Jim McConville’s real estate empire continues to collapse, and there’s a fourth complex in San Diego County that has been affected.
In a letter that McConville wrote to the developers of the Escondido complexes, he mentioned his recent real estate deals to bolster his credentials. Among them were the 300-unit complex in the Kern County town of Ridgecrest we wrote about last week, and a 42-unit complex in San Diego on Linda Vista Road.
More than half of the condos at the Ridgecrest complex, and 33 units at the Linda Vista complex have fallen into foreclosure. The Union-Tribune described the fallout at Linda Vista property on Saturday.
While similar in many respects, the transactions involving the Ridgecrest and Linda Vista complexes have a couple of key differences from those involving complexes in Escondido and San Marcos.
Like the Ridgecrest complex, the transactions in the Linda Vista complex preceded McConville’s deals in two complexes in Escondido and one in San Marcos.
The Linda Vista sales took place in 2006 and 2007, but only fell into foreclosure in recent months. In some cases, McConville made payments for nearly two years in Linda Vista, whereas in last year’s deals in Escondido and San Marcos, buyers of the units said he made no more than three payments.
But the prices on the Linda Vista units were elevated even two or three years ago. The U-T quotes appraiser Todd Lackner, who has also tracked the deals in Escondido and San Marcos:
For example, a one-bedroom, one-bath unit sold in fall 2007 for $305,000. About the same time, a larger unit down the street on Linda Vista Road sold for $139,000.
“Especially in late 2007, well after the subprime meltdown, these lenders should have known a 554-square-foot unit in Linda Vista was not worth $305,000,” said Todd Lackner, a San Diego appraiser who has tracked thousands of unusual sales.
One of the buyers in Linda Vista, a North County tax preparer named Cristy Voss, told the U-T she was promised $10,000 for each unit that her identity was used to purchase. She was also told that the title for the condos would soon be transferred out of her name, and the properties would be sold within two years.
Voss said she was paid the $20,000 she was promised, but the title was never transferred and McConville has stopped making the payments on her units.
Vazgen Davoudi told the paper his identity and credit score was used to buy five condos in Linda Vista and that the payments had been made until last year. Now, he said, those loans are in default. From the story:
Each of the condos in his name were purchased in the $300,000 range, and nearly all of the sales closed in December 2006.
Davoudi said he recalled being paid a fee of about $4,000 per unit.
You might recognize, as I did, that buyer’s last name. Vazgen Davoudi is the father of Raymond Davoudi, a former McConville employee.
We mentioned in Part I of our investigation that some former members of McConville’s team — including Raymond Davoudi — had recruited members of their own families to serve as buyers, seeing nothing improper in the way McConville had been purchasing properties. That was before they started falling into default.
Here’s more from our investigation into McConville’s operation.