Attorney sees his opportunity, switches to real-estate investing [South Florida]

Attorney sees his opportunity, switches to real-estate investing [South Florida]

Southwest Florida has long been fertile ground for lawyers with a hankering for investing in real estate.

Chad Gates simply represents the latest iteration of the trend.

Using largely borrowed money, Gates and his partners have spent more than $16 million to buy raw land, office buildings, strip centers and condominiums from Punta Gorda to Bradenton over the past four years.

Though they have sold eight of the 17 properties they purchased at a profit of more that $2.4 million, they retain a $10 million investment portfolio.

Foreclosure flood

Foreclosure flood

In real estate, timing is everything. That’s what David Elosegui discovered when he made an offer on the Lake Orion house he fell in love with in February for himself and his daughter.

“I went to make an offer and the bank said the house had just gone to auction,” said Elosegui, who wanted to offer Wells Fargo Bank — the home’s owner — $214,000. The house had been listed by a Realtor for $220,000 but had gone into foreclosure.

The following weekend, he walked away with his dream home from an auction of foreclosed properties conducted by the Texas company Hudson & Marshall. He had made the highest bid — $179,000.

“It was surprisingly easy,” said Elosegui, who divorced in May 2004 and had been living in an apartment since June 2005. “I knew I would be willing to bid a little higher than an investor.”

Facing new fields of fraud

Facing new fields of fraud

In the 1990s, Peter J. Porcelli made millions with laser printing and junk mail and poured part of his fortune into the Tampa Bay Smokers, a fast-pitch softball team that featured a cigar-chomping mascot and the best players money could buy.

Porcelli became the king of the sport as his Smokers won two world championships in three years.

But Porcelli was also gaining attention for another kind of fast pitch, a deceptive direct-mail and telemarketing come-on that cheated consumers.

Two months ago he was indicted on conspiracy and fraud charges involving a credit card scam that targeted 165, 000 victims. He pleaded guilty Friday to all 19 counts.

Seeking bargains on top-dollar properties at auction [South Florida]

Seeking bargains on top-dollar properties at auction [South Florida]

It was like a folksy old-time revival crossed with a white-knuckle, high-dollar real estate sale.

The Sky Sotheby’s/J.P. King real estate auction — offering one of the largest luxury home portfolios ever presented in a single swoop — drew an overflow crowd of 300 people to a huge white tent on the front lawn of the Ritz-Carlton Sarasota.

What the event showed even those in Southwest Florida’s all-important real estate industry who decided to bypass the gathering was that people are willing to buy, but definitely not at top dollar.

Some properties only generated half of their listed prices, while others commanded up to 80 percent.

Residential Slowdown

Residential Slowdown

Mordechay Shahak and his six-acre Wellington estate don’t fit the profile of a homeowner caught between rising interest rates and a cooling residential market, but his lender is moving against the 9,080-square-foot house.

Shahak paid $2.3 million for the property with a large pond in December 2004. The property is for sale, listed at $4.9 million. If it sells, Shahak will need much of the proceeds to settle a foreclosure action filed by Zuni Mortgage Loan Trust in March for $2.8 million.

As foreclosures soar in a weakening residential market, Wellington has the dubious distinction of ranking No. 2 in the region in foreclosures by dollar amount. It has less than 1 percent of the region’s cases but still had more than $166 million, or 5.6 percent, of the foreclosure value, based on an analysis of regional foreclosure data by CondoVultures and the Daily Business Review.

Real estate firm’s collapse worries investors [Northern California]

Real estate firm’s collapse worries investors [Northern California]

Millions of dollars in real estate investors’ money has apparently disappeared with the collapse of a firm that helped investors in Silicon Valley and elsewhere buy and sell property and defer paying capital gains taxes.

1031 Tax Group of Richmond, Va., which operated in San Jose as 1031 Advance, filed for bankruptcy in New York City over the weekend. But even before then, it had become the subject of investigations by the U.S. Postal Service and U.S. Attorney’s Office in Virginia.

The company specialized in an increasingly popular property transaction known as a “1031 exchange,” in which the role of intermediaries such as 1031 Tax Group are not regulated.

The firm’s bankruptcy filing lists huge creditors, including a couple from Los Altos who trusted the company with $10.6 million, and a Portola Valley woman who handed over $3.3 million.