mY DREAMS OF BECOMING A LAND BARRON HAVE CRASHED

[JMPRO]

I loaned money on a second trust deed on a house in Boise. The appraisal looked good and the house would only be funded to about 80%of its value. The guy left town and let the house go back to the bank. In order to protect my 2nd I bought the first from the bank to prevent it from going to auction. Now I find out the house was way overvalued on the appraisal and the house isn't fit for pigs to live in. If I sell it in the condition its in I will be lucky to even sell it and will certainly loose money. If I put about 30g in it to make it presentable I will still loose money, just not as much. My thinking is to just dump it and take my bumps and my wife thinks we should fix it up and try for a smaller loss of coarse it was her decision to loan the money in the first place so she feels responsible for the mess. I have looked into suing the appraiser but it looks like that won't be easy and may cost as much as I have lost . My vote is " Your first loss is your best loss" and don't throw good money after bad. Sell it to the next dufas that comes along and be done with it.
Your thoughts?
JMPRO

[URY914]

Gotta match?

[MikeSid]

It's probably uncollectable, but don't forget that the guy still owes you the money. Just because you have taken the collateral, doesn't extinguish his obligation on the note.

It's probably a long shot even finding him, but with that kind of money involved, you wouldn't want to rule it out as a possibility.

How's the rental market in Boise?

[Jims5543]

Do you have insurance to cover the damage to the home?


You know the market your house is in the best. I was in a situation where I had a house loosing value fast and I needed to dump it. I was given the advise to cut and run and I did, I lost 45K on the house and the "ugly home buyer" lost another 45K on it since buying it from me.

I am glad I did not ride it down for the whole 90K. The 45K hurt bad but a lot less than 90.

[Tishabet]

Sounds like a sucky situation... I think your "first loss is your best loss" philosophy is right on, I would dump it ASAP.
How did you know the guy who walked?

[RANDY P]

I hope you guys know how to find the buyer.

EDIT NEVERMIND DIDN'T SEE THAT YOU OWN THE NOTE. SORRY.

In order to make it appealing at least fix it up so that it will pass a home inspection, and that's it. If you sell it damaged you're limiting the clients you have to buy with.

Otherwise - next time:

Offer to remove the 2nd lien and convert it to an unsecured note so they can sell it. Talk it over with the buyer and the bank and cross your fingers they take it. Bank will, buyer should too.

Then you can go after the buyer all you want and have recourse since it's no longer a home loan. Check with an attorney 1st.

2nd thing, have the appraisal, and the entire loan file (if applicable) checked over professionally - if there's fraud involved you might have recourse there. I'd call the state licensing authorities. if you take the hit the appraiser doesn't deserve to be in biz.

rjp

[JMPRO]

Its an awfully expensive lesson but I think the cut and run tactic is my best coarse . The guy just took his cloths and split for Arkansas. I could probably track him down but he doesn't have a pot to pee in so there is nothing to collect. All the damage to the house was there when the appraiser did his work{apparently he just phoned it in} so the insurance won't cover anything. The only other option is getting on a plane and doing my own survey of the property and then deciding what to do. If I have to stay in Boise for a month or two while I get this dump in order I guess thats what I'll have to do. The only solice in that is that my wife will have to ship and package orders for Pelican Parts and others while i'm gone. That way she will have to pay a little for her mistake.
JMPRO

[RANDY P]

Now the way the market is I'd spend the money on cleanup and repairs (well, within reason of course) - otherwise it will be down to a private investor or a cash buyer since there aren't any residental lenders that will touch it. if the house is physically damaged you're really limiting your audience.

Sorry to hear about the tough break.

rjp

[tabs]

Go take a look at your mistake...I would say clean it up enough so that it looks like a dump instead of a sty. A few hundred into it might trim some of that loss. Talk to an attorney and find out what your options are. Then sit down with the wifey and talk it out. I hear from Motion that Montana is a ncie place to live...

[RANDY P]

sell it to Motion. He's loaded.

rjp

[JMPRO]

Looks like i'll be headed off to Boise for a look see although I have a pretty good idea of what i'll find . A realtor I have been talking with sent me some pics of the place and we have already had some one go in and clean out all the junk car parts, old spare tires, refrigerators and what ever else wouldn't fit in the back of a pickum-up-truck for a trip to Arkansas. Perhaps Hillery could find some sort of a special tax refund for me seeing as how the jerk was from her home state. The deal was brokered by a broker we had been working with on other funding ventures that had been very sucessful, this is the only one to go bad so I am still ahead of the game .
JMPRO

[MikeSid]

I guess I don't understand what you did, because you said you you bought out the first to keep it from going to auction. That means the guy you loaned money to is still the owner of the property. Which means you are trespassing and removing his belongings.

You might want to talk to a lawyer before taking additional steps. I would have advised you to let it go to auction and buy it then. That way, you own the fee and can do what you will with the personal property left on the lot. Maybe this is what you did, but it's not how your first post reads.

Owner or not you'll ultimately be liable for taxes. If that carrying cost is manageable, you could hold, rent and resell in couple years. Anyway, best of luck.

[MT930]

Will it cash flow as a rental? can you make a return on what you have in to it and what you will have to spend to make it rent-able? Thats maybe a way to weather the storm?

[JMPRO]

The bank forclosed on the first and we steped in and bought the first before it went to auction . I tried to get the bank to discount the first to me but they knew they had me by the short hairs and wouldn't deal.If it had gone to auction I wouldn't have recovered any of my 2nd because the bank only wanted to cover thier loss. Looking back I should have just let the bank do what they want with it and written off the 2nd trust deed as a loss. All in all the venture capital business was not a bad deal and even if I take a loss on this property I still made money although I don't think I will get back into soon.
JMPRO