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About W. J. Mencarow

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A Checklist For Buying Non-performing Notes?

Is there a checklist for non-performing notes to tell the good from the bad? 
— Dan Bal
 
There is no checklist I’m aware of, but be sure you get this information:
 
1. What is the value of the property the note is secured by? Look at both full market, and REO value comps. Think about who the buyer would be. Is this an upscale area where the buyer would be an owner-occupant or a investor-driven area where the likely buyer is an investor? Make sure you are buying at a discount to whatever your likely value is.
 
2. Confirm property taxes and municipal lien amounts and especially any past due.
 
3. Confirm chain of title is in order — meaning the firm you are buying the NPN from has the assignment recorded in the county — OR if there are other unrecorded assignments you are confident that your seller has all proper assignments and legal
authority to assign the loan to you.
 
Value and title are the 2 major things to review. IF these are correct you are a long way towards picking good deals.
 
Jack Krupey, Gemini Capital Managers
 
This article appeared in the August, 2015 issue of THE PAPER SOURCE JOURNAL.  To read a sample issue and for subscription information, go to http://papersourceonline.com/  and click the tab "Paper Source Journal," then "Read a Recent Issue."  For more info, click the tab "Paper Source Journal," then "Info/Subscribe."  
 
With your subscription you get access to THE PAPER SOURCE REGISTRY OF NOTE INVESTORS.

 

The War On Cash

Imagine going to an ATM or your bank and being refused a withdrawal of more than $67.00. Or being denied access to your safe deposit box. Or being told by the government that it plans to confiscate a third of your savings! Greeks didn’t have to imagine — it happened to them last month. And this is not some third-world country.
 
Of course that could never happen here…or could it?  
 
A little-known fact is that Greeks who had prepared for bank runs by withdrawing cash and buying gold and silver bullion and then lodging that bullion and indeed cash into safety deposit boxes have also been caught up in the draconian capital controls. “Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place,” said Nadia Valavani, a Deputy Finance Minister.  
 
The only reason to put access to safe deposit boxes under capital controls – measures which were agreed between the government and the banks – is because the banks and governments wish to retain the option of confiscating the contents of those boxes should the crisis deepen.
 
As the Greek situation demonstrates, the convenience of ease of access to a local safe deposit box can be offset by the fact that governments and banks can lay claim
to their contents at the stroke of a pen.
 
It would be unwise to view Greece as an exceptional case. Such complacency is not shared by respected economic historian Marc Faber who recently warned in Bloomberg that “Greece is coming to your neighborhood very soon” because “the world is over-indebted.”
 
This view has been echoed by many well-placed observers from HSBC, Goldman Sachs and Fidelity in recent months. Most recently Fidelity’s Ian Spreadbury made the highly unorthodox recommendation that savers should keep some precious metals and cash “under the mattress.”
 
I suggest if possible you put away a few month's living expenses in cash (and perhaps some small gold and silver coins) where you have 24/7 access without have to ask anyone’s permission. That won’t cost you a penny, but you just might be glad you did.
 
 

https://mises.org/library/war-cash-why-now

Need to evict deadbeat tenant? Let your Health Dept. do it!

John Merchant, JD, originally wrote this article for THE PAPER SOURCE JOURNAL.  It’s an ingenious way to deal with deadbeat tenants!

Need to evict a deadbeat tenant?
Let your Health Dept. do it!

by John Merchant, JD

john-merchant-jd-50“What? Now how in the world would that work and why in the world might the Health Dept. be interested in doing that? And what would give them that right?”

Well, in many (most? all?) cities and counties around the country, it’s a violation of their Municipal Ordinances or County Regs and state laws, and their Health Regulations in particular, to live in any residence without lights, water or sewer or septic all working and in order.

So if their Health Dept. learns that anybody in their fair city is doing that – living in a house or apartment without lights, running water or sewer or septic – they’ll break all speed records to get those people out of that property, right now!

Frankly I did not know about this and it had never even occurred to me that this situation might work to the advantage of the Landlord until I experienced a series of events that woke me up and taught me a valuable lesson.

Several years back I was talking one day to a friend and he mentioned he was sure sick of dealing with one of his rentals, as the crummy tenant, a little unemployed woman who he suspected was a druggie, had not paid him any rent in months and had just told him that she didn’t intend to pay him rent and defied him to do anything about it.

I told him I might be interested in taking over that little property on right price and terms and I soon had the place in my name for a low purchase price.

Not that I knew any better than he did about how to go about evicting that bad tenant except through the usual costly and prolonged legal fight, during which time the Tenant would likely proceed to tear up the house, but I set out to contact the tenant and see for myself.

So one early winter evening I was at her door to talk to her if possible.

She came to the door and I proceeded to tell her I was now the owner and asked her what her plan was to catch up on the overdue rent and get current.

She told me basically the same thing she’d told my seller and sneeringly said she dared me to evict her.

I was standing there contemplating my options and thinking what to do next when I happened to see something really interesting.

She was standing in her front door, and behind her I caught a glimpse of a car battery on the floor, with a wire running to a battery powered lantern hanging from the ceiling light fixture and I remember thinking “How Odd! I don’t think I’ve ever seen anything like that before and wonder why in the world she’s hooked up that contraption.”

So she and I parted ways and I still had no clue as to the best way to get her out and make that property start producing rent.

A couple of nights later, like maybe 3 or 4 am, it came to me (hey, I’m kinda slow sometimes!) WHY she was using that car battery and lantern.

Maybe her lights were turned off because her electric was off? And just maybe that was because of a delinquent, non-payment of the light bill!

Sure enough when I called the power company the next day, they confirmed that her electricity was indeed turned off and had been for months and they were very interested to know if I’d help them collect their $1000 + electric bill!

And then it came to me to wonder if that practice of using batteries for household electric power was maybe a violation of some kind to city ordinances. Maybe a fire hazard or something?

So I had a look at our city ordinances online and decided that this might be a concern to the city Health Dept as they might view it as an unhealthy or even dangerous way to live.

When I got one of the Health Dept (HD) folks on the line, they were immediately very interested in hearing about this situation and the HD employee I was talking to informed me with some emphasis that this was indeed an illegal, unhealthy and dangerous practice.

That HD employee immediately got one of their Health Inspectors on the line with me and he and I made a plan to go to the house within an hour, with a city police officer, and confront the offending tenant.

So within an hour we three met at that house and the police officer knocked on her door and ordered her to vacate that house NOW!

So while I was leaning on her front gate, just enjoying the little drama, she was forced to get her coat, leave the house and hand the keys to me.

She was a little more pleasant to me than she’d been earlier and asked if she might give me a call to make arrangements to get her things out of the house.

But my goal of getting her gone had been accomplished and she hadn’t even had time to further trash or destroy my little house and that was all I wanted.

So if you have a similar situation where you even suspect the Tenant has had his/her power, water or gas heat turned off, go check the meter on the outside of the house (probably can only do this practically if it’s your rental property) and you may find you have an easy way to evict that tenant, as I did.

In fact, think about how any occupant of any residence who’s causing you trouble, might well be in obvious violation of his/her/their law…such as maybe too many people living in the house, no working door, no lights or heat in the house, etc.

On any such situation it would just take you a few minutes to give your health dept. a call and see if this might be something of interest to them. You might find out, as I did, that the tenant or resident of such property is in big violation of your health department and the health department would immediately evict them for such. ##

(Editor’s note: always make sure you check the law in your jurisdiction and seek the advice of a legal professional before engaging in any such activity.)

john-merchant-jd-75

John Merchant, JD, is an experienced lawyer who’s been helping clients solve their legal problems for many years.  He is a frequent author for THE PAPER SOURCE JOURNAL and an authority on the use of tax sheltered retirement plans to legally invest in real estate and commercial realty (and has written a book dealing with use of IRA for RE investment – http://store.papersourceonline.com/your-ira-can-buy-notes-more/) and has spoken to a number of investment groups on various legal topics. He has held Real Estate and Securities Brokers licenses and managed real estate and securities offices. He has been the featured speaker on The Paper Source’s Note Boat, a B.C. to Alaska Cruise for professionals dealing with promissory notes and the problems and opportunities in that field.

 

10 Principles Of Financial Independence

1.  Save consistently by living on less than you earn.

2.  Study the investment methods and strategies of successful people, and seek advice only from those who are competent — through their own achievements — to give it.  Learn from people who have earned the right to teach.

3.  Learn to apply the principles of compounding, discounting and leveraging.

4.  Never bet on a loser because you think its luck is about to change.

5.  Don’t invest in anything that eats or can be driven, sailed or flown away.

6.  Don’t invest in anything you can’t explain to your spouse.
(Stolen by permission of my friend John Schaub, whose advice has made me a lot of money; and, more importantly, kept me from losing a lot of money.  His website is www.johnschaub.com)

7.  Reinvest all proceeds until you achieve financial independence.

8.  Never get involved in anything that promises easy or quick riches. Trying to get rich quick is just a form of gambling. “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.” (Proverbs 21:5).

If you try to get rich quick you’ll get poor even quicker.

9.  Be constantly on guard against every form of greed.
No matter how much you have, wealth never brings lasting happiness.  The more you have, the more you want.
     “Take heed, and beware of covetousness: a man’s life does not consist in the abundance of the things which he possesses.
     The ground of a certain rich man was very productive.  And he said to himself, ‘What shall I do, because I have no room to store my crops?  I know: I will pull down my barns and build bigger ones, and there I will store all my crops and my goods.  And I will say to myself, ‘I have so much laid up for many years; take it easy, eat, drink, and be merry.’
     But God said to him, ‘You fool, this night your soul shall be required of you: then whose shall those things be which you have stored up?’  So is he that lays up treasure for himself, and is not rich toward God.” — Luke 12:15-21

10.  Get Started! A good plan today is better than a perfect plan tomorrow. Unless you were born wealthy, you will have to sacrifice financially during part of your life.  It is much better if that happens by choice when you are young than by force when you are too old to recover.  The decision is yours.

     Based upon material originally written by Dave Smith and used with his permission.  PUBLISHED IN THE MAY, 2015 ISSUE OF THE PAPER SOURCE JOURNAL.  FOR INFORMATION AND A FREE RECENT ISSUE:  www.PaperSourceOnline.com 

Why some note investors won’t buy in certain states

 If you wonder why some note investors won't buy notes in certain states, this article  will tell you why (thanks to Denny Stanz' CA Notebuyer Newsletter:  www.CaliforniaNoteBuyerLLC.com

 

http://Realtormag.Realtor.org/daily-news/2015/04/20/average-foreclosure-time-620-days?

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