(post by Dee) Remember our previous post about the Hard Money Lender? Well, his story took some interesting twists. After showing his property to a new investor, 2 offers were made, one $50K, another $75K higher than anything he got before – both he turned down the same way… Don’t say no, didn’t counter, and certainly did not give us any idea of what he wants. To give you an idea… our first buyer gave offer of $500K. The next one came in at $550 and $575. The building had 20+ DOB and ECB violations and two tenants with eviction notices (good thing because they had not been paying rent). In the end the income would have been decent – half of the units at market rent, half less than 50% below (rent-stabilized apts) – but not high enough to justify anything over the prices that the investors were offering. This was a property with problems and half-good rents. One other Realtor in the area told me he had heard from the Owner that he wanted to net $625K. “No way he can get this number”, but we all know he is a nut by now. He claimed he could remove all violations in a matter of month (a lie!), and that he was going to renovate all empty units during the same time (another lie!) Sooner or later we came to realize he was not only wasting our time, but playing us like children.

A new investor I know came along, saw the place and decided that in order to pay more, he’s have to investigate what could be done to increase income… evict or buy out tenants as the most logical routes. While researching the property and speaking to the tenants (yes, he somehow got to meet them all!) he told us he learned a few things: That the Hard Money Lender actually never foreclosed on the previous owner – that was a lie he invented. He simply purchased the building for a bargain price at an auction. He was also up to some very dirty tricks. His lack of commitment to selling allowed him to feel out the market. At the same time, he apparently began applying common types of harassment - cut off utilities, and mislead tenants. How? He’s encouraged all tenants to NOT pay their rents, in an attempt to gain rights to EVICT THEM. He told them there really was no management company or a rightful owner, so “why pay rent; to whom?” No rent paid - you’re out and now we can get market-rent-paying tenants. He’s allowed the electric to be shut off, and allowed hot water to discontinue in one of the units. This rouge slum lord seems to have his own dirty ways to succeed. Keep in mind that his actions are 1) virtually impossible to prove and 2) mostly legal. Not such a “soft brain” after all!

A final offer from one of our buyers was all cash, but in the same range. He finally “countered”… wrote $695K on the same fax page we had sent to him with the offer. Basically a price nobody would pay in this market for his property. But now, knowing that he was just playing games, we crumpled his fax and threw it away in thrash. Not worth anybody’s time.

COOL OR FUNNY CITY PHOTO OF THE DAY

Development and change aren’t good for everyone… not in the short term, anyway. Only six months ago (and for the past 30+ years) these folks’ house had a backyard overlooking a Brooklyn neighborhood. The view was open for blocks and the owners used it daily to relax. One day a warehouse was built next to them and what used to be a place to kick back and waive at neighbors passing by for 3+ decades suddenly resembled a jail courtyard.