$3M Foreclosure

On Friday we met a Gentleman who owns a $3M home in LA County, CA that is currently 60 days in default.

He was very hesitant and skeptical meeting with us, so much so that it took me close to 3 weeks to finally lock in a face to face.  He had given us some background of the situation and himself prior to meeting him and one thing that stood out was that he was an Actor and former Movie studio exec.  Curiosity led me to check him out before hand but it wasn’t until we met him in person that I realized how ‘Famous’ he was.  All the pics hanging up on his walls helped me a lot! =)  I knew going into this meeting that although this was a multimillion dollar home I had to treat this person as anyone else needing our direction.  It’s interesting though cus in the close to 10 years we’ve been dealing with foreclosures and distressed properties we haven’t been in front of more multimillion dollar homes then this year.  That’s one of the beauties of covering a larger area like Los Angeles County, we can experience both extremes almost daily.

We took a tour of the home and found it to be very clean and elegant.  As we began to discuss his situation we realized quickly that his situation was not uncommon and a classic story of living beyond your means.  It’s all relative though, right.  He was once generating an income in the hundreds of thousands and his lifestyle and family became accustomed to that.  He’s gotten older and the work isn’t happening like it once was and his expenses keep climbing.  He ‘s a good man and cared deeply for his family.  Paid for all his kids education and has supported them through their hard times.  Not explaining to them that it was costing him a lot to do so.  He doesn’t have a regular 9-5 so he’s always chasing the next gig.  The Entertainment industry is feeling the effects of the economy too so a lot of work is being put off until more monies become available.  Which adversely affects all the projects he has in the works.

It was clear as day that he can not afford the property he’s in.  The loan he has is terrible but it’s he can’t afford regular payments either.  He’s followen 6 months behind and his reinstatement amount is over $40k.  He owes just over $2M, so after expenses and paying off his loan he has close to about $800k in equity left in his property.  Before meeting with us his mindset was very much about how to stop the bleeding so he could move on.  But after going through everything it was clear that their was a solution that would free up his equity, minimize his expenses and have a retirement set aside for his future.  But it takes having to sell the property now.  So that is really the Million dollar question.

I think he realized that by changing the scope of his situation and seeing things from the perspective of looking down the road, forecasting a bit and using what you got to reestablish yourself made sense.  Deciding to sell your home is no easy task but it’s definitely the right thing to do in this case.  He hasn’t decided yet but he certainly appreciated our take and welcomed us back to discuss the how a bit more in the next weeks.  Stay tuned!