Re: Question for Ed Garcia - Posted by Ed Garcia
Posted by Ed Garcia on November 02, 2000 at 10:12:14:
I think that Mr. Piper did a fine job of as he put it, “take a crack it”, when he answered your question.
Lori I know that you’re an experienced investor and because of that, I think you knew the answer, when you asked the question, and you just wanted to get some other input.
First, you’ve got to know that you’re defrauding the lender. Could you get away with it? Maybe, but you would have to have an attorney, title company, or escrow company work with you and now you have an ACCOMPLICE and both of you are in COLLUSION when DEFRAUDING the lender. Let me tell you my experience with this kind of situation.
If you did one, maybe no one would take notice. Once you start a pattern and created an M/O you’re not just defrauding a lender, it’s D.A. and jail time. Many lenders are Federally insured or sell to a federally insured lenders, which could make it a Federal Offence. But then you have to have another concern. If you ACCOMPLACE is doing this type of activity with you, then they more than likely are doing it wit others and have a PATTERN or M/O of their own. If your ACCOMPLACE gets caught in foul play with others, it can come back to you once an investigation is under way. They will go through every file that you’re ACCOMPLACE has done in the last 2 or 3 years, leaving no stone unturned looking to unvail fraudulent activities committed by your ACCOMPLICE.
I was involved in a $200,000,000 lawsuit with Bank of America back in the 80s along with 42 other brokers and lenders. I committed no wrongdoing, but I can tell you it cost me over six figures in legal fees. Once law enforcement or the government puts an investigation together, everyone is a suspect. Bank of America wasn’t even the lender, they were escrow for another institution called NEMAC which I sold $37,000,000 in loans to that year. But B of A handled the escrows, NEMAC was seized and closed down.
Lori, Piper gave you one answer, another is a “WORKING CREDIT LINE”. Don’t confuse it with an EQUITY credit line. With a working credit line, you can PAY CASH for the properties, you can CLOSE FASTER, both allowing you to cut better deals and make more MONEY. You can SEASON your properties by keeping them on the line for a year and then re-financing them later. It’s cheaper money; in most cases you’ll pay 2 over prime.