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Today I went to a presentation given by a Fresno Deputy District Attorney on MORTGAGE FRAUD in our local market.  Listening to the kind of schemes that people use to defraud others was enlightening.  Criminals are just that: Criminals.  And they don’t give a second thought to lying, cheating, or stealing.  If they can do it and get away with it - THEY WILL, or at least they will try.

One of the more interesting topics the DA  spoke about was a woman in town who is actively engaged in seeking to gain property by adverse possession.  Now there is a ligitimate means by which this can be done but this gal is not playing by the rules.  According to the DA one of her victims was a woman who has a home in which a relative commited suicide.  She was so distraught by the event that she did nothing with the home for a couple of years.  In the mean time the aformentioned schemer has moved in tenants and is collecting rent on the property as though it is hers.  When the owner visits the property and confronts the gal she says “oh, so this is yours, and just picks up and moves on as though she just made an innocent mistake.  CREEPY!

Another case, which she already prosecuted, involved a 77 year old man, sher described as very charismatic, who bilked his friends and associates out of nearly 700 thousand dollars.  He was supposedly putting their money into a real estate investment but as it turned out all but 25 thousand dollars went into his personal account.  With friends like that, you really dont need enemies.  He is serving a 4 year sentence.

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Part I

Part II

BEWARE WATER DAMAGE:

Story 2

I had the house rented to a tenant that for all intents and purposes was a good tenant: rent paid on time; trouble free tenancy.

When the tenant moved out I noticed a small leak in the bathroom at the shutoff valve under the stool.  The tenants never bothered to inform about this problem and the water was soaking in where the floor meets the wall.  The caulking around the tub was also faulty and this water, and water that escaped the tub when they bathed the kids, had soaked through under the tub.  The end result was serious water damage.

I had to remove the toilet and tub/shower, tear out the floor, replace all the damaged sub-floor structure and then replace tub, toilet, and install new linoleum.

Story 3

House was rented to good tenants who took care of the home and paid the rent on time.  Whenever there was a problem they would call me and explain the problem and usually they would take care of it themselves and deduct it from the rent. 

One day I drove by the house to check on things and noticed the hose bib on the front porch was shooting out tiny but constant stream of water.  I spoke with the tenant about it and he said he would pick up a hose bib at the hardware store and take care of it.  So what’s a hose bib cost?  Less than $5.00.  Anyway, I never gave it a second thought.  My bad!

About 6 months later when the tenants moved out I went down to check on things and found that he never did put in a new hose bib.  The wood skirting on the entire left front of the porch was rotted as a result.  Not a big deal really.  But when I tore it off I found out that the beam under it that supported the entire front of the house was also rotted.  I had to go to a specialty lumber store to get a beam sized to match the old house.  Then I had to go rent house jacks to jack the house up.  Then I had to get a crew of helpers together to jack up the house and replace the beam.  I would dread to think what a contractor would have charged me to do the above.  All because of hose bib that could have been replace for next to nothing!

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If you’re stuck with a home that you have to sell or rent call me – I can help.

© Randy “Lazarus” McAtee
    Owner/Broker Lazarus Realty

    559-301-1647
    email me

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I could have titled this: HOW NOT TO BUY REAL ESTATE.

I received a call from a gentleman who saw my number on a sign I had on a property I own. He told me he was from L.A. and wanted discuss investment property with me. He came by my office and the first thing I learned was he just closed a deal with another Realtor on a piece of commercial property.

He showed me a flyer his with a picture of the property just purchased, and told me he bought it for $225,000 cash and wanted to buy some more property in the area. The more we talked the more he opened up and it turned out that while he DID buy the property for cash, a substantial portion of the cash used to make the transaction came from an equity line on his primary residence.

I then asked him the question I would ask anyone who buys real estate as an investment: “So Mr. ________ ‘WHY did you purchase this property‘?”

His answer: He believed that one day he could develop it (at which time it would be a good investment) but until then he was going to rent it out. So I asked him how much he intended to rent it out for and he said he was hoping he could get $900-$1,000 per month.

It turned out that his payment on his credit line for the financed portion of the property is right around $1,000 per month. So here is what I laid out before him:

M. ______ if you put $225,000 cash in the bank at 5% interest you would collect approx $937.00 per month without doing anything: no risk, no hassles, no taxes, etc.

Every month that you hold this property you will have the following fixed costs:

• Taxes: $225.00
• Utilities: 60.00
• Insurance: 65.00
• Managment: 100.00 (unless he decides to manage it himself)
• Payment 1000.0
• Total $1450.00 PER MONTH

If you rent this property for $1000 per month it will cost approx $450.00 per month to carry it - not including deferred maintenance and vacancy factors.

SO - MY TWO QUESTIONS:

• 1) HOW IS THIS A GOOD INVESTMENT?
• 2) CAN YOU AFFORD TO PAY $450.00 PER MONTH TO HOLD ON TO IT UNTIL SUCH TIME AS YOU DEVELOP IT?

Believe it or not - he had never been asked these questions and I could tell his wheels were starting to seriously spin. He left my office and returned to L.A.. A couple of months later we met in my office again. He had contacted the City of Fresno and an architect to get an estimate of development cost (something he should have done BEFORE he bought the property) and from the information he gathered the cost to develop the property exceeded the potential income.

So now he asks me, “CAN YOU HELP ME?”

Conclusion: I found him a tenant that did a lease/option and the lease payment is close to break even for him, the option money put some cash in his pocket, the option price (if exercised) will give him a profit —- HE’S HAPPY.

If you’re going to buy real estate as an investment you need to know WHAT YOU’RE BUYING AND WHY YOU’RE BUYING IT. How simple is that? If its an investment then you need have numbers that show a reasonable RETURN ON INVESTMENT (ROI). The first thing you should ask your agent when he says that he has a good investment property is SHOW ME THE NUMBERS.

If you’re interested in purchasing INVESTMENT PROPERTY in Fresno, don’t hesitate to call me.

© 2007 Randy “Lazarus” McAtee - owner/Broker Lazarus Realty and Fresno’s Foremost Blogging Broker.

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HELP! – I CANT SELL MY HOUSE – I NEED TO RENT – NOW WHAT???

Is this your situation? 

• You have your  property listed but no offers

• You cant lower price further without losing money (i.e. I would have to come up with cash to close)

• The mortgage payments are eating you alive.

The first thing you need to is call me educate yourself with the laws regarding Landlords/Tenants. 

You can get plenty of information off the Internet.  This California Courts Self-Help website is good for starters.

WARNING #1:  Having been a landlord I can tell you many tenants KNOW their legal rights; you need to know what your legal responsibilities are.

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Sometimes when you need to show a home tenants just don’t cooperate. Of course, if they just let you SHOW the home, I consider that cooperation, since some won’t even do that. Don’t get me wrong, some tenants are angels; just know that some are devils too

In the video below an agent is doing a showing, and as you can see the tenants could care less.

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