All Forum Posts by: Bob Floss II

@Isaac Black Put it under contract, get the payoff from the foreclosure attorney, schedule closing asap.

@Jay Hinrichs @Johannes Gilbertson Florida has a strange bankruptcy code that allows several exemptions. It allows for a person filing bankruptcy to exempt their personal residence regardless of its value. 

However, even if he does file bankruptcy, it won't make a huge difference. Bankruptcy doesn't allow protections for illegal or fraudulent activity. If convicted, all of his assets will be available if there are not sufficient assets to cover investors. The issue with Madoff was allowing enough assets to flow into the different cases.  They needed to allow some money to go through the bankruptcy proceedings, some to be made available for criminal penalties, and some available for civil penalties. I don't know if the trustee will try to use capital to finish the properties to get maximum value. Their job is to come in a liquidate as much as they can so they can put money back in investors pockets. 

In reviewing the Madoff case, it also took 10 years before payoffs were made to investors because the case was so complicated. I don't expect that here, but investors should be aware that any settlements and payouts may require a long wait.

@Ryan Marker You have several factors going against you. Slim profit margin, any repairs costs have you going negative, upcoming vacancy costs will have you coming out of pocket, and the asset isn't appreciating in a way that will generate profit. I would recommend selling it.

@Mark Whittlesey The properties cannot be sold or refinanced because the City of Chicago will record a lien or lis pendens on the property to make all parties aware that there are building code violations. A large number of their buildings have pending violation cases in the circuit court and the case and lien will remain open indefinitely. Unless you are borrowing funds for the purpose of rehabbing the property and clearing off the violations, underwriters will kick out the file. If you take money from investors to fix the property and clear the violations, and then don't use the funds for actual repairs, which is what I believe happened, you create a downward spiral. Any buyer is going to want a steep discount for inheriting a property with a pending violation case, putting them at a loss. Although based on the information released, they probably could not sell any properties or risk exposing the over leveraged debt on each building.

@Joshua D. Sounds like you need to do some debt restructuring. The most successful real estate investors I work with make shopping for cheap money a religion. You have more than 10 houses so you should be able to shop around for a nice loan on your portfolio that will consolidate your debt into low interest payment. Based on the numbers you presented, you should also be able to pull out some equity and keep the properties cash flowing. It will allow you to pay off your line of credit and start making draws for new projects. You can use the equity you pull out of the existing properties to help out with paying bills. 

On a personal note, as a small business owner, whenever my wife is feeling neglected or I'm not contributing, I've found planning and paying for a vacation for the two of us fixes the problem.

@Deepak Kumar It's near to impossible to find a good property management company that will work in Austin. The amount of work it takes to collect rent isn't worth whatever they are getting paid. 

What type of property are you trying to buy?

@Skyler Mckinney Try a few different banks before writing it off. Some banks have very strict lending requirements and they wouldn't be interested in this type of loan.

@William Musto I tend to be the one asking a lot of questions at initial meetings. Tell him or her what you are trying to do and they should start asking questions to fill in the blanks. If they are just nodding their head and agreeing they may not know real estate well.

@Branden Sewell Are you holding the property or flipping it? Get an attorney so they can explain the contract and closing costs.

Is there a reason you can't sit down and resign the loan package at the title company and get it done? 

I agree with the comments above, I've never heard of a title company only allowing certain notaries. It's possible something about your deal raised a red flag in underwriting and they don't want to accept your docs. I've walked into a closing with a pre-signed loan package before and didn't have a problem.