California Insurance Department officers arrested Madjlessi last week for insurance fraud.
Bijan Madjlessi, who controls the Belvedere Towers condominium project in downtown Reno, has been charged with felony insurance fraud in making multiple claims for losses after the building caught fire nearly three years ago.
Possibly the more interesting parts of the story are the comments that follow.
Read the article here.
Washoe County recently conducted the sale of tax delinquent properties. According to Nevada statutes the properties are placed for sale if the taxes have not been paid for at least three years.
The RGJ reported on the purchase of 92 condominiums by David Lonich, the attorney representing Bijan Madjlessi of Belvedere LLC. Madjlessi planned to market the condos in the Sundowner’s north tower, but the economy and the real estate market soured and he was unable to sell as planned.
The lawyer for the developer of downtown Reno condominiums — converted from rooms in the former Sundowner Hotel and Casino — on Wednesday purchased 92 of the condos for nearly $2 million at auction, after his client was delinquent in paying nearly $800,000 in taxes to the county.
But, here is the part that the RGJ, for whatever reason, did not tell.
The story was related to me by people that had attended the Washoe County Tax sale last week.
Lonich bought all 92 units and experienced little or no competition. Others bid on some of the properties, but were all out bid.
The nature of the tax lien is that it is superior to all other liens. Consequently, when a tax sale is conducted, all other liens are wiped out.
So, what else was wiped out? Since the taxes take precedence over all else, any financing, or mortgage loans were eliminated. According to notices of default totalling approximately $47.9 million, debt in that amount was eliminated, completely. The RGJ reported that the property was purchased for $7.89 million. I’m not clear how debt could grow to 47.9 million. Nevertheless, it would appear the banks lost, big time.
Likewise, public records showed a total of 359 liens had been filed against Belvedere LLC and the property. Some of these liens may have been satisfied, but this has not been verified. A total of 771 documents have been recorded associated with Belvedere LLC and I have not reviewed all of them. These liens have all been completely wiped out by the tax foreclosure. Each of these liens represents someone that Belvedere LLC owed money, and each was left holding the bag.
Contractors didn’t get paid. Vendors didn’t get paid. The HOA didn’t get paid. and even the City of Reno didn’t get paid.
Now, I believe that some of these liens may have been satisfied because some of the units may have been sold but this has not been verified. Therefore the total numbers may vary a bit, but this is still close.
And what did Madjlessi lose? You may be surprised to learn that he fared a bit better than his associates, the banks and the contractors and vendors. He was able to eliminate $47.9 million
in debt for a mere $2 million and he got a lot of his building upgrades for free.
It’s nice work if you can get it.
Here’s a podcast with peter Padilla and Leslie Henderson discussing short sales.
Henderson & Padilla: Ease The Pain of Short Sales & zero down on the VA Mortgage! May 15, 2011 by NevadaRealEstateRadio
The Median price for homes in the Reno/Sparks area is now $5000 below 2009.
The RGJ reports that Reno home prices continue to fall. Buyers are sensitive to price (is that a surprise?). Both home prices and the number of homes sold were lower than last year.
Incline Village was the exception with the sale of 36 condos.
I try to link to any story, but I was not able to find this on line. This story appeared in the Sunday print edition. The RGJ seems to want to have some of its content “Only In Print.” Are they ashamed of their product?
Las Vegas was rated as the most undervalued real estate market in the nation. The rating was made by Local Market Monitor. Las Vegas was also rated as the worst housing buy. How could that be? I would assume that Las Vegas, like much of Nevada is still facing a massive number of foreclosures.
The list contains 15 under valued cities and 8 over valued cities. The Reno-Sparks area was not on either list.
I don’t know all of their criteria, partly because I was not willing to pay for the information.
For more about Nevada real estate values.
More news stories gathered from around the web.
The Reno/Sparks area is listed in this story about the ten worst housing markets.
Fernley showed a 3.7% median price increase for the month of June.
Reno is named in Outside Magazine list of 25 best towns as “Best for Whitewater”. The magazine, attempting to be cool and cosmopolitan, sticks up its nose at our best qualities.
Reno still conjures images of cowboy/gambling kitsch at its worst.
Nevada real estate markets are still struggling.
In some areas of the United State, there has been significant improvement. However, some states are still struggling to recover, especially with unemployment still being an issue.
Here’s a fluff piece from USA Today that tells why Reno would make a good location for a second home. It touts the virtues of the area, such as Lake Tahoe, the Sierras, the Truckee River and activities and events.
Specific mention was given to the downtown area, Sparks and South Reno.
Check out this story: The Thirteen Housing Markets That Will Never Recover.
More specifically, see # 8.
Now, I don’t know what information they are privy to, but I thought it might be interesting to view.
I post this without comment.
Las Vegas home sales fall 11 percent in June: LVRJ
Nevada a bigger loser than California in economic downturn: Sac Bee
Realty downturn claims Nevada Security Bank: NNBW
Short Sales Out Perform REO & Traditional Sales In June: Dickson
Freddie and Fannie Delisted: RSRE