Real Estate Investment Options As a Real Estate Attorney in Miami Florida, and especially in the last few years I’ve seen some people struggle with the concept of a “short sale”.

They are unhappy with their financial situation sure, but in addition to that many question whether a short sale is the right thing to do from a moral stand point.

After all they bought a home which they are now barely able to keep payments and are upside down on the debt.

Not in my clients’ experience, but in some cases Banks have gone as far as to threaten people by taking a moral stance on the issue. Guilt is a powerful incentive when you have a conscience, and they know many people feel bad about that aspect of the situation.

It’s easy to feel trapped when you think there are no options. The good news is that every problem has a solution!

It’s all Business my Friend!

For most hard working people this wasn’t part of their plan. They are in a low point in their personal and even professional aspects of their lives and need a fresh start and a clean slate.

The last thing they need is to feel guilty about a business decision they need to make.

And that’s exactly what it is:

A business decision!

As an Attorney I provide legal advice and find the best possible legal solution to my client’s predicament. My role is both supportive and educational, then I aid in the transactional aspect which is problem solving in its very nature.

In order to ease these feelings of remorse when they are obvious, my approach is as I mentioned, educational.

It’s a Contract

I focus their attention on the fact that a Home/House/Property is an investment held together by a contract between them and the bank.

This contract explains the terms and options for both Bank and home owner. You as the home owner have the right to stop making payments at any time if you choose to, and the bank has the right to take the property back.

It’s a business decision no different than any other where the circumstances were unexpected, have changed, or where it no longer makes sense to hold to a bad investment.

Sometimes defaults and short sales are done in a strategic manner, to protect the client from further economic loss and stop the bleeding. If the circumstances are unfavorable to you, something has to be done about it. If they are unfavorable to the bank, they will do something about it.

Insurance companies change their rates on us yearly, especially if the wind blows too hard down here in South Florida. When they change their rates, they change their contract and they did so because their circumstances apparently changed… like weather patterns!

Win-Win Outcomes For All Parties!

So there are options for everyone. You can stop making payments at which point the bank will take the property back. Yet there is one more option for both which is to renegotiate the contract,

…which is precisely what a short sale is!

You as the seller go to the bank and say I’d like to renegotiate the terms of our contract based on your current situation.

The Bank will weigh your offer against the other alternative which is to foreclose on the property, and then make a decision one way or another.

I then negotiate on your behalf with the bank to find the best possible solution for both parties.

But as “your attorney” remember I always represent your interests first.

In many cases, we are able to negotiate the lender providing the seller with additional incentives:

  • Ultimately, the losses are not only stopped, but the client can be paid up to $35,000 from the lender at closing, with
  • all closing costs paid by their lender as well the balance of the mortgage (referred to as the deficiency balance) waived and forever forgiven.   

As such, the short sale results in a well thought out exit strategy with the client winning at the end. This may ease the immorality of it all.

So you see there is no morality clause in any contract. If there was it wouldn’t be a contract, it would be a promise… and it would carry a lot less weight and certainly no exchange of money!

A short sale is a business decision based on the need to renegotiate a real estate contract, and we should be glad that it exists as an option to find an alternative to what comes as close to a win-win scenario for everyone.


Distressed Properties “With great power comes great responsibility” ~Peter Parker’s (Spiderman) Grandfather … Yes I have kids!

I’d like to rephrase that to: “With great value comes great responsibility and the good kind of risk”

So many properties coming on the market today are distressed properties, foreclosed, at massive discounts to market, selling “as is” and often times in questionable condition. defines “distressed property” as:

Property that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed properties usually fetch a price that is below market value.

Read more:

The opportunities are obvious, and sure, you can buy a properties for pennies on the dollar “as is” but here are some points to consider:

  • the worse the condition the harder it is to assess value
  • the more the costs of improvement
  • the longer the time to either rent or re-sell
  • Value not subject to local comparables
  • Not finding a bank to finance the sale because of the condition

On this last bullet it’s necessary to point out that  Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) recently developed a classification system for housing condition ranging from C1 (the best) to C6 (the worst), but only C6 is unacceptable to the agencies in “as is” condition. Nonetheless, many lenders require a C4 or better.

But what should your purchase strategy for distressed properties be?

Here are a few interesting items to consider:

  • An inspection report from a licensed expert will help in the decision as to whether to buy the house but will not eliminate uncertainty regarding how an appraiser will classify the condition of the house. If the house is classified C5 or C6, a loan may not be available.
  • If the sales contract has a mortgage contingency clause, which is a standard provision in some states, the buyer who can’t get a mortgage because the property is classified C6 or C5 will get his earnest deposit back and the deal is canceled. However, the thwarted buyer will not be reimbursed for the cost of the inspection or the appraisal, which might total about $700.
  • If a property is being sold “as is” and the standard sales contract does not have a mortgage contingency clause, I would pass unless the seller agreed to return my earnest deposit if the property is classified C6 by the appraiser. You could be more conservative and require the return of the deposit with a C5, which would avoid a mortgage problem because most lenders will accept a C4 or better, but it may substantially reduce the number of sellers who will deal with you.
  • While accepting a C5 will give you access to more houses, you must find one or more lenders who will accept a C5. You would be well advised to do this in advance of purchase.

Read more: Buying Distressed Properties: A Guide To Opportunities and Hazards |® Blogs

As with all investment categories and types, there are always elements of risk at hand, real estate is no different. We’ve all been able to witness first hand what a downturn in a particular sector of a market can do.

But fear of risk itself should never be a reason to avoid good buying or selling opportunities when it comes to Real Estate, and education and research is the cure for doubt, what’s left after that is just indecision. I wonder if there is a cure for that?

Church of Scientology Acquires Former Renzi Miami office for $7M from U.S. Century Bank

Miami Real Estate Deals The nonprofit group, which is based in Hollywood and affiliated with the national religious movement founded by L. Ron Hubbard, acquired the former Renzi building at 2220 S. Dixie Highway from the Doral-based bank for $7 million.

The amount is more than the $5.9 million mortgage the bank used to foreclose on the property in 2011 – taking it away from developer Renzo Renzi.

The 113,035-square-foot office was built in 2000.

Property records show the Chuch of Scientology already owns an office building in Coral Gables.

Read full article here.

Brought to you by ‘Insights on Miami Real Estate Deals