Purchased Last Year, Foreclosed upon Last WeekJune 6, 2016
Listed for “$699,000” early last year, or roughly $450 per square foot in an area where single-family homes had been selling for 75 percent more, it shouldn’t be too shocking that the “spacious Miraloma Park home with panoramic San Francisco Bay VIEWS ready for renovation!” at 701 Teresita Boulevard sold for $1,152,000 and nearly “65 percent over asking!” at $738 per square foot (roughly 10 percent below the going average for the neighborhood).
Purchased by “RH Investments Inc,” the sale closed escrow on July 10, 2015, and permits to renovate and expand the home were approved and issued in October.
By early January, the home was in foreclosure. And last week, 701 Teresita Boulevard sold for $942,000 in cash on the courtyard steps, an 18 percent discount versus what was paid eleven months ago.
Comments from Plugged-In Readers
Interesting investment strategy. Buy a house, get permits to renovate, but then don’t do the work or pay the mortgage.
RH Investments looks to be a 2 person operation.
Description of the President: . His insightfulness of the industry allows him to identify advantageous properties and closing on them successfully.
Why wouldn’t you give money to these people? (Yes, names match secretary of state web site.)
Just looked up the deed records:
$806,400 Loan recorded as 1st purchase money on 7/10/2015
$550,000 Loan recorded as 2nd purchase money on 7/10/2015
$190,000 Loan recorded as Cash Out on 7/23/15
This is what you call a good old fashioned fraud-hustle. Second and third get wiped out. First gets made whole ($920K published bid vs. $942K sale price). I really hope the people involved get investigated.
Another way to say it is that the buyers owed nearly $400K more than they paid for the house on the open market within 2 weeks of the purchase. This would not be unheard of for a legitimate development with plans ready to build, but highly irregular for a fixer without approved plans, especially the multiple-loan format.
The searchable statewide corporation registration is available at kepler.sos.ca.gov
Question is who held the second and third loans? I would be pissed if it was one of my banks. I guess lenders still haven’t learned from mistakes in 2010.
Look like one of their shticks is getting loans from “investors”, so might not even be banks:
“Tier 2: Consists of Trust of Deed Investor which is a fixed rate, 10-12% no risk, 60 or below LTV and has a 1-year term. This is a great opportunity to have steady monthly dividends. Safe, and secured, backed by 1st position lien only. We ensure that you will have 1st lien on title in your name, or your llc/corporate name.”
This one was hardly under 60 LTV and the 10-12% payout and “no risk” makes me chuckle.
One look at the documents and . . . no way would anyone legit invest with these guys. And if they did so, two truisms come to mind:
A fool and his money are soon parted
You can’t con an honest man.
That’s correct. The lending entities were:
1. NORTHERN CALIFORNIA MORTGAGE FUND VIII LLC
2. SW LLC
3. GLASS FISH LLC
Thanks for the further information. Their investment sales pitch is laughable. Thirty years ago my family held first and second mortgages of properties for homeowners who couldn’t qualify for traditional bank loans i.e. gay couples, self-employed singles in San Francisco. We always did our due diligence LTV ratios, a reasonable interest rate, and a 5 year fixed term.
Maybe the buyer gave himself a second through a straw company to jack up the sales price, because what fool would give them that large of a second? It looks like these jerks put in zero and took out $190,000.
looks like theyre up to no good again under the name bridgeville36 llc.
Entity Name: RH INVESTMENTS, INC.
Entity Number: C3595662
Date Filed: 08/16/2013
Entity Address: 1875 OLYMPIC BLVD STE 205
Entity City, State, Zip: WALNUT CREEK CA 94596
Agent for Service of Process: ALI HASSAN
This reads straight out of a Trump University ad. The fact that they call it ‘the’ Silicon Valley is a massive red flag, I’ve never heard anyone refer to SV as ‘the Silicon Valley’:
“RH Investments is a visionary company growing around the Silicon Valley. We specialize in lucrative business ventures in the Real Estate market, providing opportunities of investment and wealth building. Our goal is to help investors to get the most out of their capital with a high degree of security and collateral protection. We invite our clients to partner with us in some of the most exclusive ventures. Every project is hand selected, carefully evaluated and highly leveraged by our financial and real estate experts.”
“Highly Leveraged”!!? LOL
That’s not usually a selling point for a real estate transaction.
What Trump University ad are you referring to? These guys aren’t claiming to be honest and they aren’t saying whose wealth they are building! They have the highly leveraged part right. You are right, “the” Silicon Valley is a dead give away!
Well they are correct in that this project was highly leveraged…
This flipper got flopped!! Walnut Creek isn’t part of Silicon Valley!!
Look up 1719 Alabama Street SF..Same kind of hustle going on!!
Great call. Owned by Pacific Financial LLC, mailing address that just happens to be the same one at:
1875 OLYMPIC BLVD STE 205
WALNUT CREEK CA 94596
I don’t know how you found that, jj, but nice job.
H investment , Pacific financial Llc are the biggest scam artists & fraudsters . Check 2424 Caballo Ranchero dr , Diablo Ca , very instresting
I know the headline pitch for this story was about prices going down and the market softening.
I think the truth is more about the potential for a rising incidence of fraud in the marketplace as the collective memory of the crash recedes. I just saw The Big Short the other day and there is a great observation from the Michael Burry character, of Scion Capital, about fraud and complexity increasing dramatically before historic financial crises.
Most financial crises can be understood not as discreet events but as the consequence of deliberate policy and predictable market cycles. The best discussion of financial crises I’ve seen is Minsky’s financial instability hypothesis. Wikipedia has a decent synopsis of it; you should read it if you want deeper insight into the evens depicted in The Big Short.
Financial crises can prevented or at least minimized with strong financial regulation and automatic stabilizers. Strong financial regulation and automatic stabilizers minimize the depth and duration of downturns. They also limit the massive bubbles that the FIRE sector thrives on. The FIRE sector owns the policy-making apparatus of both parties, and they’ve successfully scuttled the regulatory, monetary, and fiscal policies that had been put in place to minimize financial crises.
And that’s why the economy is so volatile. There are proven measures to address this volatility, but those measures limit the wealth-acquisition of the policy makers, so we don’t have them.
Most Americans don’t know these details, but they know they’re getting screwed, and that’s the main reason for Sanders’ and Trump’s popularity, and why the bankster consigliere Hillary Clinton is so distrusted.
Yes a good sign of a bubble is an increase in fraud surrounding it, like Theranos and these guys: Hedge Fund Accused In $10M Ponzi Scheme; Fake Tech Shares Fund Execs’ Luxury Lifestyle
“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett
The market softening and fraud being revealed go hand in hand. Rocketing prices make people blind to all sorts of nonsense.
My personal favorite scam is an offer comes in either with no proof of funds (“didn’t we send it to you?”) or a proof of funds (but one they have no intention of using). Always getting a “loan”, and a slightly longer than average close of escrow (45 days) and ALWAYS with the verbiage of “BUYER and/or assignee” with extreme resistance to any counter limiting that assignee to an LLC one of the original buyers is connected to.
These guys get in contract and then try to shop the deal among their other developer contacts, with no real intention of ever closing on it, but acting as a middle man of sorts.
Virtually always out of area buyer. Maybe this type of thing works elsewhere, but I knew a guy who foolishly accepted an offer from one of these and it was a disaster…no deposit sent in but refused to leave contract, and when slapped with a notice to perform they got their attorney involved in a second because they still wanted to “sell” this opportunity to one of their developer contacts.
Indeed. “Wholesaling” should be on the top 3 list of eradication items for the BRE.
Brokering without a license or regard for the parties involved.
My favorite is the IRS call from the foreign English speaking guy who says you’re going to jail for not paying the IRS. If you get that call ask them how much you owe and to break it down year by year. They get rattled and hang up!
UPDATE: If You Think You Know the Market, Now’s the Time to Tell
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