I was looking at some short sale opportunities today. It's a rather large portfolio with a pretty typical trainwreck story. Today I looked at 20 properties in some old industrial cites of SE PA. It's amazing the decay of what was once some amazing housing stock, as far as craftsmanship goes. It is really sad what it has become, and the destitution of the population living here.
I must admit sometimes I wallow in my own self pity of how a failing business can bring me down. I had a wake up call today. I may have some financial struggles, but I am not struggling to survive. Looking at these properties today I saw what true struggles are. The 1st building we went in to was obvious that people were breaking in to drink, do drugs, and crash. There was no power or water in the house, and it appeared they used candles for light. The next property around the corner was quite startling. The front door was open, and the house was rather clean. The power was on, the water running, and it appeared someone was cooking in the kitchen when we walked in. About 3 trash bags worth of clothing and a few jackets were lying right by the front door. A few dolls and a small doll house were on the living room floor. There was about 3 or 4 days worth of basic food in the fridge. Upstairs there was a single mattress, and a tiny air matress, and TV with DirectTV box hooked up. This is a home that was supposed to be vacant and not cleaned out yet. The tenant was evicted in May. There was even mail sent to the address concerning her food stamps. When we pulled away we saw a woman and small girl appear on the sidewalk from the neighbors. We drove around the block and saw them standing out front. It was obvious they were afraid of what happened.
The next few properties weren't secure either. It appeared all the back doors were pried open, and the locks on the front doors were changed, because none of our keys worked. The one house looked like someone was dealing out of the kitchen since it was tough to get out back, and the train tracks were right out back for a quick getaway. I actually chambered a bullet in the barrel of my pistol. I have never carried it chambered before. The neighbors were all checking us out with concern. Two white guys taking pictures and going in and out of buildings seem to make people nervous. The blight of these areas is worse than ever, yet for one reason or another alot of people still choose to live there. The rent must be really cheap.
These properties were bought between 02 and 04. They were bought pretty well, and it apperars the guy did a lot of cash out refi's(who didn't, I know I raped a few buildings to buy some more) The amount owed on these properties is rather staggering, compared to what they are worth. There was most definetly some fraudulent appraisals pushed through, by greedy underwriters. Our offer prices might be 25% of the debt owed, and even then I don't know if they are worth it. To be quite honest, if these properties go back as REO's I truly wonder if anyone will ever live in these properties again, or will they just be boarded up, and decay to nothing. Slowly but surely a once thriving industrial city will become functionally obsolete, and decay to nothing. I have seen a lot of $hit in the 13 years of being a RE investor and landlord. What I saw yesterday was the worst I have seen.
Subscribe to:
Post Comments (Atom)
wow. Depressing at best. Surprised you didn't name the town but I could name a few.
ReplyDeleteI can take a guess, but the important thing to note is that there are multiple cities and regions with these problems.
ReplyDeleteI wish I could say this surprises me but regretfully, I can't. Without getting into the politics of it all {insert cough here] , I fear the worst is yet to come. While all we hear on the news is how the recovery is happening, I wonder where these knuckleheads are getting there information. Obviously from the politicians who want to public to "PERCEIVE" they are working in the best interest of those who pulled the levers for them. As I have written in many various posts and blogs, We (the American public) are being led to slaughter. The majority are just following directions. But who is making the directions (aka. Policies). The House, Senate, Whitehouse, and of course the main stream media. While AMERICA FALLS APART, they are jumping on Jumbo Jets, Impressing (themselves) with more media coverage and House & Senate meetings yet they don't even READ the bills they are debating and then being coerced into signing... Let alone understand what the ramifications are. What's worse is they "THINK" they have a pulse for what middle America is feeling.
ReplyDeleteEverything is Backwards... I have clients who [ STILL ] have great FICO scores, a good job history, Money for a down payment yet can't qualify for a loan.... ANY LOAN.... Even their credit card companies are cancelling their accts even though they have had the account for 12 years without a missed payment, and I Quote, "Just Because"
Then I have a sector of clients that are the exact opposite.... Disastrous FICO, Pathetic Job history (some on Unemployment or Government Assistance, No Money (actually in debt up to their eyeballs) .. And ., IMHO no intention on paying their mortgage. they even say to me, "If I can get the loan and I can't afford to pay, That's not My Fault" Hmmmm One told me that if they are denied a loan, they will have ACORN help them get the loan. When I told them I can't work with (represent) them any more, They threatened me with a Discrimination lawsuit again taunting the name ACORN.
Most of my Best Friends, Hard working friends, are so frightened of not only of losing there jobs or cut backs, but even if they want to be a homeowner. Why ??? they know that the new buyers (see above) that will be purchasing the homes in their neighborhood at firesale prices will quickly go into default. And these buyers "Know how to Stay in the home" (delay foreclosure) for YEARS all the while not maintaining it and letting the yard turn into a jungle, and having abandoned cars overtake the street.
By The Way... This is in Suburbia.. Not the Ghetto (yet)
Without rehashing the past, and pointing fingers on how we got here, We (The Frigin' Administration) Needed to just let the MARKET (what was at one time a FREE MARKET) correct itself. Yes.. It would have been painful but it would have worked. What we're about to see will make Painful look like Utopia.....
WAKE UP PEOPLE... Stop following the Heard to Slaughter...
Stand Up and Be Heard.......
Our Children and Their Children are the Unspoken Victims......
If you won't speak for yourselves... PLEASE SPEAK FOR OUR KIDS and Future Grand Kids
If you want to read my blog, Write to TheFacts@DavidWitsen.com
I never purchased in lower end neighborhoods. I always went for higher end properties even though I knew there was great profit to be made in the low end. I used to own 22 homes in Northeast Philly. Now I own only 2 as I have been moving my money and addresses to bucks county for years.
ReplyDeleteI became frustrated mostly with tenants not paying, the cities bullshit and the traveling. The two I still own there were the only 2 cash out refi's I did of the 22. Both of them today have no equity and barely break even. I cant even remember what I did with the 150 k I pulled out.
Why not mention the locations? That is important info to have for some landlords. Anyway the city and I have gone through a divorce. They recently frooze my landlord license that I needed for yet another eviction. When I wasted 4 hours down there trying to find out what was the problem it turned out to be their 2008 taxes. I had filed for an extension but they did not care. I had to write them a check based on 2007 numbers for $7000.00 just to clear this shit and get my licenses. I later went to my bank and stopped payment. My accountant just finished 2008 and I owe them under 2k. Anyway my half day at L and I was a real eye opener. I was never more sure of my decision to leave Philadelphia. I have the wrong color skin to be down there trying to work something out. I felt the anger and racisim or should I say reverse racisim. Any way they can keep the fucken city. I will put my money somewhere closer too home where I feel I have some say in what goes on. I have more connections with people to help me when problems come around and a judge who hears my eviction cases and knows I am a voter.
As for the grandkids comments I keep hearing all the time I write this. Better start worrying about ourselfs instead of or kidas and grandkids. What is happening today with our goverment is happening to us now and I for one am ready to do what is required to stop this shit. I just have not figured out what I will or can be doing. For now I am using Facebook, email and word of mouth to educate and motivate people. Any ideas I would love to hear them.
Sincerely,
Phil Falcone
267-988-2000
Falcone@comcast.net
Glad to see you on here guys. The city in Question is Reading Pa. What I saw truly did move me. It seems we are all on the same page here. These times are indeed strange. The shit the governments from the borough level to the Fed. gov't is absurd. I fear for my families financial well being, and will not take any further abused lying down. It's time to call our reps, and let them know what they must do to get our votes next time around.
ReplyDelete