Updated: Nov 1, 2021
Rural Texas | Metromedia Funding Solutions | Solving Problems
Rural Texas - Everyone Deserves A Fair Evaluation
It was right after the fourth of July when the applicant first called. Failed funding attempts from every funder across New York and Florida had almost stopped the applicant from moving forward, but Doug found out he had real estate. The real estate was tied up on judgments and liens from a failed real estate venture from 2008 totaling over $250,000.00. Everyone, including the merchant and funder, thought the deal was dead. You can tell by the merchant's bank statements that it was not something he would have done intentionally. He told a story about a business venture that he attempted and they lost their shirt when the funding was recalled with no notice by the funder. They were never late, never missed, and invested over a million dollars into the project of his own cash. When the housing market crashed in 2008, the funder recalled the funds to be paid in 30 days or they would force a foreclosure. The next day, they initiated the forclosure illegally and processed the suit with a lawyer that is currently in jail and disbarred, but damages were already done.
Metromedia Funding Solutions - Solving Problems
Rick said, "We could not find the lienholder, we searched everywhere and it took sending an agent into the courthouse and to dig through court records to find the lawyer that filed the suit to enforce a judgment only to find out he was out of business." This was a mess, with the diligent work of the title clerk team at Metromedia, and a skip trace we were able to discover the debt was sold through a broker that sells judgments to lawyers for pennies on the dollar. We were able to find the law firm that bought the debt, and we discovered that they bought it cheaper than anyone would have thought. They were sitting on it and kept filing to renew it every 10 years because they figured if the property owner passed away, they would get the property for what they paid for buying the judgment. It took Rick several hours to find out what they were buying and selling these types of judgments for on the internet, but Rick called the lawyer that bought it, and broke it down to him, and mentioned that he could get a good return on his purchase if he settled. Rick discovered that lawyer bought the $250,000.00 lien for $17,000.00. Rick discovered that he bought the paper about a year ago. Rick offered $25,000.00 to release it and the lawyer took it.
You would think we were out of the woods, right? Wrong...
It seems like we had good control on this, then Uncle Sam came along with a judgment that took Rick and this merchant 3 hours on a call, and Doug and the merchant on another 3-hour call to negotiate and settle, they agreed and sent their paperwork over, then all of the sudden the title company wants a survey. Rick hung in there with them and found a surveyor and collaborated with the funder to coordinate and get him out there, remember this is in rural Texas so we did not have "pick of the litter" on the choices, we were sidelined for six weeks. We were able to wrap it up and fund the deal, we did a Lease Buy-Back. A product that was invented because there is a need that was not being met. We test ran this program in mid-2020 and we decided that we needed to start this.
What is a "Lease-Buy-Back"
To put this product in layman's terms it is an act where the funder buys the property at 50% of the value, leases it to you, and then you buy it back at 60-75% of the value depending on how long you need the term to be. It does not require revenue, it requires a plan of action and a free and clear piece of real estate. The popularity of this product has been taking off with people out there that inherit property, need cash but do not want to lose the property. It is also gaining popularity with fix and flip homes that are bought out of tax sales and foreclosures. In this case, Rick had no choice but to run this product to bail the merchant out of a 13-year old hole that he would never see the end to. Even as expensive as it may seem, the whole situation should be assessed. Rick said that his funding company is going to put substantial emphasis throughout 2022 on this product because the need is substantially larger than we will ever meet in our lifetimes.
Questions asked by applicants since we started this program.
Rick and the whole team know that this product solves problems that other products cannot handle. They have seen it work, and there are several brokers that have discovered it too. What many in the industry understand is how labor intense they really are. The merchant above has a combined total of 53 manpower hours in that deal, which is higher than normal, it usually is closer to 20 hours