I’ve been in contact with the hard money lender for my Dallas property. I told him I have this buyer from New York City but he is taking a while to close. We have escrow open but I still don’t have a closing date from him! The auction is coming up on November 7th so I have only a few days left.
So I asked the lender if I can deed the property to him instead of going through foreclosure. After a little bit of email conversation and checking my title, the lender agreed!
The lender assured me that by doing deed in lieu of foreclosure there is NOT going to be any foreclosure on my credit. And they haven’t yet reported to the credit bureaus about my late payments either. Wow, that’s great! My wife will be happy!
Here is the entire conversation with the lender. Enjoy:
August 14th, 2006
HARD MONEY LENDER:
Mr. Serin,
Without a response describing the method of correcting your last payment NSF this will be turned over to legal tomorrow.
When I get this email, I contact the lender’s assistant and tell her that I got over-leveraged and need a little bit more time. After some time passes, I am asked for the payment again. Then I decide to be upfront about my situation and start talking directly with the lender by email:
September 14th, 2006
CASEY:
I’m very sorry about not being able to make payments on the Anglridge Dallas property… I’m making every effort I can to sell this thing quickly. I have it listed plus I’m working with an investor (wholesaler) who is trying to find me a buyer. His name is [wholesaler] and may be calling you or the attorneys. I also have [NYC investor] who may call you.
Again, sorry about all this and thank you for taking a chance on me. I made some bad moves and now in trouble. I’m facing foreclosure on 5 houses in 4 states. If you care to read the story here it is: www.IamFacingForeclosure.com
HARD MONEY LENDER:
Read it already. Sorry for your troubles and I will consider a deed-in-lieu if there are no unpaid bills or liens however I will not pay you for the deed.
CASEY:
thank you for your deed-in-lieu offer. I will try to sell it a little bit longer and if nothing else works I will turn it over. If that’s the route I will need to go, what do I need to do? Tell me my next step so that I’m ready to act. Thanks.
HARD MONEY LENDER:
I hope you sell it and recoup some of your equity however if that doesn’t work then contact me. I’ll get the papers drawn up.
Good Luck.
At this time I am dealing with a wholesaler who tied up my property and was trying to sell (assign) the contract to another investors. He tries hard but is that able come through in time. So then I start dealing with the NYC investor. We have a few set-backs and have to overcome some obstacles but then I get a green light and the buyer opens escrow. The contract calls for a 10 days close but we’re now way past that. I still don’t have a close date and keep getting the “we’re working on it” response from the buyer. Then I get The Letter.
October 25th, 2006
CASEY:
I just opened the Notice of Trustee today. Looks like the Angleridge Dallas property is going to be up for sale on November 7th.
I’m currently in escrow with [NYC investor], the cash buyer out of New York City. I’m not sure when he is going to close but everything is still going forward. He said it should happen pretty soon. I will be forwarding him a copy of the NOT so that he can hurry up.
Is there any chance we can delay the Trustee Sale?
Also, if this buyer backs out, I have another one who wants to buy it for the amount of the payoff. However, that is going to be a whole new escrow and I will need some time for that.
Let me know what you’re willing to do.
Also what about just doing a deed-in-lieu like we talked about? Would you go for that instead of the trustee sale?
Let me know… Thanks.
HARD MONEY LENDER:
Casey,
The sale can not be postponed w/o a very good reason, i.e. payoff. If you can have the closing company and [NYC investor] contact [Lender’s Foreclosure Attorney] then he can evaluate the potential contract/sale.
CASEY:
Would you be willing to do a deed-in-lieu?
HARD MONEY LENDER:
Why?
CASEY:
I want to find a way to prevent my wife’s name from being tarnished by a foreclosure… We’re both on this loan. How can I avoid it? Will you accept the deed-in-lieu of foreclosure with no foreclosure mark on her record?
HARD MONEY LENDER:
How many liens are on the property after [our lien]? There is no buyer is there?
CASEY:
Just [your lien].. Nobody else.
HARD MONEY LENDER:
We’ll check title tomorrow.
CASEY:
Thank you very much! If you can help me avoid foreclosure and do not report any lates on my wife’s credit that would be the best!
And if you want, I can send you some traffic to your site so you can get more business.
My blog is receiving some national exposure - I was in the USA Today and other main stream media.
Anybody who helps me out of my mess will receive a favorable mention and free traffic. Its win-win.
If you prefer, I can of course, not say anything and keep [Lender name] completely private.
Whatever I can do to help…
A couple of days later… October 27th, 2006
HARD MONEY LENDER:
Send us the deed-in-lieu.
CASEY:
1) I’ve never done a deed-in-lieu… How do I put one together?
2) Can we agree that nothing will be reported on my or my wife’s credit (lates payments, foreclosure, etc). That’s all I’m worried about.
Thanks
HARD MONEY LENDER:
1) Attached. Change the notary notation to wherever you are, you are the Grantor, fill it in exactly as you took title. Get at least 1 witness to sign it preferably your wife & 1 other.
2) Agreed
CASEY:
Thanks… I’ll get right on it.
Have you already reported the late payments to the credit report companies?
HARD MONEY LENDER:
No.
—
Isn’t that great?
Being able to talk to your lender by email like that. I really like dealing with small hard money (or private money) lenders! So much easier then big conventional lenders - with layers of management and all the red tape. Of course the hard money lender only loans up to 65-70% Loan-to-Value. That’s why I didn’t use more hard money on my deals - I didn’t have anything to put down and I wasn’t getting my deals cheap enough to get into hard money with no money down.
So the question is…
To Deed or Not to Deed?
I really want my NYC buyer to close because I will be getting a little bit of money out of it. I need any cash I can get to survive until I get my RE biz back up. But the NYC buyer is still not giving me a closing date. The purchase contract has expired. So I am not tied up anymore.
I do have this other buyer who wanted to pick it up from me for the pay-off amount. So I would not be getting anything out of the deal with him either. Deeding the property to the lender or selling to this other buyer will be the same result financially for me. This other buyer may also tie me up and not close. So I’m not sure if I should even bother.
Need to decide quick! My wife’s credit is at stake!
[UPDATE] As I was writing this article (yes on a Sunday!) my wife came up to me to see what i was doing on the computer. I told her about the deed-in-lieu approval and explained to her what that means about saving her credit. I told her I’m not sure if I want to proceed yet, still hoping to get a little bit of cash from NYC investor.
She says:
Are you kidding me?? On one hand you have the ability to saving my credit. On the other hand you are hoping for $3,000 from some flaky buyer who probably will not close. Stop gambling and SAVE MY CREDIT!!
She is right.
I’m leaving tomorrow night to Phoenix for Robert Kiyosaki meeting. So I better go get that deed notarized first thing in the morning morning.
94 Comments
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“Are you kidding me?? On one hand you have the ability to saving my credit. On the other hand you are hoping for $3,000 from some flaky buyer who probably will not close. Stop gambling and SAVE MY CREDIT!!”
Get er done. Don’t mess around. Good news.
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Stay in close touch with hard money lender notarized deed in hand and see if NY cash buyer will do more non-refundable earnest money. If not keep rattling the bushes until the last possible day and do deed in lieu. I am surprized that the hard money doesnt give you an extention given the national exposure and all. Even though the NY buyer is dancing he may do thepurchase for the same reason.
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“I need any cash I can get to survive until I get my RE biz back up.”
You still want to be in the RE biz?
I am truly, deeply, madly in awe of your blind optimism. -
Casey GIVE THEM THE DEED IN LIEU TODAY. Like RIGHT NOW!!!
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“I need any cash I can get to survive until I get my RE biz back up.”
What RE biz? Can you truly look yourself in the mirror and say you were conducting business? All you did was blow a bunch of other peoples money and make a huge mess. From your first step you did nothing but make mistakes. You weren’t even incorporated or keeping books, and you committed fraud. How in the world can you say you were in business? You were just playing, pretending and the end result is ruined credit(good luck with biz going forward), negative net worth, and a bunch of hassles to waste time on.
You should concentrate on getting real before you think about doing any biz.
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Congratulations! See you have scored (considering the circumstances) a best case option. Nice job! The only thing I would be worried about is the fact these people will see your site and think you are desperate to sell. That could factor in right?
Im not so sure about immediatly jumping back into the RE biz though (assuming you can still get in). Perhaps it might be best to wait? Then go back? Also the market is falling. I just read a personal story on the internet about Japan. Their maket has been falling since the end of the 1991 bubble. Sounds like history might be repeating itself except in the US.
I know what its like to want to jump back in after a big loss.
2 years ago lost my life savings in spot currancy speculating ( www.forex.com ). I was too eager to jump back in after a big loss. I let my emotions get the better of me. I should have waited. I would have made money in the GBP if only I had been patient. I had stalked the trade for months.However now it will wait even longer before I get back. I’m not sure if I wanna risk it.
Just a thought..
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Casey, why not admit that your approach to real estate investing was like a gambler, not an investor.
The rest of the readers of your blog see this to be true. If you were as honest as you claim, you would at least try to answer this.
If your mentality about investing doesn’t change, you are bound to repeat the same mistakes.
Besides, the Robert Kiyosaki brigade are following a cult. If you do honest research about him, you will find that much of what he said in rich dad poor dad book was fabricated. Further, he admits that the books are not technical manuals, in that they don’t contain hard information about how to invest. Rather, they contain words to motivate the easily impressed, that’s their true purpose.
Like I mentioned earlier in your blog, you would be better off taking a couple of finance courses, and then real estate finance, and perhaps some accounting courses. You could sharpen your mind, become more analytical, and reduce the odds of falling back into a gambling mentality.
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You’re broke so you figure, why not rack up more credit card debt and fly to Phoenix. Wow, just, wow.
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Seems to me that Mr. “NYC” buyer is stringing you along…
Been there, done that. Perhaps Mr. “NYC” is greedy, and waiting for another shoe to drop, to see what further advantage he can take.
Wouldn’t it be wiser to get the “deed-in-leiu” settled a.s.a.p.?
The bank is saying “yes” to you today; giving you what you asked for; no negative reporting to your credit and a clean slate in regard to their loan.
But Mr. “NYC” is saying nothing…
I’d go with the “yes” because the short AND long-term benefits outweigh some vague negotiations with a flakey/greedy “buyer” (read here as “flake” or “vulture”) somewhere back East.
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I noticed someone placed a bid on the ebid site. What does that mean exactly? What are they bidding on? Will that muddy the waters on the Dallas property?
I’m just wondering what the bid is actually for since you don’t list an actual property on the site, you just mention that you have “several properties.” Is the bidder supposed to be of the opinion that they are bidding on one or all of them?
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Casey,
This is sort of like “Deal or No Deal.” You could have the buyer pull through in a remaining unopened case, or you could have nothing.
Take the deed in lieu deal. This is a bad mortgage for you and the property itself has been a problem.
Take the deal.
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Michael:
You lost your life savings on spot currencies?!
Guess you didn’t read this in the Forex customer agreement:
“Customer is willing and able, financially and otherwise, to assume the risks of Foreign Exchange Trading and that loss of Customer’s entire Account Balance will not change Customer’s life style.”
I think they had “life savings” in mind when they wrote that.
Oh, and this…
“Customer represents and warrants to Forex.com and agrees for the benefit of Forex.com that if Customer is a natural person, Customer is of sound mind”
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I know of several people that are doing it to their lender. Its also called Jingle mail. The bank quietly will attempt to flip it as a non foreclosure. They usually lose, but by quite a bit less than if they had to actually foreclose cos the foreclosures net a lot less and they are sitting idle for a lot longer. You got lucky on this one, hard money is usually hard for a reason.
Cool.
Cow_tipping -
Fantastic news. When you get a little cash, buy another property that you can flip at a good price, and you are soon on track back into the real estate business and a fortune. I am so happy for you, and know you will soon realize this experience was just a blip in a successful strategy of retiring weathy and early. RK was so right.
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Free Advice.
Lol! Yes I read it. They have to put those statements on there to protect themselves. They also make you sign it when you open your first account. Yes I lost my then life savings. I wanted to buy real estate (that would have been a smart idea) but none of the banks would give me a loan because of my stupid credit score.
I was not of sound mind afterwards. That’s for sure. But I got over it. It taught me how to trade and also that I could stand losing money. Losing my life savings over 2 years was tough. Especially when you actually saved to earn it. I’m a little trigger shy about going back to forex. I’m going to wait then maybe trade some minis and learn to be more patient etc. Emotions are your biggest nightmare/enemy in currency trading. Clicking into a bad trade and watching yourself lose $100 a second isn’t very fun.
I admit the idea of being a day trader is somewhat appealing though. There are actually people that make a living clicking and trading currencies. It’s a very stressful full time and risky occupation though. 95% fail after 1 year (liquidated). I lasted just over 2 years though. So come on give me a little credit would ya? You see - they give you 200/1 margin leverage. I am very knowledgeable about Forex. I spent $4000 on educational materials.
My loses were because I broke my own trading rules and went against my own intuition and better judgment on leveraged big trades.
Wins include:
Made $12000+ over 3 days when the French voted “noy” on the EU constitution and the Euro plummeted. Then I had over 3 million+ in leverage so I immediately decided to bet it all against the Pound (GBP). You see my foolish behavior and being emotional killed it. Look how much money I made! All the education and hard work paid off! I’m officially a currency trader. And I own 2 businesses. Hmm maybe I’ll quit my profession and start full time today. Hmmmm Look at this pound. It’s pretty high. Almost 2 to 1. It can’t go up against the greenback anymore. Who needs planning, technical research and news announcements anyways? I’m a professional now. Soros here I come. That was my #1 mistake. I should have taken a long hard look at myself and my next move and played things more conservatively.
Maybe you should check it out. You can get a mini account for $250.00….8)
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Casey,
How’s the “9-to-5″ job coming along? You haven’t written about it since you started.
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“get my RE biz back up.”
I’ve been telling you this all along Casey. Get your RE biz back up, so you can get $4,000,000 in debt and double your negative cash flow. You need get more in your pipe line. Six houses in foreclosure are not enough for the greatest liar in RE “investing”, Casey Serin.
I like the way you asked the HM Lender to take DIL and then rather than getting it signed and to him as soon as possible you start thinking of ways to do something else. That’s great. Go back on what you agreed to do, and string the HML out longer so his association with you will cost him even more $ and then maybe he will whack you credit too.
Your foolish optimism and willingness to go back on your word is priceless.
Your brain is permanently drunk on Real Estate Guru Kool-aid. I don’t know if we can salvage you Casey. -
Do the deal.
As far as you know, the NY investor might have forclosure problems of his own.
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You’ll keep the deed-in-lieu in your pocket for your Phoenix trip, to show it to RK, lol….. Then the hard-money lender will lose patience and you’ll be foreclosed next Tuesday.
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Casey —
Have you checked your credit lately? It’d be interesting to see where it is (especially compared to where it was, if you know).
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dude
of course the HM lender took the Deed ILO,
they saved a ton of paperwork, and got you
to surrender 30% of your equity.COngrats you just gave your banker 50K or so.
Now, if you had rented out all your properties
and had a day job, then you would be working like
a dog, but owning it all.consider this a lesson learned.
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Casey,
Take dcguy’s advice and rent them all out for a huge negative cash flow and get foreclosed rather give the Deed ILOF.
Maybe dcguy and you could partner up. The two of you would go about it different ways, but it sounds like you both know how to loose money. -
[…] For how long? […]
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Casey, you had better do the deed-in-lieu TODAY. Seriously man, I found a $100 bill on the sidewalk once, and this is that kind of moment. SAVE YOURSELF.
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Oh, and please explain the myebid auction. We’re all dying to know how you plan to pull that off.
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I’m curious Casey…
If you did go with the NYC investor, and got $3,000 out of the deal, how would you spend the money?
That wouldn’t even cover one month of your credit card bills!
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The eBid Auction is not mine. I must say its pretty creative. Somebody is trying to make money from my situation. I think it was this guy. Does anybody have a way to verify it?
@Jeff: The 9-5 thing has been going somewhat good. I have been getting to the office at 9am this last week and has been leaving at 5. That has been giving me some balance. However, I’ve caught myself doing more comment moderation and blogging this week then I wanted to. I spilled over the 2hr/day a little bit and I had to do some on Saturday and Sunday. I really want to keep this thing going. So much is happening lately that I’m trying to figure out what to write for my daily post. That USA Today article and NPR also brought in a flood of email that I’m STILL trying to go through. I’m down to under 200 email in my email box. Need to get through the rest of it soon. Many interesting opportunities have been coming my way. So back to your question. The 9-5 is a good boundary to strive for. So that work doesn’t take over my life.
@Rudy: I will be running my credit report this week and will report on it soon…
@mejustme: who says you need credit to buy houses? The Hard Money Lender on this Dallas deal didn’t care about my credit.
@Abigail: The 3K would have gone to allow us to live for another month until I get some other opportunities / RE deals going.
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Deeds in lieu are not “get out of jail free” cards.
You could, for instance, sign a deed in lieu and still owe ever last dollar you borrowed. I wouldn’t run out and sign some hard money lender’s standard deed in lieu without first running it by my attorney.
Deeds in lieu are negotiated. Your hard money lender is familiar with this, having mentioned that he will not pay you for it. Fine, but what will he do?
I suspect you could ask for considerations that guarantee your credit is impacted in the very least, among other things (one being released from any possible deficiency when the property is sold and the sales amount doesn’t cover what you borrowed).
Slow down, be smart, play the game. Be quick but don’t hurry (John Wooden). You appear to be in a big hurry.
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Casey, gambling psychology. Casey, gambling psychology.
What is probably going to happen is that the author of rich dad, poor dad will find a way to bail you out. Mark my words.
This blog wasn’t started with the intention to be a viral marketing campaign for that author, but the end result is that it will be.
Much like “savekaryn” or whatever that site was called where some bimbo juiced some fools to pay off her credit cards, Mr. Rich Dad Poor Dad will find a way to bail you out and use it as evidence that his methodology works.
So, your intent with this blog was to attract enough attention for a hail mary pass, a bailout, almost coming from the heavens.
A bailout you will likely receive, and kudos to you for creating a format to allow it to happen.
But, that will not change your gambler’s approach to the real estate biz, and I fear that once bailed out you are likely to repeat the same mistakes.
But, even if it doesn’t matter, good luck.
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Casey,
Glad to hear about the deed-in-lieu. Even though I don’t admire your situation, I can appreciate the fact that you have actually took a leap of faith with REI. I have been studying for about a year and have yet to get off the couch and make a deal. if there is one thing I have learned it is “Without risk there is no reward”. I see all the negativity people leave and I think that they will be working a dead end job for the next 40 years. REI is about getting more out of life.
Life is too short to be sitting on the sidelines.
Rock On!
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Man, I suggest you do a Deed in Lieu way long time ago, you do it & I don’t even get a thanks!? Sheesh…
Don’t I get a commission, or something?
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Enjoy your visit to Phoenix.
I am a realtor in Phoenix and Mr Kiyosaki lives in the area that I farm. He has some good ideas. Let us know what he says. I have been interested in setting up a real estate relationship with him or his associates. Phoenix is a great market to invest in and I would love to hear what he thinks about the market in general. -
1. You are still going to jail
2. You dodged one bullet..think you can dodge them all Neo? -
Casey,
Credit bureaus go into public record to put negitive info on your credit reprots(i.e. Tax leins, judgements). When Texas filed a Notice of defalt, it is in the public record and the 3 bureaus might put it on your credit report. You might want to investigate.
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I am very interested to know how much you have made from the advertisements on your site. I think it is relevant to this blog.
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Casey wrote: “@mejustme: who says you need credit to buy houses? The Hard Money Lender on this Dallas deal didn’t care about my credit.”
Yeah, and that worked out just fine, didn’t it? You feel pretty triumphant giving him the deed to the house? (Yes, it’s the right thing to do, but it’s not like you’re ahead! It’s no way to run a “RE business”!) Wake up and smell the cat litter, Casey!
You’re going to keep borrowing money at 14%, probably higher next time? Are you familiar with the definition of insanity (doing the same thing over and over and expecting a different result)?
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Casey dude, I wouldn’t sweat it. You’re gonna be a millionaire! Git ‘er done!
Someone will buy these properties off you someday and give you a ton of money. Just like that. In America everyone just gives out free money. That’s how it works, you hold out your hand and say, “Gimme some money, I made a mistake” and people fall all over themselves trying to give you their money.
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I sure hope your hard money lender is licensed to practice law in Texas, because by drawing up a Deed in Lieu of Foreclosure and providing it to you, he is practicing law, and doing so without a license is punishable in Texas. I would STRONGLY recommend that you do not sign that deed without first taking it to a RE lawyer in Texas to look over and approve.
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Am I the only one who finds it just slightly ironic that Casey is flying to a city called ‘Phoenix,’ where his new real-estate empire will no doubt be re-born from the ashes of the old one.
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Anon,
Are you the real life Cliff Claven from the TV series Cheers? -
Comments = not so interesting today. How unfortunate.
Thanks to those readers for visiting my blog the other day, much appreciated. Hopefully Robert T. Allen proved amusing to you.
NG
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Brock,
So when two individuals enter a contract between themselves, they need an attorney to draw up the contract.
You have an interesting definition of “practicing law”. -
Legion-
If he is “going to jail” then what about all the other 10 million+ people that have done the same thing? The Mortgage Brokers? The Realtors? For goodness sakes the appraisers who are OWNED by the brokers?
This goes alot farther than with just one person.
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And one more boast about the size of various gentlemen’s “earnings” (ha ha, a clever and classic euphemism)…
Isn’t this a meta-euphemism ?
Anon is pure gold, as usual.
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Michael -
“Legion-
If he is “going to jail” then what about all the other 10 million+ people that have done the same thing? The Mortgage Brokers? The Realtors? For goodness sakes the appraisers who are OWNED by the brokers?
This goes alot farther than with just one person. ”
I agree, but then again, of those 10 million plus people, whom do YOU know by name because they made a blog about it and got as much media exposure as possible? LAwyers, prosecutors and lenders will all try to make a big splash and pick out the one guy whom everyone has heard about. Limited resources means go after the biggest fish..and Casey thanks to his publicity genius has perhaps made himself TOO big a fish.
He’s gonna fry like one too…
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Brock:
Anyone can draft a legal document. I draft binding contracts all the time. They’re simple, but they’re legal. Heck, even prisoners draft legal petitions.
Deeding someone property is actually rather simple. There are various forms of deeds, of course, but they’re usually 1-2 pagers. The only complex part here is the name. As you’ll see in the email exchange between Casey and his lender, when you deed property, it’s important to use the same name that was used when you were granted the deed in the first place.
That being said, anything complicated should certainly be reviewed by an attorney.
Oh, by the way, Casey, if it were me, I’d be happy to get my note back, but I’d personally verify that the deed was actually RECORDED.
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Apparently you have found the only lender in America that will not report a voluntary foreclosure. That’s how it will be listed on your credit. You need to start asking some above board people for advise- real estate agents, lawyers, accountants, etc… so you don’t get in deeper than you already are. You will not wake up tomorrow and everything will be alright. You have a hard ten years ahead of you.
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Amazing to read your story. I am captivated by it. I too have had this obsessive compulsive desire to become wealthy and got caught up in the hype of the time when I too crashed and burned. It was not pretty…but I live to tell. It not a pleasant situation to start with good intentions only to find yourself in a hole so deep that there is nothing that can bail you out.
I think the lesson that should be taken away for all it to check your emotions and your ability to reason when you are feeling like you need to get it NOW!!! If you cannot pace yourself then you are withnessing an internal problem and you need to seek help immediately. I think you may have a condition that is similar to other addictions…you can’t stop when you see that it’s create a mess in your life…that is clearly what you’ve done. Create a big mess. I must add that you did not use much of that intelligence of yours.
We’ll that is obvioius and also exactly what an addict does. Acts in spite of the obvious signs. Good luck. I think you’ll be fine but you have amazing wreckage of the past to deal with first.
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Casey - You are a genius.
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Casey:
There are tons of posts on your site by now, so I’m sure you won’t get to this one until the new year. On the off chance that you happen to read this, I’m going to give you some advice.
Authors & Seminars
Every course about becoming rich overnight and every book about doing so is written for one purpose and one purpose only, to make the author rich. These folks have made a living promising riches and the good life with little or no effort. You may have figured it out by now, but I think it’s important that someone spelled it out for you.
Real Estate Business
The market has seriously softened. I’m sure there are some opportunities in the real estate market, but those opportunities are going to exist primarily to long term investors. The opportunities available to short term investors are going to be extremely limited. If you are going to focus on bringing buyers to properties for a commission, you should consider getting your real estate license as the states that you are operating in probably require you to do so based on some of the activities you are describing.
Accounting
Get ready to pay taxes on any of those small gains are ordinary income tax rates and be prepared to lose out on most of your travel deductions. Also, if you are going to declare bankruptcy, talk to an attorney in your State long before you do it. You may not be able to discharge any federal income taxes owed.
Money Making
I read your story and thought it very interesting. You should consider capitalizing on your real estate failures by writing a book or producing a seminar or something to supplement your income to pay off your debt.
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Just curious,
How much have you received via the Tip Jar?
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Will Casey go to jail?
I doubt it.
Prosecutors allocate limited resources as follows:
1) The police charge someone. After all, while a prosecutor MAY have his/her own investigative resources, they’re limited. They’d rather the police do that work. That only happens if someone walks into the police station and swears out a complaint. That’s first priority because if you don’t prosecute enough of the cases people care about, then you don’t keep your job.
2) Cases where no police complaint has been filed, but someone complains. This isn’t rare, but it’s not like it’s that common either. Prosecutors are often under pressure to charge someone on their own, but here’s the important part. SOMEONE HAS TO COMPLAIN! Not just anyone, the offended party. Cases need witnesses — not just blog entries. I suspect that most of Casey’s lenders would rather not bother. It’s expensive to go testify and tends to bring heavy regulatory scrutiny and external audits.
3) Cases with no police complaint and no cooperating witnesses. If the lenders don’t cooperate, sure the prosecutor could investigate and get a warrant. It may happen on “Law & Order,” but it’s expensive and the reward isn’t there. Witnesses who require a subpoena to appear aren’t usually that cooperative or convincing to a jury. Remember, you’re talking about a criminal case. The defendant can choose a jury trial. All it takes is one juror to who’s not sure because of Casey’s “gosh, I didn’t know” testimony and bingo — not guilty.
So if Casey’s lenders aren’t interested, this case is pretty dicey and is a plead out at worst.
There is one exception, of course. Many states have fraud divisions that investigate these types of cases specifically. They have the experience in financial matters that prosecutors don’t have and can turn reluctant witnesses into convincing ones.
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This is going to take some time to undo. I like readling about your desire to succeed, win, achieve wealth, etc. In fact, I can tell that you actually were working towards you loft goals of riches unlike many who buy books, tapes, seminars, never do anything and blame the world for their failings.
You on the other hand dove in head first. Clearly, too unchecked for your own good and have created a large mess for yourself and those around you. I hope that you do not lose your enthusiasm as you cope and deal with this trainwreck. That vigor that you possess can actually be very useful in the future once tamed with the years of wisdom you undoubtedly will gain.
No man in an island. I would recommend following some advise, get rid of all properties, let the financial chips fall where they may, take some time from the real estate market and regroup. As long as you have life, you’ll have other chances.
By the way, with regard to the mentor group with Rich Dad, doesn’t that cost money to be a part of?
I’ll be watching.
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Pity you didn’t check out our web site BEFORE you started your real estate career.
It’s filled with tons of FREE information to help newbie real estate investors. And we DON’T sell books courses, tapes or seminars.I have already made my own fortune in real estate and financing and am now semi-retired with REAL money in the bank.
We warn about almost every mistake you have made. We even have a free spreadsheet to help evaluate the profitability of potential flippers.
http://www.mortgage-investments.com
Norman Linton
P.S. A note to the guy who lost his life savings in forex.
Didn’t you realize it is a zero sum game? If it was that easy to predict the movements of foreign currencies, people with their fingers on the pulse of the economy, with Harvard MBAs and tons of money to play with would be cleaning up. -
Just say your article on AOL. I must say, you have quickly become the face for the abuses that have transpired in the industry. You will end up being of great service to many as the industry has a blinding light shone on it. I believe you have been taken advantage of as well as you taking advantage of what was put before you.
I’m very interested in hearing the latest.
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Hard money lenders going down the tubes…
Washington Mutual To Cut Out Free Electricity for Employees
Hope you’re proud of yourself, Casey.
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The think that is clearly missing is your truly taking responsibility. It wasn’t that you made all these “mistakes” listed, it’s that you got GREEDY. There are plenty of us that do not own any property because we had the intelligence to see that we couldn’t afford it. I’m rather disgusted that you pretend to claim it’s your own fault, yet it’s a poor me and evil lenders story. Grow up, take some responsibility, and acknowledge, that’s what happens when you are driven by greed and need to show flash
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Legion.
That makes sense. I see how the government picks out one person. They do this all the time. However I don’t know…
He’s a good “poster boy” for everything that is wrong with the RE biz (as far as the ease of lending and leverage) is concerned. Yes. But I don’t know about the fried fish. More like slippery fish I think.
Sort of like that teacher… (I think? sp). She was given a free pass by the jury? Lawyers famous words were “putting here in prison is like raw meat to the lions (lions mean prisoners)” or something like that? If it ever got that far I think something sort of like that would happen. No way he goes to jail. He’s just too nice a guy.
These means of lending are given to everyone. Income only loan application = Mattress tags as far as I’m concerned. He’s just a young entrepreneur that wanted to start his own RE biz. Buy a bunch of fixers, fix them up, and sell them at a profit. How could you fault someone for wanting to do that that? Now if he were fat and fugly with a criminal record, then that would be a little different..
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A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.
At the time of this writing, foreclosures are at an all time high, which basically translates into more opportunities for you. Since foreclosures are increasing, this is the perfect time to jump into this because there will be more and more lenders discounting properties. It is safe to say that most lenders will accept a short sale, however, you may come across one or two lenders who will not discount. If the numbers work out for the lender they will do it.
It is best to do a short sale when the property is in the pre-foreclosure state. Yes, you can perform a short sale when the bank owns the property, however your profits will more than likely be smaller. There are two stages within pre-foreclosure. The first stage being those individuals who are behind on payments and the second stage are those who are behind on payments with a notice of default. In order for this to work properly and for you to successfully get a short sale, you must find the homeowners who are in the second stage of pre-foreclosure or more than 3 payments behind on their mortgage. Once the notice of default has been recorded, banks become motivated as well, so you are more likely to get a discount. Until that time, very rarely will a bank ever discount a mortgage that soon. Why would they? The homeowners still have time to cure the loan and make up the back payments.
It does not matter what type of house or condition it’s in, all mortgages can be discounted. The best properties to perform a short sale on are the houses that need lots of work and repairs because lenders will give you a bigger discount if they see they are “don’t wanters”. Properties that are over leveraged are also prime candidates. Most rookie investors who see a house over leveraged with an upside-down mortgage may think there is no hope for this property. On the other hand, this is a sweet deal to the savvy investor. Properties with large 2nd mortgages are also treated as gold because the 2nd mortgage is wiped out at the foreclosure auction. Lenders with a 2nd and 3rd mortgage position would rather have something than nothing.
Short Sales are one of the most effective techniques for discounting loans in real estate. Short sales create huge investment opportunities and are a must if you want to be competitive in this market. One of the most important steps in the short sales process is getting the deed. Too many times, beginning investors will skip this vital step. Why do we want to get the deed from the homeowner(s)? Because all too often, homeowners change their minds, or want to back out of deals because they are scared, or they want to re-negotiate. Without the deed, they can back out of the potential short sale even after you have spent hours working on their property. This only has to happen once and I guarantee it will never happen again. I lost $30,000 on one deal because I failed to get the deed. That was a costly mistake. When the homeowner signs the deed over to you, now you control the property and you can go to work by calling the bank.
There is a certain process for calling the bank when your doing short sales. Banks can usually tell if you’ve never done this before. When you call the bank, you never want to tell them you are the buyer. This one of the biggest mistakes rookies make and will almost always result in the lender not accepting short sales. Therefore, when you call the lender to request the short sales packet, you want to tell them you represent the homeowner. Sometimes they may ask if you are a real estate attorney. Again, just tell them you represent the homeowners. Then you’ll want to request the “short sales packet” or “workout packet”. When the packet arrives it will explain exactly what you need to make this short sales deal successful.
The lender will usually request a hardship letter. A hardship letter is telling the lender why the homeowners are not making their mortgage payments. Sometimes they will request bank statement, pay stubs, income statements, and so on. Be prepared to send them everything they ask for because if you don’t it will not be accepted. They will almost always ask for a HUD-1 and a real estate purchase and sales agreement. Do not waste any time! Send everything the lender asks for back ASAP. It usually takes 3 weeks or more to get an answer back from the lender, so you can’t afford to wait. If the auction is approaching, you can ask to extend the auction which in most cases they will, if they know it is a legitimate offer.
Next in the short sales process is the BPO. This stands for Brokers Price Opinion. Basically a real estate agent will come out and give their opinion on what the house is worth. The key to short sales is the BPO. You want to try everything you can to influence the BPO to come in as low as you can. The lower the better. It takes a few times to get good at this, but once you do, I guarantee you will try to get short sales on every real estate foreclosure you encounter. You will also receive larger profits when you invest in a more expensive home. This is because you are able to get bigger discounts from the lender on properties over $500,000. The great thing about this is that it will cost you about the same no matter what the property is worth.
Brigid Lenderborg - WhyRent.net - 786-356-4187
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If I were doing business, I’d watch this blog and know my hand pretty accurately. Then I’d take you for everything. If that means pulling some strings so you have your old lady’s name to fall back on, I’d play ball. Just so long as I tear yours off. I even get to know if there’s a darkhorse, cuz here’s all the details. Of course I wouldn’t let on that I’m paying attention. But you throw that many digits down and you pay a lot of attention, or you don’t last. Like our hero Casey here.
You shouldn’t NSF. Don’t hit anyone with an NSF. You gave them a bad impression if you really NSF’ed, rather than providing a note to start the discussion. I’d lean on you, too. ‘Dorkoff NSF’ed me but look, Dorkoff has a web site. I don’t give a squirt about a URL. I got NSF’ed and that’s bogus.’ You don’t exactly have celebrity skin. Curb your enthusiasm and put on your business face. I dunno, just seems like you’re a bi-polar train wreck. You’re terribly young. So long as you’re selling your scrotum, I guess people play along.
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Anon,
I enjoy your prose, but your last post struck me as being very odd. Like your assessment of Casey, I would say your post also went “clank.” It was missing something. Perhaps Casey is your muse? I read many other real estate blogs, but no other anonymous comes across with your tone, or your vocabulary. The same applies to personal finance blogs.
No…no other topic inspires you as much as Casey’s plight. You’ve dismissed the thought of creating your own blog where you can wax poetic on any one of this world’s travails. Your esoteric similies make me think of you as an online Dennis Miller. Most of the time I don’t really understand the reference, but it’s set up in such a way I just know it’s funny.
So then I asked myself, “What type of person is Anon that he would singularly focus his efforts, his time and his vocabulary on poor Casey.” Lord knows I don’t have time to think about this sort of minutiae, but quickly something you mentioned from a previous post suddenly gained new meaning…
Webcams
It made me laugh uncontrollably when you posted it. But I now believe it has a more sinister meaning. It made me think of the crime documentaries I’ve seen where a caged criminal wants to help police find a deranged criminal only because of the access to crime scene photos. They live vicariously through someone else’s deeds. They relive their own past. Anon, it reminded me of Hannibal Lecter who appears wise, seemingly helpful, but only seeking personal gratification.
But Anon, you are no caged criminal. “Convicted?…no, never convicted.” Your previous post gave it away, “Then you turn out the lights and snuggle up aginst your beloved and a couple of cats for a long, cool autumn night’s sleep.” If I was like some on this board -”bubba” I’m talking to you - I would make the assertion that your “beloved” was a cell-mate you had grown particularly fond of. The cats wouldn’t fit in then…unless you were housed at the Kentucky State Penitentiary! No, that’s not it…those cats are only outside for obvious reasons.
What could make a normal person take so much glee in seeing Casey fail, yet write so well about it? This is not some psycho locked behind bars. This is a psycho locked in his own home! Yes…someone homebound. Is it agoraphobia? Someone so weak mentally, he can’t step outside his own front door to get the daily newspaper and must impose his will on poor Casey anonymously. Or are you so overweight you can’t get out of any doors? Your prose is eloquent, but your typos lead me to believe you have fat fingers. What malady, physically or emotionally does Anon possess he must tease Casey so mercilessly, so anonymously? I can only hope the world finds out someday. In the meantime, I’ll be watching you Anon…anxiously waiting for the slip up that reveals your great weakness.
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Casey,
I am sure you are greatful for some of the advice as well and tired of reliving your mistakes through the posts. I have a bit of advice and its up to you what you do with it. I have flipped four houses in the last 4 years but the difference between you and I sound like opposites. It seems you jumped right in head first without knowing how deep the water was. I actually bought the houses and even moved into them treating them as my own and going from there. I made over 300,000 dollars over that period but at that time the market was hotter than Africa. Your timing was a bit off and unfortunately as each day passes your debt is not only griowing larger but your opportunity to sell is dwindling. Unless you have a staff to keep a very close eye on what is happening down to the dollar amount for each home you are geared up for a disaster as it has already erupted.My advice to you Casey is #1 admit you are in way too deep and get rid of these properties at all cost before foreclosure or bankruptcy. This means you need to cut your losses as they continuously pile up. You must realize that at this time its sink or swim and a profit is out of the picture. The hard part now is finding a buyer who is willing to take over at cost w/out your cut or you will lose more faster than you can imagine. #2 the market is as stagnet as a Louisiana swamp in 95% of the west and as this is occurring its scaring more buyers into holding onto what they have and wait out the storm. Everyday these homes are losing value due to markets supply with very little demand (econ 101), if you believe you are a true busines man turn them over to auction, transfer or even at a desparate cry to section 8 housing that can cover mortgages if you have any equity. Otherwise forgo any and all equity you have to clear your plate and make room for a buyer. Admit your mistake was very costly but DO NOT think for a second you are are waiting on any profit.
ADVICE for the future: Do not ever buy a property in order to cover a previous property, there is no way to get rich quick without huge risks that you must have plans to face, and finally for the next 4 years do not purchase another home unless you plan on residing in it long-term. The real-estate market is becoming so bad that over 450,000 agents will have to find other employment within the next 5 years. My mom is an agent that sells over 4 million a year in Ventura County CALIF and her business is already down by 62% this year alone. Casey, If you are still enthusiastic about RE then WAIT, wait before your marriage falls apart, wait before you get in any deeper (if possible), and wait until you are wiser, smarter and more mature to know exactly how much is more than you can chew.
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The loss numbers on this fiasco are as follows: $30k down payment lost and $30k escrow for rehab lost. “Lost” means straight into the pocket of the HM lender — quite a coup for this guy. He benefits from the repairs as well as the down payment. At least Casey might be able to get a tax deduction for the minus $60k.
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Max Stein:
Love me some Anon, but I agree with your assessment about this latest post by Anon. It was a little off.
However, I think that s/he raises the bar of comments here, as most of us improve our vocabulary to match (considered using the word nadir here, but then couldn’t remember whether it meant high or low point!). So, I don’t care if s/he is not always “on.”
I think Anon is a writer by trade. An editor, a professor in the humanities or something along those lines. The writing is beautifully constructed and spare. Great transitions. Precise analogies. The mark of someone who writes every day.
Casey—can you tell that we are getting bored by your story? Write about RK, unveil the “master plan”…just get on with it already!
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Me know lick anons big werds.
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Nice post Max
I don’t really see why people are so enamored with Anon either…
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I think you should tell the HM lender to stuff the DIL - you can do much better by waiting for the NYC buyer; whenever he’s ready. At least that way you can recover some of the ‘equity’ you deserve.
This is getting old - tired of the games and manipulation…
Please get to the endgame before I lose interest and move on. Thanks!
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I have bought and profitably sold some 100 properties over the last 15 years, including a 50,000 sq.ft. office building and an 86,000 sq.ft. shopping center. (Made over $1m. cash in the bank on the last one).
This is not to impress anyone but so that you know that I DO know what I’m talking about and have “walked the walk”.The first rule is to realize that real estate is a local market, often a really local market. So buy properties you can drive to within the hour. This makes it much easier to: know values, meet potential buyers and sellers, tenants, contractors etc.
Rule two: As a rule of thumb, if you intend to flip a property you should pay 30% below fair market value.
Let me be clear here, if you buy a house for $70,000 and it will be worth $100,000 after you have spent $30,000 in repairs, you didn’t get a bargain. You paid fair market value.To more accurately analyse the deal:
http://www.mortgage-investment.....houses.htm
Rule three: NEVER try to pyramid your holdings by borrowing more money against a property you already own. Buy a property, fix it, flip it and use that money against your next deal.
Rule four: Don’t quit your day job until you are earning as much from real estate part time as you are from your day job full time.
Rule five: NEVER lie to get a loan. Don’t fudge appraisals or your income. If the deal is as good as you say it is, you will be able to find a hard money lender on our web site:
http://www.mortgage-investments.com
I am a hard money lender myself. I am constantly looking at deals where it is obvious that the comps have been carefully selected to show a higher value. Why on earth would you do this? Even if you get a loan for more than you should do, you WON’T MAKE MONEY ON THE DEAL. Because you will have PAID TOO MUCH.
Rule six: Always act with integrity. Do what you say you will do when you say you will do it. I have borrowers who have bought and sold many properties with my money. They have good credit with me.
On the other hand, there have been borrowers that have lied to me, bounced checks on me and I have ended up foreclosing. They will never do business with me again, no matter how good the deal.Rule seven: Don’t confuse an upwardly moving market with you being smart. If all prices in the area go up 20% that doesn’t make you a real estate genius when you sell, just lucky.
Rule eight: Keep some properties as long term rentals. Say one in three or one in four. That is how you build up true wealth.
Just buying, fixing and flipping is a JOB just like your day job. Not an investment.
If you can buy and keep just one property a year, you will own 10 properties in 10 years. Enough to retire on. -
Harry Fisterbottom,
I’ve been laughing for 2 straight minutes after reading your post. -
Anon is lame, and a show-off, and banal. Who can bother to read all that stuff? Way less words would be a lot funnier. His real audience is himself.
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Norman,
I agree with what you said with one exception.
“10 properties in 10 years. Enough to retire on.”I’ve purchased a property a year for 12 years. I’m still negative cash flow on my rentals. Luckily I have a very good day job. I purchased at a discount, so I do have good equity, but my retirement will have to wait for rents to go up.
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Norman:
Forex is a zero sum game? Who told you that?
Currencies are created and vaporized all the time.
You might be thinking of currency futures, but even that isn’t a zero sum game.
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@Cheers and Free Advice:
I am not a lawyer, but I do look at deeds every day as a part of my job. It seems that I was partially correct in my earlier comments. I was going by what someone else had told me, but I had not read the actual statute. I had been told that preparing a deed (an actual conveyance of title to real property, which is more than just a contract) for somebody else was unauthorized practice of law. That is correct, with the caveat that the preparer has to be compensated:
http://tlo2.tlc.state.tx.us/st.....#83.001.00
Ҥ 83.001. PROHIBITED ACTS. (a) A person, other than a
person described in Subsection (b), may not charge or receive, either directly or indirectly, any compensation for all or any part of the preparation of a legal instrument affecting title to real property, including a deed, deed of trust, note, mortgage, and transfer or release of lien.
(b) This section does not apply to:
(1) an attorney licensed in this state;
(2) a licensed real estate broker or salesperson
performing the acts of a real estate broker pursuant to Chapter 1101, Occupations Code; or
(3) a person performing acts relating to a transaction for the lease, sale, or transfer of any mineral or mining interest in real property.
(c) This section does not prevent a person from seeking reimbursement for costs incurred by the person to retain a licensed attorney to prepare an instrument.”Simple enough. Being compensated to prepare a conveyance of title is unauthorized practice of law unless you’re an attorney, licensed real estate broker, or landman. Is the hard money lender being compensated? I guess that’s where the question lies, since the statute does include indirect compensation.
In any case, relying on your lender’s assurances that the form he provided is a valid Texas deed is foolhardy. Get it approved by a Texas lawyer. Even just basing your deed on the deed in which you obtained the land is not advisable. As I said, I work with deeds every day, and it is amazing how many of them are screwed up (especially when it comes to the legal description of the property). Sometimes these errors are propagated for decades when one party simply copies the text from the previous deed.
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Brock:
Don’t know how it works there in Texas, but in California, you can do your own deed. Does Texas *require* that you have a lawyer to sell or transfer a house?
The passage you quoted refers to leases. Can I draw up my own lease for my own tenant in Texas, or am I required to hire a lawyer first?
Seems odd, but good job security for lawyers I guess.
In any event, it would seem as if Mr. Hard Money Lender would have a lot more to lose from a defective deed (unless, of course, Casey got a defective deed to begin with, in which case that’s another issue entirely).
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Status?????????
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[…] Tuesday, October 31, 2006 The hardest thing to do in this market: find good news for sellersI did find one avenue of interest for sellers though: start a blog. Casey Serin did and it helped him prevent at least one foreclosure. His blog is pretty interesting.He invested in 6 properties and got caught over-leveraged.His story sounds like a text book example of how to get caught-up in a investment craze. One of the most telling things he writes is that when he rented one of his properties he lost almost $1,000 a month. MY question: why in the heck would you buy a property that cannot be rented for at least break even. Of course Casey purchased his houses with 100 percent financing and took out all his equity to pay for improvements. # posted by James : 5:25 AM 0 comments […]
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[…] […]
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