My second REO assigment in the last two weeks, after a couple of dry months – could this be the beginning? I think it is, but the quality isn’t great yet, at least of the ones they send me. This 1,245sf house on Paseo Ajanta in Rancho Penasquitos will probably need to be in the low-$300,000s or lower to find a buyer:
They have to get better, don’t they?
Nice belly shot. Thanks, there goes my dinner.
“I guess things didn’t work out to good”. Classic. Your a true straight man.
“It’s a misunderstanding.” Nice landlord comment. That renter had a decent head on his shoulders in spite of “the BIG truck” convention in front of the place.
Rock on.
Good stuff. Its interesting to see how things go down on the front lines.
I hate reality tv, but I loved that. If I didn’t know better I’d think you were in some Florida barrio with the toplessness and big pickup. Owners asking for rent after a foreclosure should go straight to jail without a trial. How much is the cash for keys again?
That totally sucks. We have friends who just went through something similar as renters.
At least the renter was smart enough to not pay the rent when the deadbeat LL was going into foreclosure. These rent-skimming LLs should be sent straight to jail, and should also be fined treble damages, payable to the affected renters.
These foreclosed-on renters are the only true victims in this housing “crisis.”
i think it’s great the renter gets the cash for keys money. i would’ve thought the owner was entitled to it or would at least try to get a piece.
would those 30 or 60 days he has left there be rent free? if not, what if he refused to pay?
“I’m a realtor…Jim the Realtor”. Priceless.
Jim,
You handled that perfectly.
The guy renting is caught in the middle between a deadbeat owner and a greedy property management company trying to get something for nothing.
That could have been a lot worse.At least you werent confronted with a shotgun or pistle whipped out in the front yard.They dont pay you enough to deal with that crap.You should hire a bodyguard to go out with you.Or better yet stop into home depot and pick up a couple friends for protection if all hell breaks lose.I kind of reminds me of those domestic violence calls cops get.You never know what will happen in those cases.
What a sleazy scumbag debtholder to be collecting rent 6 months since he stopped paying for the house, some people have no shame.
The owner is a dirtbag for trying to collect rent on a house he’s defaulted on.
Arizona makes a great point about being prepared for a confrontation when making these types of visits.
Handled that perfectly. A pretty dangerous position to be in with the wrong tenant. I would wear a vest.
I thought the video was informative and helps to show how these situations work out. I don’t know about the “greedy property property management company” –Shadash They are stuck too and don’t get paid unless rent get paid.
Something else to keep in mind regarding required consent for recording others.
http://tech.yahoo.com/blogs/null/150820?comment_start=26&comment_count=20
With all of the stories I have heard. I would bet 1 out of every 30 homes in SEH has had something like this going on in the last 4 years. Between those living in their homes for free and those collecting free rent. It is sad to see people have no ethical problem with this.
Wiretapping is a class D felony, and that can mean up to 12 years in prison.
Dang, I guess I won’t be needing that spy tie that just arrived!
“greedy property property management company” –Shadash They are stuck too and don’t get paid unless rent get paid.
How exactly is the property management company “stuck”? They have the renters deposit.
“In 12 states (California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania, and Washington) you’re required to get the permission of all parties on the line before making any kind of recording.”
If the guy had a problem with being recorded he would have objected.The recorder was in clear site and not being concealed.
Jim, the tenant has the right to stay for another 90 days or until the end of the current lease term, whichever is greater.
If the new owner intends to occupy the house as a primary residence the tenant has 90 days regardless of the lease term.
The tenant is expected to pay the rent during that time.
CA law says 60 days, last May’s Federal law extended that to what I wrote above.
You can sell it with the tenant inside, but you need the tenant to be cooperative and let buyer/inspector/appraiser enter the property.
The inflationary hedge I bought few months ago was like that. I let the tenant stay until the end of 90-day term without paying the rent. The tenant took good care of my hedge and surrendered the keys on 90th day.
Bet ya have a line of folks willing to pony up at least 375K for that one. Should sell for at least 400K
PQutness,
There’s another foreclosure down the street (#090042020)that doesn’t back up to the 15 selling for 365k and has been on the market for the last 80 days.
So maybe Jim will get 400k. It all depends on finding the right FHA funny-money buyer.
That’s a rough job, Jim. I agree that both you and the renter handled it well. Do you have any good stories of things going wrong when delivering the bad news?
Oh the joys of REO’s. You should make the asset manager ride along on your next trip and send them to the front door to give notice. I was under the impression that finding a rental using a property management company would prevent you from dealing with deadbeat LL’s. I guess there’s probably as many bad, unethical property managers as there bad, unethical realtors.
Great video keep up the good work.
That went about as well as it could have. I was a victim of rent skimming by a deadbeat LL a couple of years ago down by the beach in oside. I can’t tell you how angry I was when I found out. Of course I got the same BS “we’re working things out with the bank”.
I researched the law and talked to a lawyer about options, but in the end I didn’t want to get my name on any lawsuits or eviction proceedings. I didn’t even get cash for keys. I also never got my (significant) deposit back from the dirtbag. They should assign a special task force to prosecuting these lowlifes.
It was my understanding (could be wrong) that a property management(PM)company is just a middle man between the tenant and landlord. I wouldn’t think the PM would necessarily know whether the landlord is making their payments or know if a foreclosure is pending. The PM makes their money from a percentage of the rent paid. An agreement is establshed between the PM and the landlord. Any funds left over from a deposit goes to landlord.
By the way I’m glad the video was made and was handled well. It highlighted a number of issues facing folks in this market.
REB,
I’m not an attorney so I’m not giving legal advice here, but I used to do a bit of magazine writing and I tried to stay aware of the rules on taping. California makes a distinction between conversations that happen where a person has an expectation of privacy and those that happen where others could overhear. Here’s a quote (I’ll add the full link to this and another article at the end of the post):
“Conversations that occur in a public space or in an area where the parties do not have any expectation of privacy are not covered by the wiretapping statute. Therefore, you generally are free to record a conversation happening between people in a public place, such as a street, a park, or on the steps of a courthouse, even without consent.”
http://www.citmedialaw.org/legal-guide/california/california-recording-law
http://www.rcfp.org/taping/states/california.html
A story viewed by a lot today about a WF foreclosed home occupied by its exec
http://www.latimes.com/business/la-fi-malibu-wells11-2009sep11,0,740504.story
Jim–You handled that so well and the renter seemed very reasonable, which helps. That encounter was living proof of that old saying, “the truth will make you free.” You didn’t try to spin or BS. If only all parties to such events would be truthful and fair, a lot of these dishonest games wouldn’t play out. I agree with all who said that these landlords who know they are in default are real vermin for collecting rent when they no longer actually own the property. Who knows–you may have gotten a new client for yourself with this renter. Please update us on this.
How much does cash for keys give a person to move out? If it’s only a thousand bucks, I’d be more inclined to just squat for 2 months than to take the cash and move.
Also, this comment section is getting out of hand. I used to enjoy reading them, but now all I see is the same broken record: “deadbeats, scumbags, throw em in jail.” I’m starting to think some of you posters are crazier than the housing speculators.
I would like to see a new law changing the rent skimming. Basically LL should be required to hold rent in an escrow along with the deposit once they are in a foreclosure. If they can’t afford to do this, the renter has the right to stop paying rent until he recoups his deposit plus one month’s rent to cover the cost of moving. And LL should be required by Law to CC renters on all notices involving a foreclosure. Failure to do so should also be a felony and include 6 months prison. While the LL would likely never go to prison, it would be on his / her record and would stop much of the abuse.
I think I need to write my state legislator. Maybe we can get them to do something good for once.
Hey Jim
REO question. Lets say you have a REO listed at 350K. Would a bank give any preference to all to a cash buyer say at 300K?
I guess my question is how much weight does an all cash buyer have with regard to a “faceless” REO owner.
I think the desision making differences between traditional sellers vs. REO managers is pretty interesting to hear about.
Have a good weekend.
LM
chrisL, you might have a different opinion if you were the one being scammed out of thousands of dollars.
If you don’t think someone should go to jail for doing something illegal then I don’t know what else to say…
Question about Sherrif reimbursements?. . .I saw an item in the national press today about how sherrif departments are spending a huge amount of time serving foreclosure notices – sometimes two a day. . .is there any reimbursement from banks to the departments??. . .seems to me that the taxpayers otherwise are footing the bill for lots of sherrif time that could otherwise be used for crime prevention, etc.
“chrisL, you might have a different opinion if you were the one being scammed out of thousands of dollars. ”
How are you being scammed out of thousands of dollars when you are living there? You have a contract with the home owner. You signed the contract to pay on an agreeable date in exchange for renting the property. It is between you and the property owner. If you don’t make rent payments then the owner can evict you.
Whatever agreement the owner has with the bank is between them and the bank. Not you! Rest assured, if they fail to pay the bank then the bank will assume ownership. Those are the consequences.
There is nothing illegal about that. Wake UP!
so they can keep your deposit and tell you to get out for no reason. you don’t know what your talking about, I researched it at length.
“so they can keep your deposit and tell you to get out for no reason. you don’t know what your talking about, I researched it at length.”
What are you talking about? You make no sense. I also seriously doubt you researched this topic at length. More like you googled it while drinking a PBR.
Whatever agreement the owner has with the bank is between them and the bank. Not you! Rest assured, if they fail to pay the bank then the bank will assume ownership. Those are the consequences.
Except the LL gets a pile of cash from the tenant and some ruined credit, while the tenant has to move.
You signed the contract to pay on an agreeable date in exchange for renting the property. It is between you and the property owner. If you don’t make rent payments then the owner can evict you.
Except the LL failed to make his payments, so you have to move out before the end of your lease. That would be breaking his end of the contract.
I agree, that if they stop paying the mortgage, there is a good chance you won’t get your deposit back, plus you now have to look at relocating before your rental contract period is up. Therefore, this is an added expense in time and money to the renter to relocate. Why continue to pay? Better to be smart about it like this guy was. I bet a percent of the increase in “savings rate” nationally is landlords pocketing rents and not paying their mortgages and milking the system for as long as they can. For simple numbers, if you had 10 properties, each paying an average of $2000 per month, and you held of paying the mortgage for 12 months, that’s $240,000 for the year! Heck, make a couple payments to keep the bank happy through that time, run it out to 2 years, and you would have over $400,000 in the bank. If you’re a renter, try to hold off for 1 year and you now have $24,000 in the bank for a downpayment on your own place!
Jim, unfortunately, this guy should hold out for the maximum 90 days and save the approx. $6,000 for himself ($2,000 x 3) to make up for his lost deposit, having to relocate, pain and suffering, etc.
told ya…..
“The District Attorney’s Office has decided not to file charges against Chargers linebacker Shawne Merriman in the alleged domestic dispute with MTV star Tila Tequila.”
Woot! That’s gotta be a relief for everyone involved. Any chance we’re going to retain Merriman after his contract’s up?
I think I agree with chrisL on some issues with this whole landlord deal.As long as the landlord owns the house the tenant should keep paying rent to the landlord.If the bank takes the house back and is the new owner than tenant should deal with the bank.As long as the landlord is the owner they should get rent regardless if they have been served with a notice of default or notice of trustees sale.The landlord could clear everything up on the corthouse steps and retain possession of the house.They are the owner until an officail trustees sale.I have heard countless arguments from renters saying they dont need tyo pay rent if the landlord is having issues.That is just an excuse not to pay rent.
Merriman….Off the hook….again! He has been pretty lucky. Maybe now he’ll play some football instead of spending much of his time drinking at downtown clubs…..
That was a very weird video to watch… a executive at my work is here from Australia on an extended business stay (3+ years), and rents nice big houses in Aviara. He’s been booted out twice now by the homeowner defaulting, and now is looking to move. He has to ask if the property he’s about to lease is in foreclosure, they don’t disclose it. So far, 3 of 4 are in the foreclosure process and the 4th guy got pissed off and was insulted that he ask.
Go figure.
You know AJ Smith doesn’t like Shawne’s “Hollywood” lifestyle, and he’ll run him after this year.
Unless we win the Super Bowl?
LM,
The most discount I’ve seen an asset manager give to a cash buyer is only $5,000 or so, but that was a few months ago.
The owner-occupiers are now are going so much over list price that the investors are being left behind.
“Unless we win the Super Bowl?” (Jim)
Hate to break your heart, JtR, but your Chargers will NOT win the Super Bowl…
Now reread, the first five words of my reply, Jim. I’m trying to be as compassionate as possible just as you were to me re: that solar house. Alas, *Sniff Sniff* it was the “saddest” news I’ve ever received via email…
I’m not saying that the tenant should stop paying rent, but the landlord collecting the rent and not informing the tenant that the house is going back to the bank is unethical and dishonest. Did that LL have any intention of keeping the house? The first the tenant hears about the NOT shouldn’t be from the sheriff.
I don’t understand why people are assuming the deposit will be lost. The deposit I have for the condo I rent is kept in an escrow account and is only to be distributed to the owner under the terms of my rental agreement like if I damage the condo and money needs to be used for repairs. It is untouchable by either the property management company or the owner except under the explicit terms of the rental agreement. Is California different and let’s deposit money go directly to the owner? Who the hell rents under those kinds of terms?
People desperate for housing maybe?