Dee L Graber
Active 1 year, 11 months agoForum Replies Created
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The line in the sand between reasonable (and affordable) fines versus outrageously high fines intended to be unpayable and a easy theft by cities looking to pad their coffers is sometimes extremely blurry. This article covers such wars in detail:
The Dunedin, Florida municipal fines plunder machine
Even my own little town in Texas back in 2017 adopted something pompously called the “International Code of Property Maintenance” whereby Code Enforcement can threaten homeowners with fines up to $2,100/per day per citation. That’s an amount in this state that’s about the same as courts issuing fines for life-threatening DWIs. It quickly turns into municipal plundering.
–Dee G
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See this letter by Jeffrey Tucker titled “Were The Preppers Right Along?https://gildersdailyprophecy.com/posts/were-the-preppers-right-along
–Dee G
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There’s another low-tech, low-cost, low-risk business based on government auctions of foreclosed properties. Very often when a city or county confiscates a property and sells it for back taxes or outrageous code enforcement fines the owner can’t possibly pay, the auction proceeds bring in way more than enough to cover what the county or city was owed. BUT generally that government office will sit on the full proceeds without any obligation to return the remainder to the former owner. And generally that owner is devastated and has no idea of his/her legal rights to that overage.There is quite a business in many states (not all) where a trained person can make a business of finding such overages, forcing the government office to turn over the overage amount, and collecting a fee for returning the majority of such overages to the former owner. It is an honorable business that often provides desperately needed relief to the dispossessed. One attorney who teaches that tax overages business is Bob Diamond …an easy lookup for those interested.
–Dee G
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Greg, just a thought: Your 78 year old guy’s situation may have some medical implications. At that age, sudden medical events have a way of monkey-wrenching all kinds of plans and promises. Although I’m not quite to your guy’s age, I’ve been through what I thought to be a quickie ER trip that turned into a much longer stay. In another situation I learned what a medical kidnapping is … that denied me access to my phone, laptop, voicemail system, and directory of all my personal and business contacts, etc — for weeks. And when I finally got back home, the accumulation of unanswered voicemails was overwhelming.The point is that his phrase about “a lot going on” could possibly cover all kinds of things that may not reflect any lack of interest on his part. In my case, just the number of funerals and estate issues for both relatives and long time friends has gotten in the way of all kinds of things. One of my long-time buddies (who died just a few months ago) said that while he was still working he was told to get everything possible done while he still had the time — because once he would be retired, the demands on his time would skyrocket. And that turned out to be true.
So your 78-year old guy’s “silence” may well not reflect any lack of interest on his part but simply a ton of “stuff” to cope with. Patience may be a useful and respectful virtue here.
–Dee.
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These court rulings are at least a strong measure of the dissatisfaction over the federal CDC agency trying to regulate evictions:A nationwide ban on evictions is well outside the congressional power to regulate interstate commerce, ruled U.S. District Judge J. Campbell Barker on Thursday,
CHRISTIAN BRITSCHGI | 2.26.2021Federal Court Strikes Down CDC’s Controversial Eviction Ban as Unconstitutional
AND
Texas Supreme Court Ends Enforcement Of National Eviction Moratorium Statewide
Texas Supreme Court Ends Enforcement Of National Eviction Moratorium Statewide
They don’t however rule out further court fights over that issue — and many other housing-related issues where the blue states and red states have hard core disagreements.
–Dee G
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I did a little digging to find this explanation about how a court designates an executor (sometimes by other names, depending on the state) when there is no will. Since the daughter is the only heir (and was apparently unable or uninterested to be an executor), the court had to go outside the family for an administrator.https://info.legalzoom.com/article/how-do-you-become-executor-estate-without-will
Can the current designated executor legally prohibit one from talking with the tenants? I doubt it, but it could make him/her angry for some reasons. I once had a realtor I had only talked with, but not contracted with, surprise my tenants and ran them off the property before I had even made a decision on selling the house.
It would be worthwhile BEFORE talking with those tenants to learn what protections the relevant state law provides for tenants with existing lease agreements. The tenants may well not know what those rules are. If you can provide some assurance that in case of a purchase (or master lease) that they won’t have to upset their life with an emergency move and likely could expect a lease renewal once the existing state law protection for such in-place leases expires, you’ll have a lot better chance at a functioning long term relationship with them.
–Dee G
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I have several questions but no idea of the answers.It sounds like the house was seriously over-built for that area. So here are some puzzles:
Is it possible, financially reasonable, and legal that the house could be either remodeled into multi-family rentals or condos? And if so, are there reasons why neither of those ideas would work in that area?
Is it possible that a satellite hookup could help solve the internet access issue?
Is the 4 acres of coffee farm land too small to lease out to a capable coffee farmer? Had the owning couple been generating any income from the coffee acreage or had that land been lying fallow for some time?
Are there potentially higher and more profitable uses for that coffee acreage? With Mexico about to open up a huge marijuana market, that will have to get Panama’s attention. If Panama chooses to imitate Mexico, could that bump up the value of that coffee acreage? Across the globe there is increasing interest in vertical farming of plant crops on small acreage, and some higher value generating crops on that 4 acres might bring in some unexpectedly high yields.
Is it possible to rethink the owner couple’s plan to buy somewhere back in the US and instead consider renting if enough rental income could be generated in Panama with local management via a master-leasing operator who would only take a small cut from such revenue? [This is a terrible time to be investing in a home in the US as we head into a huge financial crash.
–Dee G
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It’s not enough to merely get outside the city limits. In my Texas county there are frequent wars between cities that want to annex adjacent rural land in the face of rural property owners who despise the idea of being subject to such bureaucratic and often abusive city ordinances, zoning rules, etc.–Dee G
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Predicting what will happen or won’t happen is a hazardous game. Who could have predicted back in 2019 that many of the US small businesses would be shutdown allegedly because of Covid-19? Who could have predicted in 2019 that 2020 would see the greatest election voting theft in world history? The military makes a practice of drawing up contingency plans for events that may or may not ever happen — because if just one really bad event happens … there is already some expertise and strategies in place to handle it.I think that contingency planning is relevant in advance of government regulation, whether from a runaway Congress or horribly misguided executive action. Regarding real estate I had to look up the origin of an old quote that said basically “own nothing; control everything.” It turned out the author was John D Rockefeller whose legacy was generations of heirs who very successfully have preserved wealth.
In that spirit this article about asset protection may become highly relevant — even if it turns out that competing strategies may be superior. I don’t claim to be an expert in asset protection, despite some passing acquaintance with land trusts. See if this article jiggles your imagination (even if you decide some alternate strategy is better for you) in the event that a horrendous loss of the stepped up tax basis becomes a very bitter iron-clad fact:
The article also does not discuss the use of long term options to control property without owning it.
–Dee G
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Biden’s proposed destruction of the stepped-up tax basis:America’s Family Owned Farms Now Face the Greatest Threat to Their Existence
–Dee G
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Re: finding a private lender: I received an email just this morning from these people:Do your own due diligence on them. Looks interesting.
–Dee
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It looks like there are 777 cabins to be auctioned off as condos on the newly name “Satoshi”.https://news.bitcoin.com/crypto-cruise-ship-satoshi/
Gosh, how many opportunities to master lease whatever number of such cabin / condo / Airbnb dwellings might you care to shoot for?
–Dee
PS. Is this on the buggy side of Panama…?
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What that ad does NOT say is whether Zillow would have a competent home inspection done to determine condition and a list of needed repairs. If such an inspection is part of the plan, then the question is whether the Zillow offer has a long enough fuse on it to give the homeowner sufficient time to shop that offer with other such competing “we buy houses, as is” people. [Dan Franklin in Dallas is still running late night radio ads saying he will beat any other offers you have on your as-is house, for example.]If that Zillow fuse is too short, it’s a big warning that they’re afraid of competing offers.
If no home inspection is part of Zillow’s plan, then you have to assume they’ve built in a deep cushion in their offer that will maximize the damage to the homeowner’s hide.
–Dee
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I should have also mentioned that the bankrate article did NOT mention the stunning advantages of using camera-equipped drones. When I ran a search on camera equipped drones for real estate marketing, there were very many interesting hits. Here are just a few of them:Best drones for real estate marketing
Best Drones for Real Estate [Updated 2020]
https://www.dronethusiast.com/best-drones-real-estate/
Fly It, or Buy It? The Complete Guide To Using Camera Drones for Real Estate Marketing
Fly It, or Buy It? The Complete Guide To Using Camera Drones for Real Estate Marketing
9 Best Drones for Real Estate: Your Guide, 2020
and there are lots more.
–Dee
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While this article is oriented towards buying and selling houses with a realtor, some of the advice given to realtors is of relevance to CFD style deals. The CFD open house practice of cramming in as many interested parties as possible is pretty much ruled out by the social distancing guidelines. Making sure that neither the owner, tenants, or visitor/potential buyers are free of virus issues is another workload issue. Finally, there’s a section discussing how to make virtual tours most effective, including blunders that hurt them.The article does not discuss the various states or cities where lockdown rules might prevent using an open house in person method altogether.
Finally, the article does not cover the hazards of holding an open house in an area where rioting is a possibility — and where insurance companies always have an escape clause in their homeowner policies so that if rioting or related vandalism causes property damage, the insurer absolutely will not pay for such damage because of civil disorder.
Steps for buying and selling a house during the coronavirus, May 9, 2020
https://www.bankrate.com/mortgages/homebuying-and-selling-during-the-pandemic/
–Dee
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I recently turned down two such promotions in distant cities — even though the promoter offered to pay for the airline tickets and hotel bills for a 4-day training. I would have happily paid for recordings, or better, transcripts, but neither was offered. In this era when there is such chaos from state to state as to what is open, how hospitals can operate, what businesses must remain closed, the unreliability of Covid-19 test equipment, stories of a 4-hour process before being allowed to board an airline, and the patchwork of states that discourage some treatments for Covid-19 that has proven highly successful in other countries, PLUS the predictions of a second wave of the virus for this coming September, my somewhat cloudy gypsy’s crystal ball suggests that travel under such uncertainties is likely a bad bet.Khan Academy (and many others) has for a long time proved that online learning is practical and effective. With so many public schools being shut down and the extreme interest in home schooling as a replacement, the perception of avoiding out-in-public events as much as possible is very widespread.
I think that instead, educators (whether in real estate or anything else) would be wise to make recordings, transcripts and/or online learning available for the “foreseeable” future.
–Dee
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Curtis, I’m glad you spotted that difference. I didn’t. So where does that leave us?Realize that CashFlowDepot’s guiding philosophy focuses on low risk deals involving little or even no out-of-pocket cash. That includes avoiding loaned cash if at all possible. All that means is that your proposed deal is well out of the CashFlowDepot’s traditional scope.
That being said, I’m going to suggest that as long as your proposed acquisition meets your risk minimization requirements, and is compatible with your skill and experience (whether you would be an active operator or simply a remote owner), that you consider the possibility of seller financing as an alternative to using traditional lenders such as the SBA. Take a look at this article and see if it fires up your imagination:
Owner financing for business acquisition without using a traditional lender
https://www.lendgenius.com/blog/owner-financing/
And if you and the present owner are not able to come to terms on the details of a seller financing arrangement, perhaps this is not the deal for you. So many small business acquisitions involve some element of seller financing that eventually you will find the right one that won’t tie up your other property(s) as collateral.
Respectfully,
–Dee
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Curtis, it sounds as though the guarantee demanded by the SBA was per pre-bailout era rules. That world just changed this last Friday with a huge chunk of federal cash that expanded the SBA to now exceed the size of Walmart. And with that came a radically different set of rules. See this article:The ‘Small’ Business Administration is now bigger than Walmart
The ‘Small’ Business Administration is now bigger than Walmart
Excerpt:
“According to this new bailout legislation, “no personal guarantee shall be required,” and the government “shall have no recourse against any individual shareholder, member, or partner . . . for nonpayment”.In other words, the legislation implies that these loans don’t have to be paid back.
Moreover, the law also states that “no collateral shall be required for the covered loan.”
So you don’t even need any assets to qualify. In fact you need barely anything to qualify… except a pulse.”
There’s a good chance that the new rules might take a little time to filter through the SBA … as happens with any huge bureaucracy. Wouldn’t it be convenient to obtain that loan under the new conditions where the SBA is prohibited from demanding the loan guarantee they could legally do only through the end of last week — but no later!
–Dee
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Darcy, you have some complex challenges — some we can take a stab at addressing here and probably some that will need some outside expertise.This is one of the few countries that transfers the oldest generation into assisted living or nursing homes. (A buddy of mine pays $5,300/mo in an assisted living facility.) Most countries keep them at home where the younger generations cares for them as much as possible. That decision could factor into your complexities.
Another issue is the actual rate of currency purchasing power loss, euphemistically labeled as inflation, but in fact is federal theft of purchasing power via counterfeiting. The BLS publishes a bogusly low inflation rate in the 2-3% range typically, which is used as a cheap index to cheat social security recipients out of significant purchasing power. Instead, a realistic loss of purchasing power in major city by major city is posted online at
Look it over and see what the history of purchasing power loss has been in the nearest major city to your location. Then consider that the Federal Reserve is likely to power an enormous amount of freshly digitally created money into the system this year — which has the potential to wreck the purchasing power of a many-years-long stream of seller financed payments (on both the principal and the interest payments).
If for example, you unwisely believed the BLS inflation rate of 2-3% when the actual rate near you has been running in the 8-14% range, and you priced your interest to be received around, say, 5-7% — BEFORE the Fed does the next monster money dump, PLUS whatever the tax bite would be on the interest you receive — what does that do to your incoming payment stream?
Such a tax bite (on top of the inflation hit) requires a conversation with the best tax accountant you can find. Only that way can you begin to estimate what some future numbers might be.
Are you prepared to index your incoming payment stream’s interest rate to however flaky the inflation rate may vary or even soar? The problem with a fixed rate is that nobody is a good fortuneteller in such circumstances. Prior to 1933 it was very common to index interest payments to the price of gold. Such loans were known as gold contracts. Then when FDR shut down the ownership of gold bullion and bullion coinage for mere mortals (leaving collector coins and offshore held gold untouched, so as not to offend the uber-wealthy class) in March of 1933, gold contract loans died as well, even though there was a long history of state courts upholding them. It wasn’t until the 1970s when private ownership of gold bullion and gold coins became legal again. What’s not clear is if state level courts could again rely on that ancient pre-1933 history of upholding gold indexed loan interest payments or not.
This is discussed in great detail in the 1980 book by law professor Henry Mark Holzer titled “The Gold Clause — what it is and how to use it profitably.”
With all the news of a huge global depression in the works, with Federal Reserve indications of QE coming (euphemism for digital money printing without asset backing), and with prices of goods about to skyrocket because of the just-in-time supply of all kinds of goods being shut down in China because of the exploding coronavirus mess, if you can’t be sure of being able to index your seller financed mortgage payment interest (your ARM loan) to something like gold and not know if a court challenge would threaten your contract, then the alternative of renting out the house with the likely freedom to raise the rent as money values plummet could look much more attractive — unless your house is in an area where local politicians are strongly in favor of rent controls.
One really interesting alternative could be, IF you decide to sell for upfront cash, is to use those funds to create an international charge card, backed by gold bullion in a Swiss vault, via
It is a UK outfit in partnership with Mastercard that extended its services to America about a year ago from last November at the international boat show in Ft Lauderdale. Compare that to gambling in the stock market as the Fed-created decade long credit bubble comes crashing down, or stuffing cash into a bank account where the yield is even worse than the phony BLS-published inflation rate.
Other issues that may or may not be relevant are things like the federal gotchas on disability payments. If you or your spouse are receiving, or may possibly intend to receive disability payments sometime in the indefinite future, I just recent read where a federal rule limits the amount of cash you’re allowed to possess to something around $3,000 so the feds won’t start cutting back on such disability payments. Or … this may not be relevant to you at all. The ancient Roman historian Tacitus wrote that the more corrupt the state, the more rules are created — and we are up to our earlobes in rules.
If you should decide to rent out the house and use that for an income stream, there are three ways to do that, which would include 1) managing the property yourself (which works for some people, but not for others), 2) using a formal property manager (which is widely done, but has its own gotchas, or 3) locating a skilled master leasing practitioner (as is advocated here on CFD) which is far better if it’s not appropriate for you to manage the property yourself.
That could give you the ability to adjust the rent over the years to cover whatever flakiness the inflation rate surprises us with. And that would create an inheritable property that would come with a 100% step-up tax basis and with a built-in income stream as well.
All I can do is point out some additional issues here that you may not have considered. I would not presume to be able to stir all the complexities into a bubbling cauldron to cook up your final solution.
–Dee
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