All Forum Posts by: Duncan Taylor

That is not the case if you are truly 'self insuring' and not just dropping the coverage to save the premium.

My partners and I started self-insuring in 1987. We setup an entity to collect the equivalent of the premiums on each property and pooled them in a fund. Since we owned the fund, we were able to invest it and get a decent return on the money held. We then purchased reinsurance coverage on the secondary insurance market to limit our exposure. Think of it as a really big deductible before your 'insurance' kicks in.

This works well if you have a large number of properties spread over a large geographical area.

Now, the really neat magic happens when your insurance pool gets large enough to start funding your investment purchases.

I'm curious, how many here are going it alone and how many are in some kind of partnership or other pooled structure?

I am not an attorney, nor do I play one on TV. However, I have provided a great standard of living to them across the planet. :)

Having said that, even if she were the successful bidder at 220K, you can bet every single one of the 130K she 'saves' they will file for a deficiency judgement FAR in excess of the 130K. All those 'misplaced' fees and penalties have to be accounted for somehow you know. Even if they can't get or perfect the judgement they will send a 1099 as extra income to her and she will have to pay income taxes on it.

An order from a Federal bankruptcy judge would trump any state law and absolutely would stop the sale or reverse it if it was allowed to proceed.

As for the junior liens, I can't imagine the lien holders not petitioning the courts alleging fraud in the transaction. They might not get the lien reattached to the property but they certainly could sue and would most likely win under the fraud statutes.

Unless those comps came from your own due diligence you can't trust them.

The games played with 'published' comps in commercial and multi-family properties are legend.

That makes sense. I will readily admit I have never operated in this brave new world where people are trying to hang on to houses like that. But, I'd bet there are still ways to halt process right up to the moment when the auctioneer says, "SOLD!" Whether the lender wanted to play or not.

First, ask for a summary of the financials on the duplex. Make sure it includes income and expenses for at least the last two years. Do not rely on what the agent entered in the MLS or printed on the flyers since they are specifically allowed to lie to you, whether intentional or not, and you have no recourse if you rely on the agents statements or representations. It is very much a buyer beware situation no matter what an agent or broker will tell you.

In almost every state, the real estate agent, by law, represents the seller if they receive ANY of their compensation from the sales commission the seller pays.

From the financials you can make an educated offer. But, make that offer subject to full verification of the financial data and ANY OTHER MATERIAL FACT offered by the owner and agent.

Document the financials as presented and all material facts in an addendum to the contract.

Since you mentioned a trustee, I am assuming you are talking about this in a Trust Deed state.

Of course there are ways you could do this.

But, why in the world would you want to do this?

Just pay it off before it goes to auction and avoid having the foreclosure on your credit record.

The 50% rule and the 2% rule have been proven time and time again to be great indicators of the strength of residential real estate investments when spread over a large data set.

Using either or both of them as a go/no-go trigger on any individual investment only makes sense when you do not have the assets to truly rehabilitate a poorly performing property.

Some of the best investments my partners and I ever made violated one or both of these "rules" when we initially made them.

Equating a welfare handout to keeping one's own money rather than paying it in taxes is a false analogy but it is EXACTLY the view our current federal government takes!

The problem with any type of welfare, individual or corporate, is it is a misguided attempt to "do good." Those supporting government doing this support it because they don't trust YOU, the individual, to do what they think is the right thing. Rather than leading by example, they want to force by legislation.

The Great Society and the War on Poverty started in the 60's under the Johnson administration has not reduced poverty in this country at all. Don't believe me, check out the data on poverty from the Census Bureau.

As for the Section 8 program, as another poster here pointed out, it has artificially increased housing prices by creating an artificial increase in demand. The fact this thread started out with the question of what would happen if the program went away is a solid indicator of the artificial increase it creates.

There is no real point in debating the value, fairness or morality of the Section 8 program. It is here to stay because we long ago moved away from being a Constitutional Republic and are now, firmly, a Socialist Democracy.

But, ask yourself one basic question...

What did the Section 8 tenants do before the program existed?