Posted by Sandy FL on March 12, 1999 at 11:19:18:
So Fla Scams - PI** ME OFF! - Posted by Sandy FL
Posted by Sandy FL on March 12, 1999 at 11:04:21:
On Feb 21 in the daily newspaper for Ft Lauderdale, the Sun-Sentinel,
a huge article about real estate investor scams hit the front page.
Actually ONE group of real estate investors who were buying
single family houses and large commercial properties (400
transactions, it is estimated) in the name of a trust, then reselling
them at hugely inflated prices (3 - 4 times assessed value), always
to the same six investors. No work was done on the properties and
obviously the principles have pocketed the money and ran. They
used phony appraisals, false documents, title company involvement,
the whole nine yards.
Todays headlines detail the fact that subsequently there have been as
many as 56 foreclosure cases filed so far, and lower income
tenants getting evicted from these buildings. The county is coming up with a plan of what to do with all these displaced people.
Without even discussing the bad blood this has created within
the affected communities, I just need to vent about what these
fraudulent activities mean to we ABOVE BOARD investors
in my area.
-
it makes sellers more suspicious. Suddenly “real estate investor”
is a dirty word. -
what if you want to take title to property in the name of a trust?
Well here it is splashed all over the front page how investors screwed
people and the name of the trust is repeated over and over. What
was already a difficult concept for some people to accept, now
becomes doubly obscured. -
Don’t even get me started on the lenders. No wonder all the mortgage
brokers are already paranoid with the Fla Atty General knocking on doors
and looking into files, without 56 buildings already in default. How the hell
does one form a working relationship with a lender who is getting major
burned? Lenders require more time to look over ALL deals with a fine
tooth comb which delays our legitimite closings.
Are all cities like this? Anyone want to try to tell me what the upside of this is?? (I know I know, find all those displaced renters a place to live. That, and the HUGE REO sales coming down the road??)
Sandy FL (Scam Central)
Here are the web addresses for the articles if you want details:
Feb 21 “Odd Deals” article: Email me for a copy, the original copy is no
longer available on the web for free. Here is a snippet:
"A typical transaction took place in Dorsey Riverbend, a predominantly
black neighborhood, where the landscape runs from vacant lots and
boarded-up buildings to neatly kept houses with well-trimmed lawns
and abundant gardens.
The trust bought a decaying one-story apartment building at 1209 NW
Second St. on Dec. 17, 1997 for $70,000, according to real estate records.
Two weeks later, the trust sold the same building to Joseph Vegazo
for $192,000.
also… Few of the buyers seem cast for the role of real estate tycoon.
Blanchette, for example, lives in a small house in Tamarac. He is not an
officer of any corporations. Seven years ago, he pleaded no contest to
charges that he sold crack out of a used car dealership in Fort Lauderdale,
according to court records. But now he has assembled large holdings in
northwest Fort Lauderdale, spending $2.1 million to buy 14 properties
from the Kratenstein Trust, according to real estate records.
Vegazo earns $7.71 an hour as a part-time recycling aide in the Broward
County Office of Integrated Waste Management. Despite his modest income, he has purchased 83 properties for $15.6 million, according to county records."
March 9 “Officials seize papers; real estate fraud suspected” http://www.sun-sentinel.com/news/daily/detail/0,1136,11000000000050891,00.html
Today - March 12 “Tenants Caught in a Trust Squeeze” Article:
http://www.sun-sentinel.com/news/daily/detail/0,1136,11000000000052839,00.html
Similar thing happened in MN - Posted by Jim-WI
Posted by Jim-WI on March 12, 1999 at 21:18:32:
Seems something similar happened in Minneapolis, MN. Some realtors bought homes at below market value… paid a appraiser to give an inflated appraisal so the house could be overfinanced… the realtors helped lower income people buy the homes with the new financing banks are offering… and now the people are in foreclosure and finding out that the homes aren’t worth what the appraisers said they are…
What ticks me off is that the local paper wrote articles about how flipping is a bad thing. the newspaper went so far as to tell people to be weary of investors flipping!
it just burns my hide when people who don’t know what they are talking about write about things they know nothing about.
sorry it just bothers me
The Potential Exists EVERYWHERE! - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on March 12, 1999 at 16:02:04:
Sandy,
I haven’t heard of any widespread fraud here in Arizona. However, I was in touch with an investor recently who was quite open in telling me that he, and several investor buddies, would flip properties back and forth to each other in order to increase their value. I don’t know about the legality of this, but it certainly made me cringe. I immediately wrote the guy off. I don’t care to do business with people like that. It’s apparent to me that there is enough money to be made legitimately without artificially creating a market.
It’s true. The few can spoil it for the many. We have to battle on in order to overcome their tactics. Genuine investors provide a valuable service.
Bill
Re: So Fla Scams - PI** ME OFF! - Posted by Sandy FL
Posted by Sandy FL on March 12, 1999 at 11:17:30:
Ok, wait… I did want to point out a couple ways this
investor or group of investors was really STUPID. (In
addition to defrauding banks, additional stupidity I
want to point out)
First, apparently the name of the party holding
beneficial interest of the trust (Howard Kratenstein)
was used AS the name of the trust (The Howard Kratenstein Trust). HELLO! Not too private there. I will give you one guess whose photo is in the paper today?
That, and the fact that the same trust name was used on
title of all these holdings?? All 400? Another trust no -no. A different trust for each property. A different name for each trust. (Of course, if he had done it that way, it would take them YEARS to unwind all this stuff…)
Just had to add that. STUPID STUPID STUPID !!
Have a nice day, LOL
Re: So Fla Scams - PI** ME OFF! - Posted by Rob FL
Posted by Rob FL on March 12, 1999 at 11:17:11:
Sandy,
I work for Attorneys’ Title, the largest title company in Florida. About 80% of our fraud and forgery claims come out of Dade and Broward Counties (Miami and Ft. Lauderdale). From what I am told by our claims department attorneys, those 2 counties have more frauds and forgeries than any other area of the United States. But at the same time, those 2 counties by far pump out more title insurance revenue than any others in Florida.