any gap funders here deal with an investor not paying them back

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any gap funders here deal with an investor not paying them back

Alexandra V Moreno
Member since 2020 · 6 posts · 1 vote

Hi everyone. 

I am a gap funder. Have a second lien on this property. Our terms state that she was to pay me back by September 9th (including the 15th day grace period) and as of September 10th, she’d be in default.

Per all her texts and emails, she’s been saying she’d pay me back on time, or by a certain date but every time we get closer to that date, she changes the date or lies about how things are going. This most recent time she said she’d pay me by 09/28 (idk why that late  she never provides good info or updates) 


regardless as of September 10th she will be in default  

I have a second lien, promissory note and joint venture agreement. 

Has anyone persuaded legal recourse in something similar.  

The property is in Utica NY

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Matthew CrivelliBusiness Member
Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
5y

This should be par for the course when providing people with gap funding. It's a risky business because most people who use services like this don't have the money to begin with. One thing goes wrong and the borrower goes under water. I do know if they foreclose on them the first position lien wins and gets to recoup all their loses before the second is entitled to anything. Not to mention you're in New York state, I'm led to believe you will have a difficult time getting money out of this person. It's difficult to draw blood out of a stone. 

[email protected]413-348-8346
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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    5y

    This should be par for the course when providing people with gap funding. It's a risky business because most people who use services like this don't have the money to begin with. One thing goes wrong and the borrower goes under water. I do know if they foreclose on them the first position lien wins and gets to recoup all their loses before the second is entitled to anything. Not to mention you're in New York state, I'm led to believe you will have a difficult time getting money out of this person. It's difficult to draw blood out of a stone. 

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
    WebsiteView Page
    1Reply
  • Alexandra V Moreno
    OP
    Member since 2020 · 6 posts · 1 vote
    5y
    Originally posted by @Matthew Crivelli:

    This should be par for the course when providing people with gap funding. It's a risky business because most people who use services like this don't have the money to begin with. One thing goes wrong and the borrower goes under water. I do know if they foreclose on them the first position lien wins and gets to recoup all their loses before the second is entitled to anything. Not to mention you're in New York state, I'm led to believe you will have a difficult time getting money out of this person. It's difficult to draw blood out of a stone. 

     Can I ask what you meant in regards to it being New York specifically? 

    I wish I had gotten more of this kind of information beforehand. 

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    5y

    I say that because New York is a very liberal state and there courts are extremely backed up due to covid. I would contact a local attorney to verify your recourse.  @Alexandra V Moreno

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
    WebsiteView Page
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  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Alexandra V Moreno searched for time to foreclose in New York and the average time is 445 days. Might be longer now due to covid. Are you notified if she doesn't pay the first mortgage. To protect your interest you might have to make payments to the first mortgage. Just found out that in Q3 of 2019 it is taking over a 1000 days to foreclose.

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  • Scott WolfPro Member
    Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 960 votes
    5y

    @Alexandra V Moreno, my friend Henry Graham deals with this a lot downstate in NYC.  He's an attorney.  You can reach out to him and see if he can assist. His email is: hgraham at cpc-law.com

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    5y
    Originally posted by @Alexandra V Moreno:

    Hi everyone. 

    I am a gap funder. Have a second lien on this property. Our terms state that she was to pay me back by September 9th (including the 15th day grace period) and as of September 10th, she’d be in default.

    Per all her texts and emails, she’s been saying she’d pay me back on time, or by a certain date but every time we get closer to that date, she changes the date or lies about how things are going. This most recent time she said she’d pay me by 09/28 (idk why that late  she never provides good info or updates) 


    regardless as of September 10th she will be in default  

    I have a second lien, promissory note and joint venture agreement. 

    Has anyone persuaded legal recourse in something similar.  

    The property is in Utica NY

    It matters more at this point what is in the Joint Venture Agreement and Promissory Note. Properly written agreements will tell you what your options are. 

    As a lender, you have the right and obligation to visit the site and determine progress. Talk to her or the contractor and find out what is actually going on.

    Then, if you are not satisfied, I would have an attorney send her a letter of "specific performance." That will put her on notice that you have lost your patience. Since you don't mention the numbers, or what the JV Agreement says, we're left to guess what the best course of action is.

    Have a real estate attorney review your agreements, make recommendations to you & then repost your question.

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  • Alexandra V Moreno
    OP
    Member since 2020 · 6 posts · 1 vote
    5y
    Originally posted by @Scott Wolf:

    @Alexandra V Moreno, my friend Henry Graham deals with this a lot downstate in NYC.  He's an attorney.  You can reach out to him and see if he can assist. His email is: hgraham at cpc-law.com

    thank you so much! I appreciate the recommendation 

    1Reply
  • Scott WolfPro Member
    Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 960 votes
    5y
    Originally posted by @Alexandra V Moreno:
    Originally posted by @Scott Wolf:

    @Alexandra V Moreno, my friend Henry Graham deals with this a lot downstate in NYC.  He's an attorney.  You can reach out to him and see if he can assist. His email is: hgraham at cpc-law.com

    thank you so much! I appreciate the recommendation 

    Let him know I sent you!

    0Reply
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