A lady I recently started working for, she owns about 5 rentals and her contractor husband died about a year ago (age 54 ), was telling me today that she's going to try to fake living in one of her rentals so she can get a better rate on a re-finance.

Anybody know how risky that is? I mean you would think they'd investigate at least a bit, they're losing money on the deal, although she'll be going to a bank where she's a complete unknown, so if it's a new deal, that bank won't be losing anything as they had nothing previously anyway.

Too bad this lady's not a babe, she seems to like me plenty and that property . . . . . oh man . . .

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Te futueo et caballum tuum

1986 300SDL, 362K
1984 300D, 138K

Guy down the street from me spent a few days 'remodeling' a multi-unit into a duplex so his landlord could refinance at a lower rate. Remodeled it back the next week once the inspection was done.

I seem to recall reading that the penalties for the crime you describe can be substantial.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

I was kinda thinking the lady might end up regretting it. She not a complete fool but doesn't seem all that savvy.

I told her she should actually try to live there for a few months while this is going down, and to get at least some mail there for a few years after. And she might have to lower the rent to get the tenants to cooperate fully.

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Te futueo et caballum tuum

1986 300SDL, 362K
1984 300D, 138K

They do soft pulls on insurance and tax information and people are getting caught, its called fraud and a felony. People used to get away with it but with the current market conditions and upcoming extra verifications she may get caught. The rate difference is not a that big so I guess we know the cost of her integrity.

Or false pretenses

I think the disillusion with these types is the huge tax rate difference, which is an even easier way to get busted.

Nothing like paying $250,000 in fines and a couple years in the slammer to save 1/4%.

No need to get into frauding-up a HUD 1003!!

Hey dude, there used to be a guy here who used that handle.

Dunno what happened to him.

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Te futueo et caballum tuum

1986 300SDL, 362K
1984 300D, 138K

Greedheads like that who speculate, flip houses, and try otherwise to game the real property system deserve everything bad they get.

Shady lenders,(institutional and others) mortgage brokers, offshore investors deserve the same.

Sometimes when you engage in all that fancy footwork, you wind up tripping.

Could be a little Karma, going on, too.

If she gets caught, she will need a good attorney fast, and they don't come cheap.

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1991 560 SEC AMG, 199k <---- 300 hp 10:1 ECE euro HV ...

1995 E 420, 170k "The Red Plum" (sold)

2015 BMW 535i xdrive awd Stage 1 DINAN, 6k, <----364 hp

1967 Mercury Cougar, 49k

2013 Jaguar XF, 20k <----340 hp Supercharged, All Wheel Drive (sold)

If you tell the truth, you don't have to remember.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

^^^^^^^^^I like that one.

I am going to have a sampler made.

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1991 560 SEC AMG, 199k <---- 300 hp 10:1 ECE euro HV ...

1995 E 420, 170k "The Red Plum" (sold)

2015 BMW 535i xdrive awd Stage 1 DINAN, 6k, <----364 hp

1967 Mercury Cougar, 49k

2013 Jaguar XF, 20k <----340 hp Supercharged, All Wheel Drive (sold)

I can understand it sounds a bit cheap but she's actually a pretty kind landlord (like, Grateful Dead speak, mannn). So far, everything a tenant has wanted, she's given it to them. Like one current job I'm doing, the previous owner put a small washer dryer in one corner of the kitchen (?!) and then just vented the dryer air towards the ceiling (double ?!). She wants me to vent it outside and while I was talking to the tenant, he said that a range exhaust hood would be nice (older house -- 5 unit giant house in the hills on a quiet street behind the U Cal stadium). Up til now, they had a fan that fit into the window frame with the window opened. Not optimal.

I ran it by the landlady, saying I could use the same exhaust port in the wall (middle floor of 3 stories) and put in a few more cabinets to hang the hood from and one on each side, as the kitchen only has one wall cabinet (more !?) and it's a 3 bedroom.

She said 'fine, don't get a cheap exhaust hood -- go quality.' Plus, every tenant of hers I've worked for loves her -- she's accomodating but no pushover.

She says since her husband died, she's losing money on some of her properties and it's got her a bit freaked out.

I'm going to print out these replies and show them to her, editing anything I might have said that's less than utterly polite.

And, BTW, thanks.

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Te futueo et caballum tuum

1986 300SDL, 362K
1984 300D, 138K

It's usually the down-payment, 20% on investment prop. vs. 10% (or less) on owner-occupied, rather than rate that gets lowered. But who knows what different lenders are doing these days.

A lot of folks do it here in Socal and get away with it. I don't think banks spend much time checking up on their borrowers, especially if payments are being made as agreed.

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1982 240 D, 308,000 - 321,127 miles (sold)
1982 300 TD,166,500 - 226,000 miles
1998 E 320, 120,000 - 144,000 miles
2005 C 230 K, 26,000 - 77,000 miles (sold)

I bet a lot of people do it and get away with it. But if your gonna do that, you certainly don't go around telling people.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

Well, I'm her new confidant and advisor. She's a bit talkitive (I'm going to have to ask her to call me in off-peak hours) but has a good heart and she wants to keep those tentant checks coming so she gives me all sorts of work.

At least she doesn't let her properties just squeak by in servicibility, like drugging an old race horse.

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Te futueo et caballum tuum

1986 300SDL, 362K
1984 300D, 138K

I wouldn't do it, not in this market. Banks are acting funny these days I would say the chances of getting called on that are pretty good.


Why does she need to refi? ARM adjusting? Can't afford them?

If they rentals are not paying for themselves dump them, if she can. NFW would I buy a cash flow negative rental, not unless their was another motive.

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2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200