I received a very disturbing call earlier this week and although it resulted in a listing for me, my new clients are in some very tough financial trouble.
A few weeks back an internet lead was forwarded to me through my site that is unfortunately becoming more common in the Vancouver Washington real estate market. An owner of a Vancouver Home had asked me to contact him in regards to selling his home and he had asked if I was experienced with short sales. I sent him several emails and tried to get him on the phone at least a dozen times with no luck.
This week my phone rang and when I answered it was him and his wife wanting to interview me over the phone. Talk about pressure! A blind interview with no advanced notice. Luckily I had his call sheet right next to my phone and I was ready to discuss his situation with him. This is what unfolded as we were talking:
He and his wife were involved with an investing club a few years back when a real estate agent from Vancouver Washington was the guest speaker at one of their meetings. This agent showed the group a new townhome community that they were building and told them how they had put together an investors' package for out of state investors. Did I mention that my client lives two states away? The short version of the story is that the investors were told that the units would rent for about $1600 and were sure to appreciate a fast rate. At the time, parts of Vancouver Washington were appreciating a 12 to 13% annually. Unfortunately this project isn't in one of those areas! This project also wasn't in the area where townhomes were getting $1600 per month in rent!
Are you seeing where this is going?
Oh yeah, there is one more thing, my clients have never visited the property! They have owned it for two years and have never set foot inside. I am not sure if they have ever been to Vancouver Washington!
So the townhome has been rented for the past two years at $850. They are using the agent's recommended property management group, paying them a little under 10%, and they have never increased the rent. They have been paying the balance of the mortgage out of their pocket every month. They financed 95% of the purchase with a first and a second mortgage.
While I know that the agent involved is shady (I know who he is and this isn't the first deal that has threatened to bankrupt people) I can't help but think that these investors were getting into a deal that could have easily been avoided with just a little bit of homework. For those of you who are wondering, YES, I scolded them. I read them the riot act and I even ended with one of my mother's favorite lines, "Have you learned anything from this experience? Good. Now tell me what you have learned."
It is lucky that they ended up getting me on the line as I am one of the more experienced and successful short sale agents in Clark County.
Do you know anyone looking for a drastically discounted investment property?
Sorry for the lack of pictures guys. I am working in a model home on my laptop. Virus protestion is going crazy and I can't seem to upload any images. Hope to add pictures later.
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