I can’t provide all of the details of a Ponzi scheme. I am satisfied that check kiting is much simpler. A Ponzi scheme requires a great deal more energy and imagination, but some of it I understand. A Ponzi scheme begins with an asset. It is important that the asset have a value which is not easily discernible. For instance, if I could persuade you to invest in an oil well not yet drilled, and ...
I’ve been told by people I respect that this is the wrong article to carry a New Year’s message of hope. They’ve told me the message is way too heavy, and not fun. But if I care about the reader, and feel strongly about the message, may I be excused again for bringing the elephant in the room into the conversation, just briefly, even if the elephant weighs down the discussion? That being said, ...
You have no idea how many times I’ve been asked this question in the last few months. Countless investors have contracted to buy properties believing they would never have to close the contract, or if they closed the contract, that they could soon flip the property for a profit. The market has stalled, and nothing sells easily; those people who were happy to buy would now be ecstatic to be away ...
[One of my greatest wishes is that we all take pride in our real estate. I get the sense that people don’t have much respect for real estate when they are unsure of its value. This is a time when it’s hard to know what property is worth, but I have long believed that one of the quickest and cheapest ways to make bad property look good, and good property look great, is simply to landscape ...
Realtors are called on to list properties daily. That’s what they do. Every newspaper is filled with articles about subprime mortgages, impending foreclosures, and generally, property which is over-mortgaged for one reason or another. A significant percentage of the properties listed can never be sold without additional cash at closing because the total amount owed on those properties exceeds the ...
My mama was the consummate southern lady, and therefore, without the need to say, also a superbly able cook! Now, I know that the cholesterol content was out of sight, and that a cardiologist would tolerate us eating a good Southern meal only about once a year. Then, we were unconcerned about that, and one of her favorites, and mine, was “beef” stew. I’ve learned that the contents of those stew ...
I have a serious prejudice here. I believe every American ought to own his or her home and ought to take serious pride in it. It’s a place where one goes when feeling terrible. We go there to think, to wish, and to take off the shoes that just don’t fit well. That’s important. We have a new threat to home ownership that bothers me. Society has created the “reality” that we must all drive a big ...
Traditional Real Estate professionals have known all along that real estate flips do not establish value. The things we’ve heard for years, quality of construction, location, landscaping, and even subjective desirability, all have a place in determining value. What the last guy paid for that property, or similar property in a recent transaction, also plays a role. But we now know that the last guy ...
I was wrong. Last month I wrote an article entitled “Specific Performance May Be No Performance At All.” Nothing could be more accurate than the title of that article. But the article was not. Before it was published, I sent the draft to a friend who responded by saying something like, “Are you nuts? Did you really go the law school?” I did some research and learned that my draft of that article ...
The standard form contract used by Realtors, the FAR-8 as it is known to Realtors, does not even remotely protect the interest of a Seller, in most cases. In the event of breach, the remedies section of the form calls for the non-defaulting party to either recover the earnest money deposit, or require specific performance of the contract. An old and controlling legal maxim is that when any matter ...
