that will take years, not months.

IMO, looking back a year from now, you'll be happy that you sold now, even if you take a small loss.

[Danny_Ocean]

"It's not what you buy, it's what you hold...."

Some rich guy gave me that advice. I'm sticking with it. Unless you're next to Love Canal, real estate generally appreciates over long periods of time, just like the stock market or most other commodoties.

[pbs911]

Have you thought about a lease with option to buy? Lots of people in Florida find this very attractive, particularily in that area of the woods. Personally I would not want to sell a house in PSL now if I was losing money each month. To many developers offering very low prices, financing, upgrades etc. Buyers are waiting, unless the property is the right property. That said. FL real estate is really holding its prices. To sell, however, you have to make it very attractive (I.e. lowering price.) At $179k you sound very competative without seeing the property.

Get a good tax attorney and you may be able to write off some of the losses for a rental unit.

[turbo6bar]

"It's No Longer Business As Usual" in Florida

I wonder if selling will not induce a lot of pain now. If the market continues to slump into next spring, then I would say sell now. If the market levels, then you might fair better holding. I think it's time to blow the dust off your crystal ball.

[JeremyD]

And I definitely agree that the condo market has been unjustly overbuilt. If it was a condo we were talking about - my advice would be to sell it for what you can as fast as you can.

[Jims5543]

I just got my adjusted mortgage payment due to a huge property tax increase and insurance increase the monthly payment went up $400 a month from 1400 a month to 1800 a month.

No wonder Port St. Lucie is turning into a ghost town.

Wow! Now I am not sure what to do anymore. At 1400 a month I could barely justify hanging on to it. Now at 1800 a month I need to get rid of it. At best I may be able to rent it at 1200 a month.

Now I understand whay everyone is leaving here and the real estate market is dead. My hell just got hotter.

[turbo6bar]

Look on the bright side. At least you don't own 3 flip properties that won't cash flow worth a damn. Mean reversion is a b!tch.

I wish you the best of luck.
jurgen

[Dantilla]

Originally posted by nota
is it legal to sell to a dummy CORP you own
with a re-fi at 100% current value
and walk/run [actualy] away
and let them re-po it

In any small corporation, to get a loan the principals will still need to sign a personal guarentee.