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Real Estate Investing Forums | Real Estate Investing | Bird Dogs, Wholesaling, Flipping Properties Forum (Moderators: $Cash$, Bluemoon06, kdhastedt, Mdhaas) | Topic: He wanted to grow Cannibas on my Rental Property
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Randoskie
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« on: September 06, 2017, 08:38:45 PM »

I had this 2/1 fixer out in some hour drive farming town, it was headed to foreclosure and the seller just signed it over to me with a quit claim deed. He hadn't made a mortgage payment since the big flood and it was way under water. I decided to see if I cud rent it out till the bank took it.
One of my applicants was a big Mexican guy. He was well dressed, well spoken friendly, nice car and said he will pay me 6 months in advance.
We walked out in the back yard that over looked over a full acre out in this little farming town. He did ask if it was OK that he grew some marijuana & he had a medical license..
He had 6 months rent and cash on the spot, I took the money and ran.
Now California has legalized it, these new small farmers can make a good living growing this stuff even though they need a license to sell it, yea everybody will follow that rule.
Anyways, I been reading about the green rush to Colorado, its been legal for a yr or 2 now, people moving there to grow and there are fortunes being made, real estate prices are going up. I live here in this huge Ca valley with prime growing real estate.
There cud be some serious opportunity here.
And its Legal...
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davewindsor
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« Reply #1 on: September 09, 2017, 08:42:42 AM »

I had this 2/1 fixer out in some hour drive farming town, it was headed to foreclosure and the seller just signed it over to me with a quit claim deed. He hadn't made a mortgage payment since the big flood and it was way under water. I decided to see if I cud rent it out till the bank took it.
One of my applicants was a big Mexican guy. He was well dressed, well spoken friendly, nice car and said he will pay me 6 months in advance.
We walked out in the back yard that over looked over a full acre out in this little farming town. He did ask if it was OK that he grew some marijuana & he had a medical license..
He had 6 months rent and cash on the spot, I took the money and ran.
Now California has legalized it, these new small farmers can make a good living growing this stuff even though they need a license to sell it, yea everybody will follow that rule.
Anyways, I been reading about the green rush to Colorado, its been legal for a yr or 2 now, people moving there to grow and there are fortunes being made, real estate prices are going up. I live here in this huge Ca valley with prime growing real estate.
There cud be some serious opportunity here.
And its Legal...

Yes, there's "some serious opportunity" ...  To lose money.

Marijuana is legal in California and Colorado under "state" law, but illegal under "federal" law. 

The Colorado Supreme Court recently reversed two lower court decisions and upheld a seizure of 75 marijuana plants under Federal Law from a case posted in the Colorado Independent in June 2017 raided by CSPD  https://www.csindy.com/coloradosprings/cops-can-destroy-seized-marijuana-even-if-youre-growing-it-legally/Content?oid=5856850

You can be found not guilty under state law because he had a marijuana license for leukemia, but the police can still seize and keep the property under federal law.

Now, if the state police can raid under federal law.  Just think what could happen if federal DEA agents raided the property under federal law.  What do you think a federal court judge would say?  They could seize your house as proceeds of crime under federal law, especially since you just admitted you knowingly knew your tenant was growing marijuana plants there.   

Beware.
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Dmccright
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« Reply #2 on: September 09, 2017, 09:43:55 AM »

Sounds like a good idea for short term cash but definitely a Grey area where cops love to hit you hard. I think I would stick to the don't ask don't tell approach.
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davewindsor
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« Reply #3 on: September 09, 2017, 11:25:13 AM »

Sounds like a good idea for short term cash but definitely a Grey area where cops love to hit you hard. I think I would stick to the don't ask don't tell approach.

I wouldn't stick to the don't ask don't tell approach either.  If the DEA does a seizure and lays a charge against you as landlord for not reporting it, you'll get treated as that tenant's partner in crime and now have to defend yourself.  Spending over hundred grand on a criminal lawyer charging $400-$800 an hour to clear your name and recover a seized building is not a sound business plan for success either.   It's best to make a thorough effort to avoid those kinds of tenants unless it also gets legalized at the federal level.  Don't do business with criminals.  It's not worth the liability.

I can only imagine how many hundreds of thousands that guy spent showing up with lawyers to three courts over 75 plants.  The government has unlimited resources.  You either loose to the government or you lose to the lawyers.  You can't win.
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« Reply #4 on: September 09, 2017, 12:45:32 PM »

Sounds like a good idea for short term cash but definitely a Grey area where cops love to hit you hard. I think I would stick to the don't ask don't tell approach.

I wouldn't stick to the don't ask don't tell approach either.  If the DEA does a seizure and lays a charge against you as landlord for not reporting it, you'll get treated as that tenant's partner in crime and now have to defend yourself.  Spending over hundred grand on a criminal lawyer charging $400-$800 an hour to clear your name and recover a seized building is not a sound business plan for success either.   It's best to make a thorough effort to avoid those kinds of tenants unless it also gets legalized at the federal level.  Don't do business with criminals.  It's not worth the liability.

I can only imagine how many hundreds of thousands that guy spent showing up with lawyers to three courts over 75 plants.  The government has unlimited resources.  You either loose to the government or you lose to the lawyers.  You can't win.

I've worked with the ATF and DEA. They are mostly after high dollar amounts and harder drugs. Yes CO pisses them off but it's like a cash cow for them. At any point they can raid business because they are brick and motor. Local officials don't work with them either in certain states like CA and California and if they happen to be Hispanic its even more of a closed book because of deportation. Needless to say small time equals no time in CA.
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Bill H
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« Reply #5 on: September 09, 2017, 08:24:32 PM »

Dave Windsor is correct. Probably one third to one half of all  police vehicles are either siezed or bought with drug $$$. 

They hve the right to and do take action.
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javipa
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« Reply #6 on: September 10, 2017, 12:08:47 AM »

There is NO way I would allow a tenant to break federal law, regardless of state law.  The state won't defend you against a federal offense.

Worse, congress recently passed a law that allows federal authorities to seize assets (cash, real estate, personal property) of anyone they ONLY 'suspect' is breaking the law.  They don't need proof or evidence, just a suspicion.  We are now guilty until we prove we're 'not guilty' of a crime. 

Thank you Republican-controlled RINOs for legislating against the people and the constitution.

This asset forfeiture deal has been around for a LONG time, and when I discovered tenants dealing drugs out of my building, I covered myself by calling the tips hotline to report the crime. 

Meantime, one afternoon about twelve people started trailing into my building, and it was obvious they were buying drugs from one of my tenants.  I had no idea a sting operation was occurring and successfully blocked one of the undercover agents from coming into the building.

Later, two men in black suits visited me in my office, and my heart was pounding, thinking "Uh, oh, I'm going down for drug dealing."  They asked me if I was the owner, and wanted to know if I could identify certain tenants in my building, and if so, would I be willing to testify in court.   Of course, I said, "Yes" to everything.

Two days later I showed up to court as a government's witness, and the same undercover officer that I shewed away a week earlier in the sting, came up to me, and asked if I recognized him.  I laughed, and said, "You bet!"  He told me that he couldn't legally go into my building after I told him to leave, but then he said, "You won't need to testify as a witness after all, because as soon as the defendants saw you, they 'caved' and plead guilty."  He had a big smile on his face, and so did I. 

Notwithstanding, I insulated myself from any asset forfeitures, because of my proactive efforts and cooperation to rid my building of criminals.  Usually real estate seizures involve personal property and houses of drug dealers, not apartment buildings occupied by dealers, but I was taking no chances.  Plus apartment buildings involve a lot of third parties and if there's no equity, are impossible to liquidate.  Another reason to borrow out as much equity as possible from your rentals.  It makes them that much less attractive to anyone whom might be interested in your equity.

FWIW
« Last Edit: September 10, 2017, 02:13:16 AM by javipa » Report to moderator   Logged

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Randoskie
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« Reply #7 on: September 11, 2017, 01:34:47 PM »

You guys got me all paranoid. I almost went out and pulled up my plants. Yea the power the Gov has is scary, but I choose to not live in fear, and with my real estate knowledge I know I can bounce back.
The voters have spoken, California is excited, they wont be able to keep up with the mass numbers of law abiding legal growers and users.
If I got a renter that pays his rent and wants to grow some medicine for his sister that has cancer and pay me 6 months in advance, then I'm your new daddy.
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mcwagner
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« Reply #8 on: September 12, 2017, 05:45:52 PM »

Ha.  I've actually had 3 clients who spent time as a guest of various state institutions for using their rental properties as grow houses.
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Mark Wagner, CPA, LLC
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Randoskie
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« Reply #9 on: September 18, 2017, 03:47:05 PM »

My marketing is bringing in some calls. And this is exactly the type of property that I was targeting..
Imagine this, an old farm house built in 1945, a 3/1 on 2 1/2 acres and out in this godforsaken little jack rabbit town.
The old guy living there has passed on, his sister that lives in NY calls and says the house is in bad shape, never upgraded.
I decide its worth about 145K after repairs. She wants to know what I will pay. It's been empty for awhile, she is paying property taxes and a bunch of money to keep 2 1/2 acres of weeds cut down several times a year.
This property has irrigation water from a nearby canal. Remote Farming area, citrus trees across the road, next door has a nice house with a bunch of newer looking huge green houses.
I know I can add a 20-30K assignment fee and find some local prospective cannabis grower that will pay a premium for this property. Seller seems like they cud be motivated, they live 3,000 miles away and the house is empty costing them money.
Now for a plan of action...

Craig's List Ad

Growers Paradise, 2 1/2 acres farm, fenced with a 3/1 house, remote, near the quiet little town of Orosi California,
Fertile land, with irrigation if needed. Older house needs updating but is livable with some repairs. $119,500
Call Rando

I cud also market it to horse people, I'm gonna drive the 43 miles and check it out, & try to get it for 80K
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Real Estate Investing Forums | Real Estate Investing | Bird Dogs, Wholesaling, Flipping Properties Forum (Moderators: $Cash$, Bluemoon06, kdhastedt, Mdhaas) | Topic: He wanted to grow Cannibas on my Rental Property
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