Why I'll Never Buy Real Estate Again

Why I’ll Never Buy Real Estate Again

Forward

The American economy was derailed by the 2008 real-estate market-crash, and the recovery has limped along since then.  Unfortunately the root-causes are still in place and the damage continues.  Don’t expect the real-estate market to recover anytime soon.   Until then – buyer beware!

Summary

After my “fire baptism” in the world of real-estate I’ve decided I’ll never buy again because I can’t accept the risk of a title that’s perfectly legal but not worth defending.  The chain-of-real-estate-title is tainted by a combination of irresponsible-borrowers and reckless-lenders (mainly the mega-banks) that won’t do a thorough title-search before lending their money.  Lending-standards have tightened since 2009 but the fundamental problems remain.

Introduction

In 2012 I wanted to start a tree-nursery operation in the state of Kentucky by purchasing 1 acre of rural-property near the Cumberland National Forest.   It was well-situated for my purpose at a cost of $3,500.  I hired a real-estate attorney.   His title-search at the county-courthouse showed the current-owner/seller did not have a clear-title to the land though his legal-deed showed rightful-ownership.  The property’s history explains why.

Incomplete Title Work in 2001

In 2001 the 1-acre property was subdivided from a tract of land that was originally more than 100 acres.  Out of ignorance the large-tract-owner did not revise his deed for the piece that was subdivided, and he saved a trivial sum of money.   The 1-acre property-owner recorded his deed at the county-courthouse.

Defective Loan in 2001

After the sub-division-transaction the 100-acre owner borrowed money from Countrywide Real Estate with a “liar loan.”  He submitted his original “unrevised” property deed that included the subdivided-property as collateral and he borrowed more money than the property was worth.

Due Diligence Failures 2001 - 2006

Countrywide did a title-search from their location in another state -- meaning they did not go to the county-courthouse.  Countrywide folded in a national real estate scandal and Bank of America took over the loan.  They did their title search from Dallas, Texas.  They didn’t hire anyone to research the county-records at the courthouse.  Their title-information was no better than Countrywide’s, and they used the “unrevised” deed as collateral for the loan.

Property Foreclosure in 2009

In 2009 the 100-acre-land-owner foreclosed on his property including the house that he lived in.  He ceased making his payments. 

Mega-Banks don’t do “Real” Title Searches

I entered the picture in April of 2012.  Posing as a potential customer for a mortgage loan on the property, I discussed the title-history with a BAC loan-officer.  I asked why they didn’t hire an attorney to review records at the county-courthouse before they made loans.  He explained -- BAC has an umbrella title-insurance-policy that covers all the good along with the bad real estate properties, and they pay a fortune for it.   As long as the customer makes payments they don’t really care.

Bankruptcy Proceeding in July 2012

In July 2012 BAC launched a lawsuit against the100-acre property-owner. The entire property will go up for auction including the 1-acre tract rightfully owned by the third party who offered it to me.  It will cost more than $10,000 to defend a piece of property worth $3,500 – obviously a loss.   I lost about $1,000 on the surveying costs and legal fees.  The third party will lose his one-acre property. The 100-acre landowner loses his property and residence.  The land is worth less with poor title-work – hence the county will lose on property-taxes.  The state and federal government lose tax-revenue on a small-business start-up that never happened.  Even the bank loses – they won’t fully recover the loan.  In short - everybody loses.

Conclusion

A small real estate buyer can’t afford the risks that banks routinely absorb, and title insurance does not solve the problem.  This drives down property values.  It’s little wonder that the real-estate market is feeble and that our local, state, and federal governments are having money problems. 

Pawpaw Seeds (Asimina Triloba) for Sale in 2012

The pawpaw fruit harvest is in for 2012 and it's been good.  I have thousands of seeds available.  Check them out at the American Seeds Web-store 

Kentucky Champion Pawpaw Tree 2012

The Kentucky Champion TM pawpaw tree had it's best year after 4 years of recovery from record ice storms that broke off the south half of the crown and the largest limb.  It started bearing on July 22nd and it had 31 pounds of fruit from 53 pawpaws that averaged 265 grams each (more than 1/2 pound).  Nurseryman Cliff England and I sampled the fruits pictured below.  According to him it was one of the best he's tasted.   He's selling grafted-stock at the England's Nursery website.

384 gram pawpaw fruit shown above, 398 gram shown below.

 

 

The story of the champion tree was featured in the Richmond Register newspaper.

 

This spring I discoverred a stand of crossvine that I found exceptionally beautiful.  Eventually I plan to sell it under the name "Kentucky Beauty":

 

 

So far I have successfully propagated some cuttings from this vine.  The seeds were destroyed by larvae from a parasitic moth.



Early Bearing Pawpaw Trees

It's early August here in Central-Kentucky and the International-Pawpaw-Convention at Kentucky-State-University is more than a month away followed by the Ohio-Pawpaw-Festival -- long-after the fabulous early-bearing-trees drop their last-fruits to eagerly-awaiting pawpaw-snatchers like me. Are we in a different time-zone or what?

This year I'm reporting on two early-bearing-trees: the Champion-Tree in Richmond that started bearing on August 5th and a new discovery dubbed "Early Bell" that's located near the Bell House in Lexington, and it officially bore it's first ripe fruits on July 29th. The season has experienced some record heat-waves that appear to have caused a moderate degree of skin-scorching and uneven fruit-development on the Champion Tree, but the Bell tree was apparently unaffected.

As far as I know Early Bell, as it were, takes the prize for christening the 2011 pawpaw harvesting season. Bell has a very mild and moderately sweet-tasting fruit with only a hint of tropical pawpaw-flavor and NO bitter after-taste -- a good beginner's pawpaw. This was confirmed by two young bystanders on the scene, Phil and his lady-guest that have never tasted pawpaw fruit before. I asked him to save a few samples for the KSU pawpaw curators, but I can tell it's gonna be slim pickings as the pawpaw tree is in Phil's back-yard, and he took an immediate liking to the discovery.

Bell's medium-to-large fruit bears a double-row of long finger-shaped seeds that are sometimes wispy like Peterson's Rappahannock pawpaw seeds. The seed-count and weight is about average and the seed-sacks are cling-free, making seed removal easy.

As I said before, this is quite early for pawpaw fruits. It makes the International Pawpaw Conference seem like the World Baseball Series played in snow... speaking of which I hope to bring frozen-fruit-pulp popsicles to the Conference as tasting-samples to pass-out during my presentation. That should make an impression!

Early Bell Tree Fruits (2011)

Note the plump shape and fruit clusters up to ten or more

Bell Tree Lexington, KY

KY Champion Tree Fruit Slices (2011)

Champion Tree Fruit

Note the size and rugged skin form.

Corn Rows Down Wall Street

Associated Press Business Writer, Bernard Condon, writes about a coming wave of investors turned into wanabee farmers. Farm-land is getting snapped up to fuel the next bubble. Buyers beware!

http://finance.yahoo.com/news/Down-on-the-farm-investors-apf-2437798760.html?x=0&sec=topStories&pos=9&asset=&ccode=#mwpphu-container

Before you abandon your day job for an entrepreneurial farming career ask yourself a serious question -- Is farming really for you? I'll give you a hint: it isn't for the couch potato or the derivatives-trader that works in an air-conditioned skyscraper. It's physically demanding work.

If you're serious about agriculture you need a good business strategy. You'll have a hard time surviving against seasoned, well-financed, large-scale producers that grow and sell standard food commodities. The best opportunities are in niche farming, the subject of this web-blog. It's done on a much smaller scale for a select group of customers that want specialty food-products that aren't suited for large-scale farming.

KY Champion Pawpaw (Asimina Triloba) Tree Scions Available for 2011 Season

Reporting from Central Kentucky

The champion tree looks good for another growing season. As of February 20, 2011 grafting scions are available at the web-site until they are sold out:

https://sites.google.com/site/nativeamericanplants/American-Seeds-Catalog/pawpaws/ky-champion-pawpaw-tree

We already knew the champion pawpaw tree has a very large tasty fruit.

Pawpaw fruits about the size and weight of a 12 oz soda can.

The pleasant surprises keep coming in such as:

Last summer the champion tree was ahead of all cultivars at KSU. We tasted three very large and ripe pawpaw fruits before August! All of those were 270 grams or larger. If anyone knows of an earlier-bearing pawpaw tree please let me know. This is a genetic trait by the way.

Last spring we grafted some scions, and one of those has 3 flower buds this year – so it looks like precocity is in the genes as well!

Tree graft in first year. Note 3 flower bud formations.

I’m looking forward to another year of surprises as we compare DNA with a stand of pawpaw trees at Ft. Boonesboro about ten miles further down Otter Creek from here. As I understand it, pawpaw fruit was Daniel Boone’s favorite and I’m certain he came across a lot of pawpaw trees in his wilderness adventures. Anybody going to the fort would be quite unprepared to stay without food provisions -- especially under Indian siege. (Boone was captured by the way).

What would a fort be without heir-loom seed-gardens and a few top-choice selections of pawpaw trees around the grounds? That would be kind of like a home without a refrigerator!

Happy gardening!

pawpawman

2011 Announcement: Pawpaw Seeds, Scions, and Seedlings for Sale

A quality assortment of pawpaw tree propagation materials are available for the 2011 season. Check out these offerings in the American Seeds Catalog of the e-Trading Path website.

American Seeds Catalog

Please stay tuned to Craig's List announcements starting around late March and continuing through June of 2011.