Gary Thomas

There was a segment on the TODAY SHOW last Friday about a San Diego couple that is suing their former Realtor for professional negligence among other claims. Buyer claimed "the agent was negligent in not telling them about other houses that sold for less, including one three doors away that has a pool and sold for $105,000 less and another that was considerably bigger that sold for $175,000 less." GO HERE to read the story or watch a clip.

We have a Realtor in Key West that advertises himself as a "Real Estate Expert". Even before learning of the above referenced lawsuit, I thought our local "expert" is setting himself up to be sued. I think he is telling the world that he is more competent, experienced, and able than other Realtors. If the "expert" Realtor makes an error, is he not subject to a higher standard of conduct and conversely subject to a claim for higher damages than a plain old garden variety Realtor?

I am not an expert and don't claim to be one. Period. That being said, CLICK HERE to checkout a few of the 77 duplexes and 3-t0-4 family units available on the Island of Key West. I went through the mls and selected these properties generally because of their price per sq ft, location, special features, or possible SHORT SALE (in some instances). If you are looking for an investment opportunity, now is a good time to consider buying a property in Key West. The fact is that most of these properties have not sold because the market is still very cautious. The price per sq ft is down considerably now from what it was back in 2004 and 2005. That could mean that the prices then were too high, or that the market in general is depressed now. Some of the units were purchased at prices higher than the current asking prices. I think some of these units are buying opportunities today.

Some of the properties would be great for an owner plus tenant situation. Others are just income producing units. But I invite you to checkout the list and see if one of these units interests you. If so, please contact me for more information. Gary Thomas, 305-766-2642 or e_mail at kw1101v@aol.com.

I attended seminar last week dealing with Short Sales. During the seminar the conversation eventually wandered to the topic of foreclosures and things foreclosed property owners can do. She told of borrowers who put bags of concrete down the drain just before they vacate their homes. The dry mix turns hard after a few days and the bank gets a huge mess. And her story reminded me of my own experiences and dirty deeds that I encountered during my years in banking. Here are a few:

Paper Widow: the widow of a major Denver newspaper publisher refused to pay her loan to the bank. I commenced foreclosure on her very expensive home. She called the president of the bank and asked him to intervene. I got called to his office and explained how far delinquent she was and that she refused to pay anything. I related how she told me she would drag our bank's good name down on the front pages of the paper. I was told to continue. Then I got a phone call from her son with whom I went to law school. He said his mother was "nuts" and asked for a small delay so he could repay the loan. I agreed and the loan was repaid.

Mr. Green the Vet: a Viet Nam paraplegic had a home loan that funded renovations to a 1960's era ranch home to make it suitable for the wheelchair bound vet. He refused to repay the loan, or any part of it. He threatened to go to the news media and plead his case about the big bad bank taking his home. I told him he had to repay the loan and could not live there for free. He dared me, and I foreclosed. When we got the house this person had managed to remove all the kitchen cabinets, appliances, all light fixtures, light switches and plugs, all bathroom fixtures except the toilets which were filled with ****.

Your the meanest man I ever met: I foreclosed on the house of a former bank co-employee (I did not know him). His wife cleaned her southeast Denver home so that it would shine and no one would think ill of her. But as she handed me the keys to her home she told me that I was the meanest person she had ever met. I had not made the loan to him, and I had tried to figure out a way to help him find a way to get it re-paid. But things did not work out.

I hate you Gary Thomas: we had a huge loan to a farmer in Western Kansas. He had several square miles under cultivation. He had loans with several different banks, but we had the mortgage on the home place, the barns, several sections (square mile sections of farm land), and UCC liens on his farm equipment. When he reneged on paying his debts, we started foreclosure. We held an auction on the home place and sold all of our collateral. Now the borrower had managed to keep his Beechcraft Bonanza away from my clutches along with some other toys. But his wife blamed the loss of the family farm on me instead of him.

Political Ever-Green Loans: big banks make "evergreen" loans to politicians. An Evergreen Loan is a loan that is continuously financed by the lender rather than repaid. No Clean-Up requirements are usually associated with Evergreen Loans, meaning there are no contractual obligations requiring periodic payments on the outstanding debt. Typically made under specific terms, it is also a de facto condition in renewing short term loans, where the loan is renewed without any reduction in the principal amount. They were made to both political parties and to the highest elected officials in the state. I filed suit against the former director of the regional transportation district, the former lieutenant governor, the former director of the Denver Symphony, you get the picture. My experience was that lots of politicians like to use other peoples money for their own ends. Just you try to get one of those loans. I dare you.

I feel the earth move under my feet: I foreclosed on single family home at the base of Lookout Mountain just west of Denver. Lenders usually don't get to see the inside of a property prior to foreclosure so the banker uses his best judgment to decide how to handle each case. This foundation of this house was also a retaining wall for the mountain and the foundation had slipped and caused the house foundation to shift downward. I was able to trade the banks interest in this house for another property without any structural problems and everyone ended up okay in the end. But that was pure luck.

California One Action Rule: a California resident and borrower had borrowed money from our Colorado bank. He defaulted on loan and we foreclosed our security interest on the loan (a hotel in Palm Springs, Ca.). But we had a deficiency amount still owing so we sued our borrower in Denver District Court. He appeared and defended. We got judgement. He appealed and the Colorado Supreme Court upheld our judgment citing language in our loan documents stating that Colorado law would govern the documents and transactions. I then sued him in California to enforce our foreign judgment. He defended and lost. I remember the California Supreme Court ruling stating that we did what seemingly could not be done under California law: we got two shots at the apple so to speak. He got clever and bought a house in Coos Bay, Oregon. I sued and foreclosed his interest in the house. The borrower was a former attorney who thought he could use his wiliness to avoid paying his debt. He lost.

The Usual Suspects: our borrower was a home builder who defaulted on loans to several big banks. He did not pay a lot of subcontractors, and he had lots of enemies. He and his wife divorced. I was convinced that the divorce was a sham. I later learned it was anything but a sham. I got an anonymous phone tip that he was going to receive $100,000 in cash on a Friday at his attorneys office in Lakewood, Colorado. I had our outside counsel get a writ of execution issued and got the sheriff to appear at the attorneys office on the day and time. Sure enough the money was there and the sheriff took it. Our borrower went ballistic. No one ever did that to him before. We spent 4 or 5 days in court arguing over what we did, but we won. A few months later the cover story in WESTWORD, a Denver weekly newspaper, was about the murder of our borrower and the discovery of his body at the Cherry Creek Reservoir. My bank was the only lender to get any money out of this crooked builder.

The Crying Game: another attorney I knew from my days practicing law became the owner of a bunch of industrial banks in the Denver metro area that were known as the Presidential Banks because each bank was named after a former President. The attorney borrowed money from several commercial banks in Denver including ours. He defaulted. He made a quick trip to Florida where he got a drivers license, registered to vote, bought a house and declared his homestead. He returned to Colorado and filed Chapter 11 Bankruptcy. We took him to task and objected to the fraudulent bankruptcy filing. We had him in tears on the witness stand during one of the hearings. He eventually found some money he forogt he had and paid us off.

I didn't inhale: a Mexican national pulled a big kite on our bank--about $500,000 in 1982. I got a prejudgment writ of attachment on his penthouse condo that he owned free and clear in Vail. The court appointed me a receiver for the property, and I took an itemized inventory of all personalty found in the unit--including a stash of marijuana. Later we entered into a settlement with him through his attorneys and got ownership of the condo and the contents. But the attorney made sure to disavow any ownership of the marijuana that was listed in the inventory filed with the court. We sold the condo very quickly. All cash. Total recovery of our loss.

My favorite story is about the REO I called Cujo Oreo. READ IT HERE.

Borrowers do some crazy things when they cannot repay loans or unsecured debt. I found it much easier to deal with people who were open and honest when they fell on hard times. I was even able to get my bank to lend new money to good people if they had a way to use it to earn money to pay us back. It worked on several occasions. But most borrowers get scarred and run away and hide or blame their banker for their woes.

Just Listed: 627 Southard Street Old Town, Key West, Fl. This 3 bedroom 2 1/2 bath has 2590 sq.ft of living space and is situated on a 3497 sq ft lot at one of the best locations in Old Town. The property is offered at $1,500,000 or $580 per sq ft. CLICK HERE for more info.

The house next door at 631 Southard Street sold in April 2006 for $2,250,000. CLICK HERE TO SEE PIC. That house was a superb renovation. It was originally priced at $3 million and eventually sold far below its true value I believe. I had a client submit an offer of $2.7 million cash which the seller turned down.

Just across the street at the corner of Elizabeth & Southard is another splendid house that is only 13 years old, so it is not a renovation. It was likewise price at $3 million and did sell at $2,680,000. CLICK HERE FOR PIC. This is a great home in a great location and has been featured in many publications.

I mention the surrounding homes because they reaffirm the value of this location. The house at 627 Southard is classic Key West Greek Revival architecture. The lines are beautiful. The architectural details are not visible from the photos, however.

The listing agent describes the property this way: "Distress sale! Bank says bring all offers. Best location in Old Town! Second floor completely remodeled - top of the line. All new foundation and sills. New central air two zoned central air. First floor ready to be finished. Complete set of plans available, including plans for third floor apartment. This is a potential short sale that may be subject to third party approval." The owner purchased the property in 2005 for $575,000. There is a $1,350,000 loan. I do not know the extent of the renovations and how much it will cost to complete the house. But that figure will surely weigh on any potential purchaser's mind. And the present lender will have to take the costs to make the property habitable into consideration when it evaluates any offers. I think this house is one of those buying opportunities some people dream about.

This property is a major risk-reward situation. The risk is buying in this devalued market and taking on a renovation project. The reward comes when the market bounces back because the house itself has the bones and location to justify the work necessary to revitalize the property. The construction business is way down right now in Key West and I think a well financed homeowner may be able to hire a good contractor at a good price.

My comments are based on suppositions I know. But this is a killer house in a killer location. Somebody will buy it. Time, price, and terms are the variables that will make up this deal. There are current comps a couple blocks east on Southard that could support a substantially lower offering price.

720 Eisenhower Drive is not your typical Key West "Conch" house. The architecture is historic, the renovation is totally up to date and on the spot. And the grand residence is one of a kind for Key West or any other world class destination.

This is how the listing agent describes this property: Jefferson B. Brown, Florida Supreme Court Justice, built this mansion on its current site in 1889. Now completely restored, this award-winning 3 bedroom, 2.5 bath masterpiece could be expanded with approved plans for a garage and guest apartment and a third floor living area. Everything in the home is custom built and is controlled by a smart home system including the HDTV projection theatre room. Grand ceiling and door heights reveal historic beauty and design details at every turn. The downstairs master suite opens to the pool area and is complete with an enormous master bath. The lot occupies half of a city block. The pool is surrounded by an extensive lawn with off-street parking. Everything you could imagine and far more.

720 Eisenhower Drive is a 4200 sq. ft home that sits on a huge 12,675 sq ft lot. It is offered at $4,975,000 or $1185 per sq ft. CLICK HERE for more info and lots of pics.

The neighboring properties are quite nice as well. Last year I wrote an item about Paradise Harbor. CLICK HERE for pics and current listing info on the units as they now exist. Scroll down the pages. The properties are looking great and in an "up" market they would be gone. They are waterfront in a town with hardly any waterfront properties. Across the street in the 1500 block of Petronia is another development brand new single family homes. This is what I wrote last year CLICK HERE. Nothing has sold. Yet.

The house next door at 718 Eisenhower is just about as nice. It was on the market and priced at $4.5 million, but it has been withdrawn. CLICK HERE to check it out.

In a good market it would take a while for the right buyer to come along to purchase this property. It would take deep pockets, a love of the historic architecture of the house, a respect for how the house sits on the lot and blends with the surrounding properties, the appreciation for the quality workmanship and materials used in the renovation, and an understanding that what seems like a high price today may in fact be a real bargain in a few years. Markets rise and fall. We are in the depths of a bad market now. But the market will surely rise and a one of a kind house like this will always be appealing to those who appreciate the very best.

If your pocketbook can't afford this property, don't fret. There are lots of very nice homes in all price ranges. CLICK HERE to conduct your own search to find your slice of paradise and then call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com for more info.

One of the advantages about growing older is that you can predict the future so much more clearly than younger folk. That's my story and I'm sticking to it.

I was an attorney and worked in the banking business in the 1970's through the early 1990's. I went through the Colorado crash. So I have real life experience in dealing with a depressed economy and a depressed real estate market.

I worked for the RTC (Resolution Trust Corporation--the federal government agency set up to clean up the savings and loan debacle) and managed problem real estate assets in a variety of locations across the country. So I think my observations about the present real estate situation in Key West may have some merit for those willing to read my thoughts.

The role of the RTC was liquidate the assets of failed S&Ls. The RTC actually facilitated the transfer of wealth from one group (the S&Ls and their subsidiaries and joint ventures) to third parties. In some instances the assets were extremely valuable and were sold for mere pennies on the dollar. The parties that purchased the assets did so at a time when the market was hesitant--just like it is today. They took a risk. But with that risk came the potential for huge reward. And those that bought the assets were rewarded handsomely.

I see the troubled times in Key West as being buying opportunities. Not across the board mind you, because some properties are still woefully overpriced. But there are specific properties in strategic locations that are now offered at prices below there real market value. And buyers who take the risk in this market at this time will be rewarded in the future for their real estate savy a few years from now.

Take this Classic Eyebrow House located at Campbell Courtyard. The street address is 617 Fleming Street. It sits at the back of the property so it is very quite and yet it is so close to everything that second home owners want in an Old Town property. And it has its own parking spot. This property is also a Short Sale meaning the seller is requesting the lender to accept less than par in the payoff of the mortgage against the property. CLICK HERE for more info and photos on this charming cottage at 617 Fleming Street, Old Town, Key West, Fl. It is now offered at $650,000 or $586 per sq ft. The house is two story, 3 bedrooms, two baths, and nicely appointed. There is a beautiful pool and gardens awaiting you.

Want to see this charmer? Give me, Gary Thomas, a call at 305-766-2642 or e-mail me at kw1101v@aol.com. This is a buying opportunity.