All Forum Posts by: Arcinio Arauz

"THE CONSUMER FINANCIAL PROTECTION BUREAU HAS PUBLISHED THE FINAL REGULATIONS ON THE DODD-FRANK LEGISLATION AND IT WILL AFFECT THE WAY REAL ESTATE INVESTORS WILL DO THEIR BUSINESS ONCE THEY KICK IN."

This is a quote from an attorney friend of mine and he says some serious stuff is gonna go down for RE investors. Even if you've never done or ever will do Sub 2 deals or assignments...this will affect us all. Does anyone have more details on this?

I forgot about the AP aspect but if Ned is getting the deed, he would already be the owner and no need for a quiet title in 3-5 years after paying taxes.

No offense to any agent... I went to an estate sale and found a few nice things. I then asked about the house itself. The organizer of the sale didn't know much other than an heir's name. I found the trustee and went to visit her. She said the house would be for sale yet it was not listed yet. The trustee also gave me the agent's name and broker name. I asked if she was going to sell through MLS and she wasn't sure but apparently an agent was on it. After some small talk she found me a better alterative when I offered to buy the house cash as is. Thus, no need for inspections, appraisals, realtor commissions and waiting periods. She liked the fact that I would buy cash and we close in 5-7 days. So what about this realtor? If we sign a buy sell contract and go to title, is this realtor gonna mess me up?

Concerning this thread…I’m happy to know that even though there are differences in opinion as we share our thoughts, convictions and ideas, the thread stays clean. Ned and I seem to be on the same page, while others in the middle, some in disagreement and a few in question. Even so, thank you all for allowing this to stay in the arena of suitable, responsible and professional adults. If I take my dive and Ned his, I’m sure we’ll be able to post a blog here on BP of the positive outcome and great return in cash. Just the same, in the negative we’ll post our outcome if we get served and issued fines and jail time. LOL. Thanks again for keeping a good spirit everyone.

Carlos F.
I have the deed, pay the taxes, insurance and repairs. Therefore, I am the owner and I really do own the house. Also, I will be making partial payments to defaulted loan.

What does any property owner do someone stops paying rent...eviction and get another tenant.

Aaron Norris
I appreciate your feedback and piont of view. Let me make it clear that we are not falling into the propensity of not making attempts to pay back the mortgage. In fact my plan is to give 60% of the rents to the lender and use some the rents to make repairs to house while negotiating a payoff. Thus, my profits will be little at first but the end payday will be bigger. As far as ethics...what ill would I cause when

1. I keep my tenant in the loop on everything and legally have the deed
2. Make neighbors happy by restoring a vacant house
3. Bring house into codeing compliance per the city
4. Alleviate the original owner from the burden of being the owner of a distress
5. Make partial payments on existing mortgage while working to settle

Why don't lawyers do this? Beacause lawyers don't want to be landlords and they do very well in their profession already.
Sounds to me that is more a of good Samaritian act vs squatting. I can agree and see your view only if the "skimmer" was just collecting...not my case.

Reading on rent skimming in California...It seems as if there are two types a "single act and "multiple acts" of rent skimming. The single involves one residential rental property upon which a person collects rents without paying into the underlying loan within 1 year of aquiring property (what happens after a year? IDK). This is a civil claim and if I'm not mistaken, only a tenant who paid the rents can make this civil suit to recoupe any money loss. I have not read anywhere (yet) where a bank can sue for a single act. It's a civil claim against tenant and owner (if tenant even makes the claim) and is only subject to loss money from tenant.

The mutiple act involves 5 or more properties upon which a person collected rents and willingly was in the wrong by not paying any outstanding loans on those parcels aquired in a two year period. This multiple act of rent skimming is a criminal offence with high fiines and prison time. A lender, tenant and other lien holders can file this suit against the "skimmer"

The federal act of skimming involves any skimming against a VA or FHA type of loan in a multiple act.

Skimmer's defense: This is when the one collecting rents can defeat the skimming claim by proving:

1. Used rent income to pay medical expenses on self or family.
2. Used rent income to pay for repairs on property for safety reasons.
3. Had no ill intent to defraud and tried to meadiate with lender.

After some consideration and a few emails to attorneys, it looks as if Ned and I are pretty safe taken we know our tenant and keep them in the loop.

Aaron Norris: I believe Ned has the same exit plan as I do with my deal. We have no intentions to squat and collect rents then run off. If an owner is willing to hand over a deed then we become the owner of the property with a bad debt attached to it. In the end we wish to buy the property at a discount and perhaps hold or flip it. The question in mind is in regards to rent skimming. Nothing wrong with getting cash flow on a property you own while you make attempts to work with the bank as long as your state permits it.

Dawn A.: Yes you can work a deal with the lender. Even though the debt is 200k the bank will sometimes take less versus a foreclosure

K. Marie Poe: Where's the best place to find out what the notes says in regards to
rents; a deed of trust at recorder's office? Also, do you have a link on CA law about rent skimming.

I sent an email to the Lender. They said they'll reply within 48 hours.
Depending on what the lender says will determine my play. I'm also waiting for a response from my attorneys in California.
Im jumping over to Ned's topic on rent skimming. I'll keep you posted on this deal.

Ask Don Trump (a billionair). Mostly REI