Starting Real Estate

Red-tagged properties are those designated as structurally unsound. Here’s another cool trustree sale story from the teacher.

Up in a nearby affluent neighborhood, a guy decided to build another story for his house. He did it himself, without permits, and the work that came out, looked like it came from the wrong end.

Somehow the city found out and red-tagged the property. The guy was sick. Real sick, so the state was nice and only red-tagged the upper floor. However, what could he do to get rid of it? It would have to be demolished, but he didn’t have the money for that and the property lost its value due to the red-tagged second floor. So the guy talked with his lawyer, who had the following idea, “Save what you have and move to a place where they can help take care of you. Foreclose the guy. But whatever you do, keep your mouth shut. Don’t tell anyone. I mean not a word.”

So it went through, the guy trusted his attorney, and had the sale go through. Ironically, a bunch of lawyers bought the property. Since it’s a bidding system and the foreclosure demands a set amount, they paid enough for the guy to actually make a profit profit.

What happened? Well the guy’s lawyer was a licensed real estate attorney, and knew that with trustee sales you can choose not to disclose anything, but you may not mislead. Well by keeping silent and out of the way, the guy couldn’t do any misleading. Foreclosure fun indeed.