Garbage Mountain, WA

Posted September 11th, 2007 by Joe Kaiser

I wonder, in Cheryl's perfect world, if she understands what we investors face. Actually, I'm certain she doesn't so there's little actual wonder.

Dear Rob,

Talk about a plan gone wrong.

We did a little better than break even when we sold our property on Weiler Road a couple years ago, but we thought we’d make $100,000.

Such is the life of a real estate investor.


loan at risk

The deal itself was one of those things that ended up all over the page and a whole lot messier than you’d ever imagine.

It started out simple enough. We’d contacted Art, a lienholder, about buying his mortgage at risk of foreclosure. Eventually, we came to an acceptable price, $20,000, and I met him and his wife for lunch and did the deal.

I walked out with a belly full of fajitas and the proud owner of an “at risk” mortgage.

What to do?

We foreclosed, but not initially.

Our first move was to contact the owners to see if something could be worked out, and while they gave us the impression they wanted to comply, they failed to do so and we had no choice but to foreclose.


buried displeasure

Months later, when no bidders emerged at the trustee’s sale, we became the actual property owners.

And a day or two later we were contacted by the authorities, demanding we get the place cleaned up. We didn’t know at the time, but we’d just bought what turned out to be one of the top ten disasterized properties in the county.

Not only had the former owners been long-time problems, they’d left behind a mountain of garbage, all neatly buried on the back of the property. We thought it was just a hill.

It wasn’t.

Because buried there were cars, appliances, machinery, and tires, thousands and thousands of them, and someone who looked a lot like me was now responsible for them.

We’d planned on cleaning up the place, but nothing like this mess was imagined.


barren hillside

We drove out to the property to see that the tenants had left, as promised and were devastated to see they’d logged almost the entire property. Our cute little cabin in the woods was now sitting on a nearly barren hillside.

It was the ugliest thing we’d ever seen.

We finally got possession of the place a couple months later (we had to pay for an eviction), and now we’re completely stuck. We’ve got tens of thousands invested, and a property that looks like a hurricane had come through.

There are at least a dozen junk cars strewn about, along with all the other mess, and once inside the cabin we discovered some idiot had taken a sledge-hammer to the rock fireplace and destroyed it. The windows were all broken, and the kitchen cabinets we smashed and on the floor.

Garbage was everywhere.


high risk business

The idiot tenants had ruined the property by dumping and burying what amounted to $45,000 worth of junk (that’s what we paid to clean it all up), stolen virtually all the timber, and intentionally demolished the cabin.

Welcome to the world of foreclosure real estate investing, Rob.

I wonder, in Cheryl’s perfect world, if she understands what we investors face. Actually, I’m certain she doesn’t so there’s little actual wonder.

But this is reality. We constantly run into these kinds of crazy situations where we forget about profits because just breaking even is now the goal.

Foreclosure investing is a high risk business.

Sitting in an air conditioned office deciding we’ve made too much or have taken advantage by requiring control of our partnerships does not take into consideration what we investors face on a daily basis.

Garbage mountains and destroyed properties are reality and as any investor will tell you, foreclosure can sometimes be an ugly business.


we cleaned it up!

How’d it end?

We could have easily just walked away. I’m willing to bet many if not most investors, upon discovering the garbage mountain, would have done just that.

But we hung tough, hired out a heavy equipment clean up crew, and we got it done, completely restoring the land back to its former glory. Not a lot of trees remained, but it didn’t look half-bad.

It took months, but it was gratifying and worth the effort.

The public works department was delighted. We’d taken one of the worst problem properties off their list, and the inspector in charge practically gushed with appreciation at us having done so.

Cheryl asked me about it during our deposition, wondering what we did when we discovered the mess. I told her, “We cleaned it up!”

She seemed disappointed by my response. It didn’t fit well with her interpretation of me being a menace to society and so we quickly moved on to her next issue.


tires and more tires

We’d heard talk that Public Works, so delighted with our results, was giving us an official letter of commendation for taking care of this mess. We got some sort of letter, I think, but nothing official. Heck, we didn’t need one.

A good thing had been done, and our community was no longer burdened by that mountain of garbage and those scary people living there, and we’d once again demonstrated the sort of people we are.

Of course, your office considers this a scam, Rob.

Fiscal Dynamics does not provide a valuable service to Washington property owners. — Cheryl Kringle, former AAG
5/9/2007 Settlement Proposal

Go figure.

Respectfully,

Joe Kaiser


3 Responses to: “Garbage Mountain, WA”

  1. HSI responds:
    Posted: September 11th, 2007 at 2:35 pm

    With the amazing frequency that you went to bat purchasing properties and bidding at auctions and stopping foreclosures in your business, Joe, it’s no wonder you had a few strike outs. What’s great is how you hung in there and batted on through, dusting yourself off, and learning from each heart wrenching and financially depleting experience. A lesser man would have thrown in the towel long ago. Now you can only aspire to a fair day in court next year. Then you can write a book and cash in on the AG’s involvement, with these captivating chapters you’ve already written with all of these blog entries. Keep fighting the good fight, my friend.

  2. HSI responds:
    Posted: September 11th, 2007 at 3:00 pm

    And additionally, you may wonder how you can err on some deals like this one Joe writes about, however there’s an excitement to doing the “art of the deal” and seeing it all come together for a win-win situation for all parties involved. A non-investor will never be able to understand this exhilerating feeling; nevermind the profit which is just icing on the cake. Once you get to Joe’s level, it’s the deal that’s the fun part.

  3. DaveD responds:
    Posted: September 13th, 2007 at 6:29 am

    So she was disappointed, huh? This presents a real conundrum to her as far as evaluating damages. Are the sellers due that hundred grand you were figuring to get? Or to be fair, do the sellers owe YOU the 100K because of damages, depletion, and their failure to disclose? In any event… Poof!… the profit is gone.

    One thing is for sure. Cheryl is certain there is only one scammer here. Even if he didn’t make a dime. Now if she could just figure out that equity thingy you posted months ago…


Post a Comment

Enter Your Details:


You may write the following basic XHTML Strict in your comments:
<a href="" title=""></a> · <acronym title=""></acronym> · <abbr title=""></abbr>
<blockquote cite=""></blockquote> · <code></code> · <strong></strong> · <em></em>

  • If you’re a first-time commenter, your response will be moderated.
  • If your response includes a link, it will require moderator approval.
Enter Your Comments:



Note: This is the end of the usable page. The image(s) below are preloaded for performance only.