Since the mortgage meltdown and housing crisis, I have been saying in my presentations that “the banks realized they couldn’t fix the problem, the government realized they couldn’t either, so it is up to entrepreneurs like us to fix it”. I still believe that it is an accurate statement and when the government passes rules, regulations and laws that negatively impact entrepreneurs, the problem gets worse.

Case and point is this article in

So many misguided rules and unintended consequences.

Property Taxes

As the article says. They did a horrible job enforcing tax collection. While this may help people avoid foreclosure for non-payment of taxes, it also made the purchase price of the property unattractive to real estate and real estate note investors. So, what happened? People didn’t pay taxes, the tax amount accrued and then they just left. A new investor will not only have to purchase the home but pay off the accrued taxes which often makes it un-purchasable.

Foreclosure Judges

Although not mentioned in the article, there was a Judge in Cleveland that was notorious for making it difficult and expensive to foreclose on loans. Because of this, investors just avoided the entire county.


Why would a lender want to lend in an area or zip code when it has a problem with vacant homes? Higher crime rates, rodent infestations are just a few of the problems that affect property value in these areas. The other issue is that, because of the Dodd-Frank Act, lenders simply can’t make any money on small balance loans.


The solution seems pretty simple to me: incentivize investors and then get out of the way!

Kevin Shortle