Asset Management & Recovery: March 2007

Magistrate:  Sir, are you ready to proceed?

Tenant: Yes.

Magistrate: Did you receive this notice date March 7?

Tenant: No, I only found out about this from the Subpoena.

Magistrate:  Mr. Kruse, did you post this notice?

LLMan: Yes sir.  Posted on the front door personally on the date specified in the Notice. See photo of Notice taped to door.

Magistrate: Mr. Kruse, was the tenant behind in the rent at the date of Notice and are they still behind?

LLMan: Yes sir.

Magistrate:  Sir, do you have anything to say?

Tenant:  Yes.  I would like to request an attorney.

Magistrate:  I thought you said that you were ready to proceed.

Tenant:  That was before I thought I was going to loose.

Ok, now my attorney and I stop paying attention for a minute because we are trying to keep from laughing, but there was something said by the Magistrate about waiving counsel.

Magistrate: Do you understand the terms of your lease?

Tenant:  I never received a copy of the lease, so I have no idea what it says.

Magistrate:  When did you move in?

Tenant:  January, I think.

Magistrate:  Mr. Kruse?

LLMan: Sir the tenant moved in, according to the lease he signed, on October 7, 2006.  I have a copy if you would like to review it.

Magistrate:  Sir, it appears that you have a lease in place that outlines your payment obligations.

LLMan:  Your Honor, I would like to point out that the former representative of the owner, who signed the lease on behalf of the owner, is this gentleman's sister.

Magistrate:  Is this correct?

Tenant:  No sir.  I am an only child, however I do know Theresa.  After she and her husband moved from their previous apartment, they moved in with me.

Magistrate:  So, the person who signed your lease on behalf of the owner is not your sister, but she is currently living with you?

Tenant:  Yes.

Magistrate:  And you are telling me that you don't know that you need to pay rent?  Don't answer that.  I am ruling.............

I can't make up stuff this good!!

So I broke down and hired someone a few weeks ago.  She did such a good job, I sent her to "real estate school" to learn something.  Now that she knows how to sleep in a chair with her eyes open and choose C when in doubt, it is time to hit he streets.  Meet the peeps, walk the dirt.

Lauren, the Landlord in Training or LLIT, arrived today ready to work.  She was all prepared and dressed to kill.  Sweater set, low rider clam digger pants, 4 inch heals, pink cell phone. 

On the other side of that coin was me.  Dressed to kill alright.  Cargo shorts, t-shirt, gloves, .45 automatic, police style flashlight and work boots.

She looked at me and I looked at her. "Let's go" I said.  "Where?" she asked.  "Hit the streets, meet the peeps, walk the dirt" I say.

OK, so she is pretty much not dressed for this.  Let's see what happens tomorrow.

So we have 5 new listings that we need to view, report on and forward listing agreements.  Thank you, only five junkers today. LLIT probably couldn't handle more on the first day. 

Off we go.

Property 1 - 3BR, 1BA Ranch on slab.  Front door unlocked.  Holes in every wall.  All plumbing ripped out.  Toilet smashed with a bat or something.  Furnace sitting near rear door.  The truck must have been full or they would have taken this in the first load.  LLIT is not phased.  She is just taking pictures.

Property 2 - Oooops.  Still a tenant.  No thanks Brandeldean, neither of us smoke that brand.  Thanks for the offer though.

Property 3 - Can't get in, but the smell can get out.  Time to call Dumpster Mike.

Property 4 - Back door open, funk in the kitchen and we meet a new friend.  We will call him Dave.  As I walk up the stairs, I sort of see a lump of cloth.  Looks like a comforter.  Yep.  That was a comforter.  I should really call it a "scare the crap out of LLIT orer"  Dave sticks his head out and I feel a tickle on my butt.  OK, LLIT this is not the time to flirt.  I'm carrying on a conversation and she is reaching for my gun!  Uh, Dave..You gotta go.  We leave.  Maybe Dave does too.

Property 4.5 - Added stop.  I see a new listing in an area that I want to buy in.  3500SF, all brick rehab job.  Probably worth $500,000-$650,000 after I am done.  Long and short, we get in and are looking around.  Property is all boarded so it is like a cave in there.  So we hear it.  "Hey, what are you doing in here?" I freeze and move the flashlight around.  I see it.  It is stainless steel and has a hand attached to it.  Knife?  I don't know.  Gun? Maybe.  Crackhead?  Odds are good.  "I'm from a couple doors down" it says in the dark.  Yeah and that is making me feel real good, I think.  Ends up that Roy as in my boy Roy is a lawyer who works down the street and wanted to see the inside of the place.  Little does anyone off the Rain know, but I almost put a new hole in LLIT's new buyer client !!!!

Property 5 - a double that has a fan in the window.  All I know here is that the lady next door is "fitten to be ha this summmm and wannns the faaaa".  LLIT needed a translation.  Yes.  Rookie.

So, let's sum up her first day.  High heels, we made a new friend Dave, one new listing smells like Chubacka after a swim in the pond, I almost shot our newest client and I have a buyer for a cheap fan, as long as the fan is free.

I just need to ask this question...

Over the past three days I have spent a lot of time sitting on the couch blogging, commenting and actually doing real work.  I notice that all of the news channels are reporting "This just in..." with pictures of demolished trailer parks.  "We are the first to show you....."

This actually brings up many questions:

1. Do CNN reporters live near or in trailer parks?
2. How then can they bring us the pictures so fast?
3. Do twisters hit real homes too?
4. Does Texas have a non-trailer park section?  I have heard of this place called Dallas?

Reminds me of a joke.

What to divorces and tornadoes have in common in Texas?

Either way, someone is loosing a trailer.

Sorry for poking fun at all you Texas people.  I guess it was just your turn.

On Friday morning I had a meeting with one of my bank clients.  We scheduled about an hour for our get together, but after an hour and a half we still didn't get through all of it.

I am currently working on 9 REO for this lender + I am working with one of their borrowers to undertake a short sale on 15 single family homes.  This is not all I am working on for them, but it gives you a thumbnail.

I went in to discuss a price reduction of 5%.  The decision maker asked about the marketing efforts and asked about the showings.  Efforts high, showings low.

Without me making the suggestion, the lender tells me to pick a day and offer all of his REO at auction.  In his words, he wants to sell at the beginning of the selling season and before the market slips any further.  He wants to get as much as possible sold before the market becomes even more glutted with inventory.

As I was walking out, one of the other bank officers hands me a list of another 10 addresses and tells me to do drive bys and prepare listing agreements.  She goes on to say that there are another 3 borrowers with over 60 properties that are well past 60 days late and that this is probably not all of it.

This is not the first conversation I have had like this with local and regional lenders.

If the trends continue, we are going to see a lot more bank defaults.

The lenders are looking to auctions to dispose of property.

Ok Rich, get to the point....

At my auctions, the buyer is represented by agents only about 20% of the time.  Auctioneers around the United States will tell you the same thing.  Auctioneers want to pay you a co-op.  They want your buyers at the auction.  Most are happy to walk you through the process.  Many are teaching seminars on How To Buy At Auction all over the US.  There are NAR predictions that 30% of all property will be sold at auction by 2010.

All I am asking is that you take the opportunity to learn about the process now.  The wave has started and it's not just in the low end properties.  I have a hotel and bowling alley on my list of proposals right now.

Columbus Ohio real estate investors have a new place to go for education and to find the next deal.  Introducing CIREN. The next meeting is March 27th starting at 530 PM at the Columbus Board of Realtors, 2700 Airport Drive, Columbus.  See below. 

I am pretty sure that the 6:30 speaker knows what he is talking about !!!!!

We have had a little trouble moving a lot of the REO inventory for awhile so Melissa and I stepped up the advertising and did all the things we should be doing.  Internet, print, etc.  Even then, we couldn't get showings.  One morning Melissa asked me what else we could do to get exposure.  I told her that we have bank property so we are going to use bank marketing. 

Buy a house, get a toaster.

Anyway, we both laughed about it, but I put the offer in MLS.  Many of our bank owned units now describe the property and say "Free Toaster".

Would you believe that it worked?  I received the following offer today.

Additional Terms Page 2 of 2

Item 10. The buyer would like to take advantage of the "free toaster" offer in the Remarks section of the MLS listing and requests the toaster be black / stainless.

I called the agent to tell her that the listing agent reserved the right to deliver a toaster of the listing agents own choosing at closing.  She laughed and told me that the only reason her clients wanted to see the house was because they saw the offer.

People say that free Hummers and trips to Aspen do not sell properties.  A free toaster offer gets them in the door though.  Just ask the banks.

We sent Landlord Boy out to one of the properties today.  He needed to show it to a young lady who found us online about a month ago.  She has been waiting for us to have it ready to show and ready to rent.

Now this is the day that I hit 50k on the Rain.  Things were good and I was waiting for something to go wrong.  It was going to happen.  I just didn't know what would go wrong. 

Crap.  5:54pm.

Prospective tenant wants the place.  She wants to fill out an application on the spot.  Since we have had this vacant for 2 months, I am ready to rent to a donkey with a diarrhea problem.

Phone rings and I expect to hear that we have an app and things are good.  Wrong....

LL Boy: They were ready to sign the application, but there was a problem.

LL Man: Problem?  What problem?

LL Boy: The gang bangers.

LL Man: Huh?

LL Boy: Right after I handed them the application there was a noise outside.  It was about 15 little gang bangers getting into a fight.  They came out of the house across the street.  One of them was yelling that he was going home to get his gun.

LL Man: So what happened?

LL Boy: Tenant grabbed the application and left in a hurry.

LL Man:  So what about you?

LL Boy:  I called the cops.

LL Man:  And then you left?

LL Boy: No.  I was pretty sure I was safe upstairs and there was a good view of the street from the master.

LL Man:  So how long were you stuck in the house?

LL Boy:  Long enough to see the kid in the red hat get the crap kicked out of him.

LL Man:  And after that you walked out to the car with all of this going on and left?

LL Boy:  No. I was parked in back. They never saw me.

LL Man: So why did you stick around?

LL Boy:  I just wanted to see what would happen.

I think I like Landlord Boy...

I am walking around with a broken arm.  Patting myself on the back will do that to a guy.  I realized that my next blog will put me past the 50,000 point mark.  I'd better write something special.  It had better be good.  I had better find a great topic.

I did.  The topic is me.  If you don't vote for yourself, how can you expect others to vote for you?

Looking back at 6000 points, I was just a babe.  25,000 and something started to happen.  I started to find myself a little and holy cow, now look!

I am totally out of my mind, over the edge, off the beaten path and out of the box. 

I thought I was just some dumb liquidator, but I was wrong.  Apparently I am a comedian in training (why y'all think I am making jokes I do not know), auctioneer teacher to the stars, bee impregnator and Landlord Man.

Today, so far, is a pretty good day. 

• I woke up with only a little hangover. 
• I saw a judge and didn't go to jail.  He even shook my hand! 
• The $116,000 IRS Levy was for someone else. Whew. 
• There was only 1 angry call from someone and it wasn't about anything I did.  Looks like I am making progress.
• I was invited to join the Board of Directors for an educational real estate group.  It costs about $500 to be involved, but I guess I am cool with that. 
• I read about more bees.  Mr. Yordy at Glenbrook South High School would be proud.
• I received 2 (yes I said 2) offers on properties AND they are fairly reasonable. 
• I get to drag someone into court on a contempt charge.  I told him that I would, but he didn't believe me. 
• I was just offered a waiver on a real estate designation.  For $49.95, I too can be an expert. 
• I gave out another referral today.  Some crazy cat with money wanted to buy a house in the burbs and I don't do that. Some residential agent that nobody here knows is going to make some green.  It could have been a Rainer, but wasn't.  We need more Columbus Rainers that like me.  No Respect. 
• My new website is almost done. The old one is ok too, but I am bored with it. 
• I had a tenant call AHEAD of time about having a problem with April rent, so we are working on the problem together. 
• OOOHHH.  Kick in the groin.  Commercial deal just fell apart.  That'll leave a mark. 
• Three more people on my mailing list.  I am closer to world domination.  
• William J. Archambault, Jr set me straight.  Mad Prop's to Bill.  Whad up Yo?
• Jay McGillicuddy is about to get Mad Prop's, but he doesn't know it yet.  Whad up Jay? 
• I think I hit 50,000 too early and Kelli Fronabarger knows why I think so. 
• We have a new agent coming in.  Poor Bastard.
• I have used more links here than in any previous blog.  It's not happening again.
• Can't rant without Aunt  so that makes you an Uncle.
• To end it all, thanks to MMK.  Without your 1298 referral points, I wouldn't BEEEE here today.

I just got off the phone with a SVP at a national BPO/Appraisal company we work for.  Government agencies and national lenders are "ghost shopping" their approved appraisers.

Here is apparently how it works.

Jim the Appraiser conducts a series of valuations and they seem a little high.  Brokers are hired to do BPO's to confirm value.  If there is a pattern of pushing the value, at a minimum the appraiser looses the client. 

It has been hinted that brokers are also being used, through some national BPO compaines, to build evidence against appraisers where complaints have been filed.

I suspect this has been going on for some time, but confirmation is now in.

Whenever someone hears that I am also an auctioneer, the question comes up..

"What is the strangest thing you have ever sold?"

Up until last week the answer was all of the equipment and props from an adult photo studio.  You haven't lived until you have explained to someone that it would be inappropriate to offer used sex toys at a public sale.  Anyway.........

On Friday one of my best clients called.  We started as we usually do, joking around.  We have this thing about bad grammar, so we joke about it.  Use the word "be" in a sentence.  He thought this was extremely funny this time.  I obviously didn't get the joke.

He wanted to know what I knew about impregnating bees. I think he is still joking, so I tell him that it probably involves getting stung a lot.

Long and short of it is that this morning we are going to look at a project where we will be selling artificially inseminated bees.

This has nothing to do with real estate, yet, but it is getting interesting around here.