Real Estate when spoken of and even practiced in the public eye remains in two categories i.e. buying and selling. However it is much more than that. There are many categories and sub-categories that come under the main heading we call Real Estate. Hard-money lending and property evictions are our topics today
HARD MONEY LOANS
These are loans based & made on hard equity meaning original cash deposited into the property, when it was done, what the property is worth now, demand, viability & use then assessed critically with all benefit of the doubt going to the lender. Why? Because hard money lenders venture into worst-case scenarios
EXAMPLES of ASSESSMENTS
What if the property is trashed or destroyed? How much is the first & what payments are required? What if the borrower defaults & declares bankruptcy? What if the market crashes & wipes out soft equity? Acts of God and acts of man are thrown at the lending scenario for the shrewd money-lenders to make decisions by
SOFT EQUITY or NORMAL APPRECIATION
In a normal market at large, Real Estate like water will seek its own level. As the landscapes change so does the outcomes. What went up today can go down tomorrow. Waiting for a Real Estate cycle to come again is not a viable choice for the average player in Real Estate. Hard money lending factors this in....
MONEY TO "PLAY" WITH?
Hard-money lenders are people with money who can wait-it-out, pay the first mortgage payments or pay off the first loan, make improvements or rent out the property & either keep it or sell it as it suits them when and if they foreclose.They are short-term & long-term strategists. Having the necessary funds to loan out & weather any cycle produces enormous wealth
THE DARK SIDE of REAL ESTATE
I have seen businesses foreclosed upon, rental properties and residential Real Estate foreclosures. Assets are seized, assignment of rent clauses are activated as well as-Trustee sales some being fixed too. Businesses are shut-down, people are evicted and for renters a new set of instructions on who to pay.
THE SET-UP
It is essential that one has the vast experience and paperwork as well as a legal team in place for the more difficult maneuvers that can come about when taking over or back an asset. In evictions, it can get nasty and at the same time pierce your heart to see someone suffering and wiped out. Only the front-line suffers so
IT'S NOT PERSONAL...IT'S BUSINESS?
When families are involved, children and the elderly it becomes personal to the people on the front lines but to the lenders behind the scenes it remains pure-raw-business. The paperwork that drives the foreclosure is based on contract law and enforceable regardless of feelings. Still, face to face interaction wears on you
MY EXPERIENCE
I worked for a hard-money lender (one of his three businesses) for 12 years. I was young & naive when I started & just followed instructions which were not hard to do. The hard part was seeing the borrowers who couldn't make good be beaten down, forced to beg, lay-down & demonstrate what no hope looks & feels like. I had no words to describe it or even repeat it to someone else except the guy I worked with
I WASN'T ALONE
I used to have to meet-up with the police departments, U.S. Marshall's office, armed-peace-keepers & other officials who were hardened, cautious & efficient about doing the job of serving out a court order. It can be intense because you never know what desperate people will do. Anything goes when someone goes crazy
FRONT-LINE DECISIONS
I would go out with another fellow, two pick-up trucks and given implicit instructions. There were many times we were fore-warned of a threat or fight and would give no-ground if force was met with force. However, where there was families involved, houses full of clothing & furniture plus children, I phoned in
THIS IS NO SURPRISE
You have to understand what the people who carry out these court orders are thinking and feeling. They have the law on their side for one thing. For another, multiple non-stop notices are given, court dates are scheduled (most go ignored) & people know they are getting evicted. Five day notices are given in advance
LYING AND DEFEAT
However, when you see people either lying about knowing anything about the eviction (which makes everyone take a harder stance) or just waiting to be thrown out because they have given up, it produces a hardship on all involved. Denial, fear, hopelessness and defeat respect no persons.
YES & NO
Questions like can we get the babies diapers, clothes and blankets need to be answered. That is when I call it in. It all depends on the attitude of the people being evicted. My boss would say yes to the question but NO to everything else. That meant we would load trucks and take households of furniture to a warehouse
HOW TO REDEEM PERSONAL ITEMS
The law allowed for 10-days to pick-up your stuff but you had to pay the costs of moving and storage. If not, the property would be advertised for sale for 3 weeks and then if no takers or response be disposed of in any way shape or form by the lender/landlord. Very tough business to be in...
CAN'T DO THIS...
I have had people quit the eviction team stating they are not going to have anything to do with children being mistreated etc. I get it. The police get it too. This is the dark-side of foreclosure and property management in Real Estate. My approach at that time was silence and repeating what I was told to say
EPILOGUE: Decades later, I wondered about that multi-millionaire I used to work for and what was his thinking? Motives? Why? He was a product of the depression & two world wars and knew suffering. Having amassed a fortune why do this? Corporations, partnerships and REIT's do these things we know. This man died & his wealth was dispersed to his heirs and their heirs too. But that is another story
