During the real estate boom an influx of investors entered the New York City market. Some of these investors profited from flipping properties while others bought properties and rented them for extended periods of time. We represented one specific investor who had purchased several properties in the City. With the downturn in the market, he was no longer able to find the tenants to rent to that would pay the rent required to sustain his debt service. Unfortunately he was left with no other alternative but to sell, however, selling in the current market would cost him to lose his entire equity position in the properties.
We had successfully closed on a couple of his investments, but had difficulty with the last one. Our client ended up being in arrears for over 6 months in his mortgage, common charge and real estate tax payments. He received a significant amount of interest in the property, but had 3 deals either go into contract or come close to contract that died. Throughout this process the amount of his arrearages increased and the condo association had obtained a judgment against our client for his failure to make his payments. We negotiated with the condo association and the bank to hold off on enforcing the judgment and foreclosing on the unit.
We entered into a contract with a bona fide purchaser and used this contract to demonstrate that the proceeds from the sale are sufficient to satisfy the full amounts owed to the NYC Dept. of Finance, the condo association and the bank. We reached the closing table 60 days after entering into contract and by this time the sales proceeds were slightly short of satisfying all of the outstanding sums owed. We were able to negotiate with the bank to waive certain fees they were charging as a result of the default in the mortgage and were able to successfully close without this transaction adversely affecting our client’s credit and without the bank initiating foreclosure proceedings.