John Occhi, ePRO, Hemet-San Jacinto CA Real Estate, 951-443-6259

Indicted San Jacinto Developer Just Listed His 30 Acre Estate

San Jacinto, CA has been the hotbed of local political news with 4 of our 5 City Council Members under indictment for various campaign and money laundering issues.  In addition to our politicians, 4 others were also indicted including local developer, Robert Osborne the president of Osborne Development Corp. 

The 69 year old developer facing 90 different counts, including 25 felonies. 

Osborne Development has built many local tracts of some of the better homes in the valley and also has extensive land holdings in the Hemet San- Jacinto Valley, CA.  Currently, the company has homes available for sale in 2 neighborhoods in Hemet and two more in San Jacinto with a 5^th in nearby unincorporated Winchester with homes ranging in size from 1,251 sq ft to 3,366 square feet.

This story is about his 29.79 acre (per the Assessor records) ranch just up the street from my office at 805 N. Sanderson, known as Rancho De Milagro.  When driving by it is hard to imagine the splendor on the other side of the walls.  The local residents I spoke with were not even aware there was a private 5 acre lake there that is stocked with a variety of different species of fish.

Check out what an expired MLS Listing had to say about the place:

Welcome to Rancho De Milagro: A 30 acre luxury Horse Ranch Estate! Rounding the circular driveway, past the fountain and crossing the threshold, you'll enter this 3BR 2BA 2900 Sq ft Custom built Ranch Home, complete w/a gourmet kitchen housing custom cabinets, granite counters, stainless appliances & breakfast bar. An extended family room w/lake front viewing w/wall to wall custom windows. Detached office/lounge appx.1788 sq ft, outdoor kitchen w/bar & BBQ.3 RV hookups(elec, water, sewer, satellite TV),5 acre lake stocked w/a variety of fish in addition to several smaller ponds throughout the property, lighted show arena,5 stall custom barn w/tack room, covered/lighted 60~ round pen,3 large turn outs,9 stall covered Mare Motel,5 foaling stalls, hay barn has 24x72 concrete slab.3 irrigated pastures, Diverse ridding trails for even the most skillful rider. 3/4 Acre park w/patios, walk ways, horse shoe pit, and BBQ area. Property is fully fenced and landscaped beyond compare! Truly one of a kind, you MUST see! 

The ranch has only been active in the MLS since this past Tuesday, the 17^th of November just a few days after last week's indictments were handed down in court on Thursday the 12^th.  The seller has dropped their price by more than a million dollars - showing up in the MLS for $2,950,000 after it had been listed in the MLS and cancelled on June 16^th, 2009 by an out-of-area agent for the bargain price of $3,999,000.  The current price still is a bit steep for me at $100,000 an acre and only has a 3 bedroom house.

ISSUES WITH THE TITLE

Now anyone who has investigated real estate at all knows very well that there are often errors posted.  Remember the saying GIGO - Garbage In - Garbage Out.  Well that definitely holds true with public records. 

Now I'm not saying there is a problem here - only that questions are raised when I look at the basic information available to me, as a REALTOR® through a service provided by the MLS, known as ReaList.

When I click on the APN number in the MLS printout the RealList report opens in a new window.  The first thing I notice is the RED FLAG that says "BANK OWNED SALE".  This means the bank has already taken it back, yet the MLS Shows the property as a STANDARD SALE which means the owner is selling it and it is not under any distress, such as a Notice of Default or other proceeding.

The MLS says that the actual living space of the home is a 3 bedroom 2 bath home with an estimated 2,900 square feet, built in 2004.  The ReaList report agrees with MOST of this, but says it is only 2,450 sq ft.  So my question is did the builder/developer/owner commit some sort of other FRAUD in the plans and built it out larger than represented on all of the county and state paperwork in order to have the property taxes assessed for the lower square footage - it's lik3 17% difference.  I'd like to pay 17% less property taxes...anyone else?

SO WHO IS THE OWNER

According to the MLS, again, in the spot for the owners name it just says OWNER...OK, I can accept that.  Lets, however, look at the "sales history' as reported by the county assessor to ReaList. 

The earliest record available on this report is dated 1/23/2003 when Robert E. Osborne purchased the property from Rancho Kasanka for $275,000 - which is the last recorded Market Sale...except in the Last Market Sale section of the reports it appears as if Rancho Kasanka sold the property to Randy Schwetzer.  Remember this name, it comes up again.

The following June (2004) Robert did a "Quit Claim Deed" adding his wife (I presume) Patricia A. Osborne to the title followed by placing it in the Osborne Trust, on the same date with another Quit Claim Deed. 

Then on January 27, 2005 the property once again was transferred with a Quit Claim Deed to an outfit known as REO Investments, LLC (I have not yet been able to find out anything about this organization).

Just over a month later another Quit Claim was recorded transferring interest from Robert E. Osborne JR (first time this shows up) and Kelly (could this be a son and daughter-in-law?).  Once again multiple transfers on the same day then moved the title to the Osborne R&K Trust. 

Now I am all confused because the REO Investment LLC recorded a GRANT DEED transferring their interest to the City of San Jacinto and another Grant Deed on February 17^th, 2009 back to Randy Schweitzer, who apparently is a local businessman.

There are several questions that beg for answers...

First, who is Randy Schweitzer and REO Investment, LLC? 

Second, if the property was transferred to REO Investments, LLC in January 2005 how did it end up in the name of Robert E. Osborne Jr. 5 weeks later?

Third, if in the name of Junior, then how could REO Investment transfer the property to the City of San Jacinto in July 2008 and then again BACK to Randy Schweitzer in February of this year?

Fourth is the big question...what the heck happened in July of last year when the property was transferred to the City of San Jacinto...which coincidently is in the time frame that all of the voter fraud was allegedly taking place???  And Why Does the City NOT Show Up On Title Today? 

Is anyone else confused?  Well take a look at the short video and see what all the fuss is over.

San Jacinto, CA may be having more than its fair share of problems with the recent indictments of 4 of the 5 City Council Members - to include our Mayor and five others. I am not here to condemn. Convict or even pardon the actions of the accused.

Let's remember, they are only accused. Have you never been wrongfully accused at some time in your life? I know I had. At one point in my life I took the attitude that if the accusation is made then there must be some thread of truth to the charges. All I'm going to say it is downright scary what vindictive people can cook up and how lies can turn to truths before you know it.

So yes, this is AMERICA where innocence is GUARANTEED to be PRESUMED until PROVEN GUILTY and I as a Proud American and Citizen of San Jacinto, CA will do my part to ensure that the accused benefit from this core belief of who we are, as a free and democratic nation.

Regardless of what anyone says, myself included, it is all an exercise in futility if the current Council members do not either step down or are convicted of a felony...remember they are presumed to be innocent until they are proven guilty.

It seems that as a sleepy little farm town in the midst of a transition to the suburbs that we should be able to figure out how we want our city to progress. The scary news is that there are some very aggressive individuals pushing self serving agendas in the public forums.

Most of what I have heard has been from outside the city...almost as vultures circling overhead getting ready to swoop in for the kill.

The fist disturbing suggestion published in the local newspaper was for the city and Riverside County to defer to the governor to appoint any board seats, as they open up. I think this is so wrong because it takes us right back to the problem of political influence. I doubt if the Governor has ever actually been in San Jacinto let alone have any real understanding of our local issues...nor does he really care as a lame duck Governor.

The argument for this thinking was presented as a purely economical one, considering the cost of a special election. The election process could be compounded if each of the four Council Members decided to step down independently with weeks or even months between the announcements.

Even more frightening is the talk of combining Hemet with San Jacinto as a single city and eliminates the duplicate costs of running dual municipalities. The talk of a merger is seen as a good thing for those in Hemet who, in my opinion, have done a pretty good job of running their city into near bankruptcy and squandering their land use opportunities.

So in essence, the City of Hemet is near broke and has very little land left to develop once the market turns and opens up again. Meanwhile, the City of San Jacinto, who has been very progressive and well planned thanks mostly due to our current and previous City Council Members, stands on the threshold of major development and improvements. The City has the money to do what it both wants and needs to do...and the best part there is an abundance of undeveloped land that does not need to be annexed.

So I would like the local press to do their job and report what it is suppose to report and not use its resources to stir the hornets' nest and make more trouble than we already have. Let us, the people who live and work in San Jacinto take care of our own house...we are more than capable and don't need the old school Hemet political machine stepping in looking for a meal to devour.

I wrote an earlier article on this topic you may find interesting.

Last week San Jacinto CA was thrust into the national headlines as a hotbed of political corruption when 80% of the standing City Council - including our mayor, three local prominent business leaders, an elected official of the school district and a pastor from a Northern California church where charged hundreds of times with both felony and misdemeanor indictments.

The charges have mostly to do with a failed attempt of one of the council members desire to seek higher office in the State Assembly. The charges cover a wide assortment of accusations which include but may not be limited to conspiracy, bribes, money laundry, tax fraud, perjury and last but not least filing false government documents. Some of these guys are looking at up to 26 years in prison.

If you want the juicy details, this is not the place - follow the link above for a Google Search that will keep you informed with the blow-by-blow, as this story continues to unfold.

Lets Not Condemn...

I'd like to start by saying that until July of this year, when I moved to San Jacinto I have had a Hemet mailing address but lived in Valle Vista, an unincorporated community at the far east end of the Hemet - San Jacinto Valley. I opened my local real estate branch office in May of this year and moved into a new home in the city, July of this year. So I know San Jacinto as a neighbor looking in and now as a full time business owner and resident. If there is a slant in my opinion it is of love for this community.

As Americans, we all know that we are presumed innocent until proven guilty and that is why we here words like ‘alleged' and ‘accused' whenever we watch ‘Law & Order' or ‘CSI' on TV. Well, these people are not to be condemned just because they have been accused. I myself have been wrongly accused in the past and the implications can be very stressful when considering the possibilities of a final outcome that may well be beyond your control.

Actually, I have the utmost respect for what they have accomplished as a group. I do not know any of them personally other than having had breakfast with Jim Potts at a Chamber breakfast a couple of months back. Mr. Potts is a retired real estate broker and we certainly had a lot in common. I enjoyed the conversation. I even had some questions answered about road developments and future construction projects pending to take place in the city.

I also know, on a very low key level, one of the other accused - Nancy Ayres the wife of accused City Council Member Jim Ayres. Aside from being the San Jacinto Unified School District board member she is also the Executive Director of the San Jacinto Chamber of Commerce of which I am a member of the past 2 months.

I was talking about respect for the accomplishments that this group of civic leaders has accomplished by transforming this sleepy farm town that I first saw when I moved to the valley in 1998 to the robust suburban community it is today. These men had vision and were able to get some really great things done. For this, I respect every one of them.

WHAT NOW?

There is one City Council member who apparently always felt like an outsider and had little idea of what the other four were up to, according to his interviews I've read in the news. Councilman Steve De Memmo is the only member of the San Jacinto City Council that is NOT under indictment. The Councilman is a retired U.S. Department of the Treasury law enforcement agent.

Councilman De Memmo met with Riverside County Supervisor Jeff Stone to discuss options over the weekend, as reported again in the local news. Apparently there is nothing to do until either a standing Councilmember either resigns or is convicted - either by trial or plea agreement. One a vacancy opens up then there are two choices - the city calls for a special election or the governor can appoint a replacement to serve the remaining term. It is my understanding that two seats are currently scheduled to be voted on by the public in November 2010 and the other two in November 2012.

According to the news release, both Councilman De Memmo and Supervisor Stone would recommend that Governor Schwarzenegger make the necessary appointments when the time is appropriate.

SHOULD THEY STAY OR SHOULD THEY GO?

This is a tough call to make. As I said early on I do not think of them as guilty and certainly I will not condemn any of the accused here in my blog.

With that being said I do believe they need to resign - collectively. They have a whole bucket of trouble they are dealing with and whatever they do from this point forward will be done under a cloud of suspicion - at best. Working under this type of cloud cannot be good for the city

The legal troubles they have will undoubtedly consume much of their internal fortitude and be a distraction to the business of running the City of San Jacinto. It is my personal opinion that they should do the right thing and step down.

The other issue the accused should consider is their overall public posture. Most of us can remember when OJ Simpson led the authorities on a slow speed chase down the 405 Freeway when he was apprehended and there were not many who thought he was guilty...even though he was arrested at that point.

Then as the trial unfolded, most of us remember when the defense attorney had OJ try on the glove that did not fit and shout out, "If it don't fit, you must acquit". Well as it turns out, by that point nearly everyone I knew had already convicted OJ - even though he was finally acquitted and found ‘not guilty' of all the charges against him. Because OJ was such a public figure, we were all enthralled with what was taking place. On the other hand if he had not been such a public figure, none of us would have really cared very much about that trial or any of his subsequent legal problems.

My point is that as long as the Council Members remain in office they will be in the public spotlight and under very close scrutiny and opinions will form at every turn of events. Should they take the high road and resign their positions I am certain that they will have a much clearer head that will allow them to focus on their legal troubles...and if acquitted then by all means come back and claim their positions in the Council if the people of San Jacinto want them back. After all, they are here to serve the people and not their own needs.

APPOINTMENT vs. ELECTION

I suppose both alternatives have their pluses and minuses

The reasoning for supporting the political appointee is purely fiscal - both the Councilman and Supervisor say it will be too expensive for the city to run a special elections.

I say the City of San Jacinto needs to lick its own wounds and not be governed with a Council that could potentially include four political appointees from a lame duck Governor that already has more than his share of problems that he is facing in his own Sacramento arena with the State Legislature.

The residents of the City of San Jacinto need to demand an election and find new Council Members that can put the interest of the city before their own.

If those accused insist on remaining in office, then I believe there should be a grass roots movement to recall the four accused Council Member as well as the School Board member. San Jacinto should not rely on the best interests of our lame duck governor to decide our future.

I've said my piece...now it's your turn San Jacinto...speak out...

I just received an email from ReaLegal®, brought to me by the California Association of REALTORS® that an announcement of a form revision.

This post really did start off as a simple review of the form and changes that are now in effect. Read the whole blog and find out that it is much more than that...

The REO Advisory (CAR form REO) has been updated to include the notice that Buyers of REO properties in the State of California (which include the Hemet - San Jacinto Valley, CA by default) that they are not required to purchase escrow services or title insurance from any particular company...let alone the company that the seller has previously mandated.

The new law is called the "Buyer's Choice Act" that became effective on October 11^th, 2009 - the day Governor Arnold Schwarzenegger signed it into law. This new California law is for the convenience of buyers of residential property - up to four units. Personally, I do not think it offers the buyers any type of protection and if anything will actually cause more harm.

From an economic point of view, if the seller is contracting with escrow and title companies for services and insurance - they are doing so on a wholesale level, which in turn reduces the closing costs for the buyers.

The real concern I have is if consumers start insisting on a any they may be dealing with one that has not developed an expertise in this very narrow niche. I say this, because 2 years ago most of the escrow companies that helped me close my REO listings were relatively inexperienced when it came to working with REO's. Today, without exception every REO Escrow we open is like a well oiled machine - it works like clock-work. So "why fix what ain't broken?" My Grandma used to ask me and it's a darn good question right now!


AGENTS EXCLUDED TOO

The other provision the buyers are informed of is that their AGENTS cannot require that a buyer use a particular escrow or title company...even if they have one in-house, as many do.

By using an in-house escrow or title company you can be assured that the needs of the broker are met first and foremost and that this additional service is a huge profit center for them. Hey, there is nothing wrong with profit. In my opinion though, if a Broker is making money on the transaction and then possibly the loan, the escrow and maybe even an ownership interest in the title company than they need to cut some of their fees for the use of the full all-inclusive list of broker services.


CLOSING THOUGHT

I'm not saying this is right and I'm not saying it's wrong and I'm certainly not saying it has been done or that it will be done...but think about this...

A new bank-owned reo listing for a home for sale in San Jacinto is just listed in the MLS and it generates lots of excitement and multiple offers.

The bank considers all of the offers on all aspects of the offers, including price, length of escrow, down-payment, seller contributions, seller concessions and all of the other proposed terms...and narrows it down to two offers that stack up very evenly when looked at side by side...

EXCEPT one wants to use a local escrow affiliated with the buyer's broker that the seller has never done business with in the past and has no idea what their level of REO experience or their efficiency at processing and closing escrows on time and the other asks the seller to pick a company of their choice.

Remember now, the banks and asset managers, who are real people that put their pants on the same way you and I do, have formed relationships...even friendships with escrow officers and title reps that have gone above and beyond through the thick and thin of the last several years and now they get to decide on which offer to accept (remember all is equal). Does it not make sense that the PERSON who makes this decision to ACCEPT YOUR OFFER may lean towards a PERSONAL BIAS and allow them to use the vendors of their choice?

So, for me and my team...when we represent a buyer in an REO transaction for a Hemet - San Jacinto Valley home for sale we will always defer to the sellers choice and be glad when we get our offers accepted.

I met with an investor client for the first time yesterday afternoon after spending a short time on the phone with him, after he found me through my Internet presence (can't be sure, but I think it was from here- ActiveRain).

The REO property he had definitely wanted to see was a newer 4 bedroom home listed in the mid $140's. Unfortunately for him it went into escrow on Friday. Good for me, because it just reinforced what I told him during the week - that good house sell very quickly in this market.

Once we got together, we went over 7 homes that I had picked out, researched and mapped a tour of. As we sat in the office, I realized that he has been going through an hands-on training program presented by a popular TV personality that is making a lot of money flipping homes.

It seems there is a formula for the homes the students are bird-dogging to find that will allow them to pick up homes for 50% to 60% of market value. Of course for it to be a good deal, a popular website that focuses on foreclosures must give it and the area all ‘green arrow'.

I explained it's not that we don't get an occasional deal or two like that in Hemet - San Jacinto. The problem he will find is when they happen, usually the agent of agents close friend/client will have first shot at it and rarely will it ever hit the MLS, as all REO Listing agents are doing good business with Investor Clients.

I then had my conversation about flipping equals cash flow and holding generates true wealth. Now this gentleman has some cash and he has excellent credit - so these issues should not pose a problem. Heck he even already has 3 investment properties including a duplex and a four-plex...so he has some good sense of what is going on in the world of real estate investing.

Because my new client and soon to be new friend (we got along great) had been drinking the guru kool-aid he know about ‘hard money' but thought it was only for flipping. Well this opened up a great discussion that ended with me referring him to my client/friend/hard-money lender Colleen Bigler of Loan Solutions, Inc. who provides hard money loans for longer term strategies - up to 5 years.

The conclusion of this little tale is that my new friend still likes bird-dogging but he also realizes the upside potential of acquiring more property and leveraging his cash with hard money. When we get together next week, we will have a whole new profile of properties to look at and consider.