Bankruptcy tapdance - Posted by rm

Posted by tony on October 15, 2003 at 20:26:05:

At least you realized the error of your ways. Many people can’t understand why people behave like this. You meet people all the time…in trouble…and they don’t think straight. Its the way we are built. When overcome with stress…the mind shuts down (for survival). We don’t process information correctly, we change our personality styles, etc. WE ARE ALL BUILT LIKE THIS! So…don’t think it can’t happen to you too.

Count your lucky stars that you are in good health.


Bankruptcy tapdance - Posted by rm

Posted by rm on October 15, 2003 at 10:34:13:

Met with seller this morning.

He retired two years ago, lost his entire IRA.

I didn’t ask how.

His current income is $800/mo.

He has outstanding non-secured debt of $16k.

Owes the IRS $3500. No lien on property yet.

His first is $55k at 7%.

The second is $23k.

ARV is at least $140.

House needs $30k in repairs— probably less. The house is GROSS inside- dogs___ EVERYWHERE, the smell of pet (human?) urine and smoke in the air, trash piled high in every room.
I need to go get my shots updated.

It’s a beautiful rehab candidate.

Another investor/broker (whom he doesn’t trust) offered him $7500.

He said, “If someone wrote me a check for 30 grand, I’d move today.”

I told him I might be able to do just a -little- better than the other offer, but he’d have to wait until I was done for a portion of it.

He doesn’t care about his credit at this point.

I’d really like to short the second and re-instate that first- I really like that interest rate.

He’s probably going to file Ch 7, but he was told that he can’t until he sells his house. However, there really isn’t sufficient equity in the house to pay him anything until the second is hammered down, due to its condition.

He’s going to need some help in order to find a place to live. I was going to, rather than give him the money directly, pay six months’ rent (or whatever is required) directly to landlord/apt. manager and to a storage facility for his stuff.

What I’m wondering is this: How can I structure this deal so I can give him some back-end money after I’ve sold it without complicating his bankruptcy proceedings?

Many thanks.

Re: Bankruptcy tapdance - Posted by E.Eka

Posted by E.Eka on October 15, 2003 at 10:54:25:

This old man should be elated that someone offered him $7500. I can only imagine the horrid state of his nasty house. IT reminds me of the animal police that’s on Animal planet, where the cops go and rescue animals living in such horrific conditions. Leaving in a cave is more sanitary.
I think paying part of his rent would be a great benefit for him, as well as having some out of pocket expenses for moving and storing his urine and feces stained personal effects.

I was thinking that if you give this tired old nasty man $10K that would still leave you with around $22K which isn’t too bad. That’s if it would cost $30K to rehab. If you can cut the rehab costs into half, you can give him enough to pay off his unsecured debt which will make his payments lower and keep him from bankruptcy. Either way, don’t lease back to him…you’ve already seen how he treats his own place.

An Apology - Posted by E.Eka

Posted by E.Eka on October 15, 2003 at 11:21:46:

Ok, I just realized that I sounded rude with regards to the guy who’s in trouble. It just escapes me how a sane person can get so complacent with life that they can neglect their household and live in unsanitary conditions. It angers me at times, but in a way it creates an investment opportunity for us.

Good luck with this!

Re: An Apology - Posted by Brent_IL

Posted by Brent_IL on October 15, 2003 at 12:36:40:

Some folks who are severely depressed are frozen into inaction. It’s similar to people in arrears that are waiting for the arrival of the Foreclosure Fairy to sprinkle undo-forced sale dust on their house so their personal status quo will be maintained. They don?t know what to do, so they do nothing. Without meds, they don’t realize their actions are out of the ordinary.

Maybe losing his life’s savings and existing on $800 a month is enough to push him into denial mode.

Re: An Apology - Posted by E.Eka

Posted by E.Eka on October 15, 2003 at 13:25:42:

That’s why I apologized…I realized that same very fact. Now I have my foot in my mouth…