You know recently several people have contacted me about loan mods for investment properties…Can you get a loan mod for investment property?
The answer in short is, as usual, it depends. But, often the answer is YES.
So who are these “investors” we keep hearing about? At first, it seems like these are more “fat cats”, right? These are the “speculators” who “swarmed” all over properties in the big price-runup so they could “flip” houses or otherwise made a huge wad of money. These people must all be young smart-asses, right? Second cousins to the Wall Street rip-off artists. Well, it turns out–no…Many of these investors were and are actually just regular people trying to make a few extra bucks often for their retirement.
I, myself, became one of these when I joined an investment club. We had great plans of making money in real estate. We heard wonderful stories of others who had done it..just ordinary people who put in a few bucks into real estate and hit the jackpot. Some of our own members had actually invested in real estate deals which paid them 100% profit. At the time, it really seemed like we could do it, too.
So, what happened? Well, we did a lot of talking and dancing around. Actually, no one invested that much money–either $1000 or $3000–and it took us a long time to find an investment that pleased everyone. Finally, we found a great deal. It was a pre-construction in Las Vegas, underwritten by an Irish investment bank, that was to be a mixed use complex very close to the Strip. Our people went and took pictures and we saw the dirt. That’s about all there was. But, the idea was so attractive: a community of luxury condos mixed in with retail and office space. It was a beautiful concept, completely walkable, very European and so close to the Strip.
Some members of our group, not me I’m sad to say, were not that enthused by the whole thing. After all, this was pre-construction. Who was to say the thing would ever get built? Did we do our due diligence? We tried, I guess you could say. A couple of members went to the site, talked to the sales people and took pictures of the dirt….It was really there. Did we find out about Harcourt, the Irish bank? No, not really. What really sold us was that we could “get in” on the deal for 5% down and then since we were Realtors we would get 5 % commission paid to us, so it would cost us essentially nothing to buy in to the complex.
Well, you guessed it…We made two payments of our deposit, but got only one small portion of our commission. The project is shelved. I assume the bank like most Irish banks now has gone belly up or close to it. They promised to return our deposit, but didn’t, of course. As we are a group, those who wanted to get out early didn’t have the clout to make it happen. Those who urged us to hire an attorney…ditto.
So ther you have it. This is the saga of one group of “investors”. Were there others like us? You betcha and all over the country. None of us individually lost much money, not more than $3000, but now it’s such a downer to even think about an investment club. We are just ordinary people trying to save a bit for retirement or college or a fancier lifestye just like so many other Americans during what we know refer to as the “bubble years”. One thing I will say–thank God no one in our group knew Bernie Madoff…