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Myself & two other partners purchased a beach side condo in…

Hi – myself &...

Hi – myself & two other partners purchased a beach side condo in San Diego, CA in 2006 (we are AZ residents). The mortgage was only under one partner’s name, however, we were all equal partners investing $17k apiece. We put the property in an LLC & listed all three of us as partners. We used the property as a vacation rental to be managed by the wife of the mortgagor & paid her a percentage to manage the property & bookings out of the profits. I know that the mortgagor & his family utilized the property for at least one week a year & I’m certain (although I can’t prove it) that he gave free time at the property to business associates & friends/family. While there were only a couple of cash calls (no more than $1k apiece), he said the property broke even annually & that there were no profits to distribute. In January 2016 I asked him to provide rent rolls, cash flow statements, etc. showing the profitability of the property. He told me he would send this information to me but never did. In November, 2017 I asked for this information again & after avoiding my emails & texts for a couple weeks, finally admitted that he had had both financial & health troubles for the past couple of years. He said he didn’t realize that the loan on the property was a negative amortization loan, meaning each month he made the payment, we owed more & more to the bank (he is a real estate broker by trade) & that the property suffered losses each year. He said he tried to get a loan modification & missed a few payments in order to qualify, but was ultimately turned down. He then tried a Chapter 11 BK, but that failed as well. He insists that the property fell into foreclosure & that fees & back payments totaled almost $50k. At that point he said he partnered with an investor who paid the $50k in exchange for any profits once it was sold.

Lawyer's Assistant: Since laws vary from place to place, what state is this in? And has any paperwork been filed?

He said there ultimately was not much profit for the investor but that it did save his credit from a foreclosure. He also claims he lost his primary residence during this time as well. He claims that because of the financial stress he “forgot” that I was an original investor & that I should have been consulted. I’m not sure how much of this I believe & have now been waiting almost four weeks now for him to send me the settlement statement on the sale of the property, which he claims he cannot locate.
My questions: Do I have any recourse in this matter whatsoever? I don’t want to spend good money after bad trying to squeeze money out of him when ultimately he may just file BK. Is there another path I can pursue – small claims court, monthly payments, lis pendens on one of his properties – anything I can do to get even a little bit of my money back without spending an inordinate amount of money? AZ - no paperwork filed. exploring options right now.

Lawyer's Assistant: You can email***@******.***. JustAnswer is backed by a 100% satisfaction guarantee. So if our Customer Care team can't address your issue, and it's been 30 days or less since you paid to ask your question, they will refund your money. Has anything been filed or reported?

No- i said above nothing filed.

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Answered in 3 minutes by:
1/16/2018
Ray
Ray, Lawyer
Category: Legal
Satisfied Customers: 47,003
Experience: 30 years in civil, probate, real estate, elder law
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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.

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Honestly I think you have to let this go.This person lost his house here, any profits are long gone and he is pretty judgment proof.I cannot see you getting any return here.You should have had all three of you on the title here, anything else allows him to sell it.I just don't see he is worth suing here at this point.

Please don't shoot the messenger.Sometimes you have to just let it go.At least your credit was not irreparably harmed.Let it go here and move forward.It was a lesson learned and nothing here to collect against.

I appreciate the chance to help you tonight.Thanks again.

If you can positive rate 5 stars it is much appreciated.

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Customer reply replied 4 months ago
I hate you! Just kidding! What if I send a legal doc or something threatening to sue him? I don't expect $17k, but I would accept small monthly payments for a while. I just don't believe the house bit...

You could sue up to $7,500 in small claims pro se without lawyer.That might get you something here.Send a demand letter and see what you get fro the guy you never know.

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Customer reply replied 4 months ago
Where & how do I send a demand letter?

Address it to him, send demand for what you feel your losses were here in 30 days unless payment in the amount of $50k or whatever you lost here.

File a California realtor complaint here too.

http://www.dre.ca.gov/Consumers/FileComplaint.html

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Customer reply replied 4 months ago
I can demand more than the $7,500 you mentioned above? Demand letter doesn't have to be from a lawyer? This letter is meant to open a dialog or a negotiation?Why file a California realtor complaint? Was realtor supposed to check for LLC's?

Yes demand what you want, you can only sue in small claims for the $7,500 but they don't know that.

It was my understanding the person who owes you was licensed realtor.If thats not the case no need to file complaint.

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Customer reply replied 4 months ago
Would demand letter be more effective coming from an attorney? Do attorneys do this? Otherwise it's just a letter asking for money, right?

It would be you would have to pay the lawyer $250 or so to send it.

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Ray
Ray, Lawyer
Category: Legal
Satisfied Customers: 47,003
Experience: 30 years in civil, probate, real estate, elder law
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