S.E.C. Real Estate Observer

The most disappointing issue for us old “true exchangors” (before cash-out was available on either end) is that listing postings don’t provide enough information about the intent and circumstances of the owner who wants to change current ownership. Although some state laws and professed broker ethics suggest that such private information is detrimental to the […]

I got a big check today in my California mailbox that came from a closing in Massachusetts. It was the result of an investment made (together with S.E.C. Tom Peterson of Glendora, CA) through the son of an S.E.C. member I had met when he was about 10 years old. It was a buy, lease/option-back, […]

The secretary came in to say that there was a man outside who obviously did not practice adequate personal hygiene and that he wanted to speak to a real estate agent or broker. She said she would not go back outside to relay an answer to him and that I would have to take care of it.

Consider a standard $1m income property that a seller bought years ago for $700k and since depreciated to a book basis of $500k. The sale of this property could result in possible exposure to a capital gain tax on $500k. A standard proposal by a buyer would be to offer $650k cash from a new […]

S.E.C. founder Richard Reno used to suggest that exchangors should not spend effort on any clients other than “counseled don’t wanters.” His most animated protestation was to never represent “thieves.”

The most disappointing issue for us old “true exchangors” (before cash-out was available on either end) is that listing postings don’t provide enough information about the intent and circumstances of the owner who wants to change current ownership. Although some state laws and professed broker ethics suggest that such private information is detrimental to the “Seller” and should not be exposed…

In the process of acquiring a building to “double-clutch” to our investor, we found the existing loan-of-old in favor of an insurance company that had financed a national tenant 20 years ago at 4 1/2%. The tenant was now gone, the tax shelter syndicate from across the country had abandoned the property…

Able walked into our office to hear about how to exchange. He had bought a promotionally sold lot in a distant “recreation” development on terms a few years back. He paid $11,500 for the lot and still owed $7,218 and was paying $115 per month including 7% interest. A quick check of its sale value found the lot would sell for $4,500, more or less, so Able had a negative equity (not uncommon in today’s market), although no one discussed those facts with Able.

The client is desperate to transact the listed property to get off of the loan payments and get enough cash to solve some other issue. The listed price is $600K, but the current market will only bring $500K and the client is still in yesteryear on values. The loan is $350K. An S.E.C. broker knows that there are many ways to get people to their objectives over the resistance of advisors, lenders, third party influence, etc. One solution is to disguise the fall in value and avoid the seller’s lack of reality.

The TV ad for Priceline “pick your own price,” using humorist William Shatner of “Boston Legal,” encourages the consumer guy to “no, no, don’t settle, keep negotiating,” until the guy gets the $250.00 hotel room for $99.00 = “Now you’re negotiating!” …Probably the same advice is appropriate for today’s real estate market. What was a GREAT deal two years ago is not even close to a FAIR deal today. The few left with cash and credit are sitting on the sidelines and don’t know what to do, or they want both your daughters and your mistress or they won’t play.