All Forum Posts by: Scott Allan

Rich-

I did not know RC's father, just the younger RC.  I'll admit as a past friend of his, he was never the sharpest spoon in the drawer.  He never had good business sense but as a friend, I did trust him and I fell for it at the time of me holding a very high financial position, so I should have known better.  

I'm happy you were able to provide the DOJ info as I'm sure many victims did.  I met with them several times in Brooklyn and it was my connection with the DOJ who graciously pushed this in front of the prosecutors for the case to be investigated.  Nobody will know his name on this forum, but I will be taking him for a beer next time I'm in NY.  It was a very long process but a huge win for them and all of us.  I was nearly a government witness, however I'm pretty sure the DOJ saw that my temper was very short and that I probably would have kicked the **** out of Lange on the stand and blew up the case :-)

Carlos: At this point, I don't believe there is money to go after.  The government seized assets that will likely be distributed, but I'm not familiar with that part right now.  At this point, I have closure knowing that Lange is done.  Hoping everyone can move on or find additional closure down the road with some type of reimbursement.

One last thing that I'm not sure if anyone is apprised of.  Roger Campagnolo died of a massive heart attack in 2012 while playing intramural soccer, ironically right before he was rumored to be charged.  Died right there on the soccer field.  Roger was a very good friend of mine for years since 2002.  He was about 40 years old with a young daughter.  He got me involved with Bill Lange and in the end I think Roger's intent was to believe in Lange's scam so much that he sold his soul to satan.  I truly believe that Roger was in too deep to tell even his closest friends the truth on what he believed from the beginning was a massive scam.  I believe the heart attack was due to him being a bit overweight, and much worstened by the severe stress of this case.  I've only known Roger as a good, kind hearted guy.  Roger C was sold hook, line, and sinker by Lange.  The GFC was at it's worse and perhaps he was looking for a payday.  Money is the root of all evil ??  

And here is the article for everyone to hang on their refrigerator:  http://mobile.nytimes.com/2015/03/13/nyregion/after-bilking-victims-of-10-million-serial-swindler-is-sentenced-to-nearly-22-years.html?referrer

If anyone is still reading this blog article, I am very pleased to tell everyone that Bill Lange was sentenced to 22 years in Federal Prison yesterday.  This was a long time coming and closure for us all.  Nobody wins here, but this criminal won't be hurting citizens anymore.  At the very least, I'm glad I was able to use my connection withe US Attorney's Office and be personally involved in bringing this jerk to justice.  The prosecutor wanted 18 years, and the judge gave him 22.  He will likely die in jail in a cold concrete cell.  Sorry for this, but :-)  

I've been doing CRE for awhile now and I am specifically in multi-family. I disagree with the older guy who says "6-8%". Sellers have motives for selling. In addition there are plenty of resales out there where investors bought REO's, fixed them up, increased the Cap Rate to say 15% and sold for an 8-10% Cap Rate. Why would they sell? Profit and liquidity. Easy. Here's an example of a recent one I saw:

Investor REO NOI on Pro Forma After Improvements: $89,650
Submarket Trade Value is 8% Cap Rate for this property type:
-Value: $1,120,625 (sold at full price) ($89,650 / 8%)

Investor paid $540,000 and put $200,000 into it. His gross profit of $380,625 had an EBIT (Earnings Before Interest and Taxes) of about $300,000.

He didn't pay interest on his money so was subject to about 35% income taxes. His Net Profit After taxes was approx $195,000 a net ROI of 26%. Using the Discounted Cash Flow concept or Weighted Average Cost of Capital, this property made a lot of sense, therefore was a reason the investor sold.

It was a win-win situation and I see these all the time. Everyone gets so caught up in "not buying from the MLS". I think that is the most ignorant thing to say because there are deals out there if you negotiate what works best for you.

I am in Northern NJ market of Hoboken and Jersey City. To get 2% rental, you will need to buy in the lower income areas. Section 8 will get you higher rents and your higher demand on returns are all relative on how the market trades. From an investors perspective and ROI or Capitalization Rate standpoint, your higher ROI's will be in higher risk markets.

For instance, in parts of Jersey City where there is some crime, you will get a 12% ROI on pro forma and I am seeing a lot of ACTUAL double digit ROI's in reviewing my clients year over year statements. In Hoboken, where it is a high end market flooded with Wall Street, bankers, etc, you risk is far less. Net Yields on single condos are about 6% at the most. A $500,000 condo for instance will only get you about $3,000 a month in rent. In Jersey City for a 2-family home, you can buy a renovated home for $160,000 and rent them out for $2,600 a month.

At the end of the day, you have to be comfortable with where you are investing. There is a ton of competition in higher end markets right now and Cap Rates / Yields are being driven down with increasing rents creating an increase in prices. You need to work with an agent who can specifically tell you where the market is trading at in different categories, ie..multi family, single family, duplex, etc... Hope this helps, but I see a ton of upside right now in some upper end markets.

Bill Lange and partner Joseph Pascua indicted this morning 1/26/11. Stay tuned for more details.

For those of you losing out hope, I wanted to let you know that I have spoken to people who believe that this case is coming to a very close conclusion. I will continue to keep all posted as I hear more.

I work in the SW Florida and northern NJ markets. Sales are dramatically down in both in July. It's 99% due to the Tax Credit expiration I think.

Sales are still strong actually but we were spoiled from January through June.

I am making some of my best money right now in short sales. Problem is there is a wait typically. I started investing in short sales in Florida 6 months ago. Only about 2 months ago have I started seeing profits.

I buy to flip. Most of my homes are very cookie cutter $50-$60k range built 2004 or newer. Structurally everything is good. I do some nice landscaping, paint the inside, re-do flooring if necessary, etc. The availability of USDA financing is helping me move my homes to primary borrowers where the marginal difference between cash buyers and financing buyers is pretty favorable.

In my situation it took 2 months approximately on average to get short sale approval and another 2-3 months to get an offer and close with an end-user buyer. I am averaging 20% ROI per home.

So my opinion is if done right and you have patience, they are just as good, if not better than REO's. I have found it helpful to offer a CMA with my offer to the seller/bank. Most of the times they ignore it but I have had good feedback from some.