All Forum Posts by: Nick L.

I have to rant about this somewhere and figure BPers would sympathize!

I bought a house at foreclosure auction this year. I've completed the process and have the deed. The tenant and the former owner (who apparently live together) both refuse to accept that I own it despite my deed and public records. I tried to reach a peaceful move-out agreement with them but they have been variously stalling me and belligerent. I have an eviction order pending execution by the sheriff's dept.

The former owner is a petty criminal who is trying various frauds to stall the eviction and make money off the house. The ones I know about so far are:

- Claiming the foreclosure is not valid because he filed BK the morning of the auction. I have paperwork showing he filed it months before and the property was exempted from protection.

- Claiming the foreclosure is not valid because he did not have a contract with the foreclosing bank, and is filing suit against them and me. Of course he cannot give me contact details for the several attorneys he claims to have, cannot provide me with paperwork, and refuses to contact my attorney. I used to feel bad for him for this one as he bought the house QC from the previous owner and I guess didn't realize he would inherit the debt.

- Filing a fraudulent contractor's lien for over $100k against the bank and me for supposed work done on the property

- Forging papers to show he took title to the property this year after the foreclosure auction.

- Advertising the property for rent on CL and trying to get thousands of dollars on the spot to secure it. I found out about this one because a potential victim spotted red flags and found me through public records.

The potential victim told me the house was packed up so I went over today to take  a look. I saw suitcases in the driveway so I wandered up to the kitchen window to see if it was empty. The tenant came out screaming at me and the former owner gave me some new BS about how the house was really his. I asked him to produce some paperwork and he asked me to wait a minute. Apparently he used that time to call the police. 

When the police arrived he told them I was harassing them about the house and had been peeking into his daughter's bedroom while she was changing. I told them the true situation. The former owner then produced the fraudulent deed to "prove" ownership. The police asked me for proof I own the house - of course I wasn't carrying the deed with me and they weren't interested in true ownership as it's a civil matter, so they sided with him and warned me for trespassing.

Hopefully it will only be a few days until the sheriff's department comes and physically removes the tenant and former owner. Of course that's more than enough time for them to defraud more CL renters and/or destroy the house. I'm also concerned that the former owner may harass me or future tenants. I bought the house through an LLC with a registered agent instead of my home address, but it wouldn't be hard to find my details with a little dedication.

My only consolation in all this grief is that I bought the house with enough margin to cover my lost rent, hefty legal bills and some vandalism repairs, and still come out ahead.

I'm not expecting any advice but let me know if you have some! 

This is such a great discussion! BP really is a treasure trove. Thank you @Kevin Nichols for starting it and @Bill Gulley, @Jay Hinrichs, @Shawn M. and @Paolo Ruggieri for your insights. 

I just got offered this deal today. My primary lender is trying to get me to use their wealth management service. They charge 1% of assets under management. One of the services they provide is a securities-backed LoC up to 70% of the portfolio value. (They also offer a bunch of other stuff that I don't really care about or could get cheaper.)

I could use that LoC to finance the downstroke on a new commercial property and have the same bank finance the rest. So they'd really be lending me 100%.

Two questions: 

1. Could I do the same deal with a discount broker and not have to pay the 1% fee on AUM? If so, who offers the best deal?

2. Is it worth paying the 1% in order to have the whole deal managed by the same bank? For example would they be more lenient on margin calls if it's their own money they're calling?

@Alan Rekowski That's weird, my personal home is also in the city and the increase was not bad. I wonder whether the city is specifically targeting multis this year?

@Michael Henry - yep, I did that for a couple last year with the help of @Sam Erickson. Just thinking that if others have had the same problem we could make a coordinated effort.

Haha, well the ones with the greatest increases were in Bay View and perhaps they were under-assessed previously. Still though... you'd think there would be some sort of limit to the increase in any given year! I find it hard to believe that a property was worth $337k in one year and $548k the next year (just one example).

I do know the Bay View alderman well, and may have to take it up with him. Good thought.

Just got my re-assessment letters for 2016. Is it me or has the City of Milwaukee gone insane?

My LOWEST increase on a multifamily property was 25%. I had one at an 80% increase!!! Most were around 40-60%.

Has anyone else had the same problem and would you be interested in a coordinated effort to protest the assessments?

@Sam Erickson @Dawn Anastasi @Brandon Markham @Rebecca Knox @Robert Taylor @shawn ackerman @Jason Bott and others...

People who are just thinking in terms of cash flow are missing a huge benefit.

Say I have an 8 unit with rents at $700. To keep things simple let's value the building on a 1% basis. So my building is worth $560k. 

Now let's say I raise rents to $750, and in doing so I get two months of vacancy and some turnover expenses. It might cost $2000 in lost cashflow. BUT the value of my building is now $600k. I can now refi or sell to capture way more value than I lost in cashflow. Plus I have tenants who are willing and able to pay market rent in the future.

@Dave Van Horn Great post, thanks for this. 

Can you explain your last point? You said:

> For example, the 1st is $100,000, and the payoff for the 2nd is $50,000. You would have control of the opening bid of the sale, so you may have it start at $150,000, in order to protect your interest.

Why would you choose to open the bid at $150k instead of opening at $50k to take control and then buying out the first at $100k?

@Jackson Sandland Please connect with Sam Erickson on this site. He is listing a great cashflow property of mine in a good area. Currently off market, will hit the market in the next couple of days.

Hey @Brandon Markham and @Jason Bott! Funny seeing you guys here...

Would you be looking to blitz the project (bigger contractor, more overhead, but done quicker) or go unit by unit?

If you're going unit by unit I can recommend my guy Larry. Send me an email and I'll give you his contact info.