Anybody know a good company for auction title research in Northern CA?

Question

I have been solely a buy and hold investor for the past 8 years, but am now trying my hand at flipping. I have my first flip going right now that was brought to me by a realtor contact, but am currently gearing up to start going to the auctions.

I paid someone to teach me how to go to the assessors office and sift through the docs and reconveyances to determine which note is in first position, but I still would like to work with a professional (title company or otherwise) to do this research for me and tell me that what I am bidding on is in fact a first.

Does anybody have a good referral for this? I am in Northern CA and my first inclination would be that they were in my region but does that even matter? Does anyone provide any forms of insurance if they make a mistake? Based on what I have read here on the forum is does not sound like they do or that that would be dependable but perhaps someone out there knows of a company that might...

Sean OToole · Answer

@Jay Hinrichs collusion is pretty unlikely in the bay area at this point. The FBI and the DOJ really got aggressive there, in fact there were just some more indictments last week (for activity mostly back in 09). Using Pacer is a great tip. Not only useful for seeing what not to bid on, but also for looking for granted motion for reliefs from stay to see what might finally come to sale.

@Mark Vieira  - on collusion the key thing for you to know is that if someone approaches you about working together on a property, just say no. I think your approach to trying everything is probably ok. My guess is that unless you are building a large practice you'll end up leaning towards one or another after a while. I myself like trustee sales, and in the past managed volume / margins by adjusting target properties / markets. I have friends that pretty much only mail, and others that door knock. All successful, but it isn't a get rich quick story for any of them. This business rewards hard work.

Jay Hinrichs · Answer

@Mark Vieira

you will always have the bigger players at the auctions... they are the one's that have been doing it 10 20 years or longer the one's that come and go are the newbies.. And then you have the bigger players that have raised capital and NEED to deploy it as they are paying interest on it.. So they are very stiff competition but they will not stop buying they will just settle for smaller margins... then you have the newbies that will bid things up not realizing that they may not have made a great buy.  It can be very frustrating.. I was one of the top buyers at auction for about 6 years in PDX market.. and just when you thought the lastest wave of newbies was dying off up came the next wave.. The mother with baby in tow and 600k in cashiers checks... LOL.

You can buy title insurance post sale. and pre sale however pre sale is pretty unusual.

As for a last second BK this is very common.. the trustee simply sends your funds back. And its usually a pretty hectic deal you have paid your money show up to the house the owner swears he BK'd your not sure... but this is why anyone doing this should have a Pacer account that will save you bidding on BK's without knowing it.. one thing your funds are tied up and gone for a while so you could miss on tomorrows deals.

In CA this is big boy investing with big dollars so one wants to be pretty careful this is not mid west or deep south buying 20 to 100k TD's ... were if you get fubared its not the end of the world

Then I don't know about N. Bay or BAy area but collusion is a big deal in other parts of the country and very illegal.  Good luck with it.

Be sure to get on all the BK mailing lists so when they pop back up your ready. Also follow the smaller trustee's and lawyers that do small volume sometimes those will fall through the cracks.

Jay Hinrichs · Answer

@Sean OToole

collusion was rampant in the NW  it has since calmed down from what I understand.. I don't know of any busts but I have heard of the FBI stings in many other parts of the country.. IN GA I witnessed cronyism   as well.

The more bidders the less likely the good ole boy network is in place...

Out lying counties could be a good place for someone to start..

One company up here in Oregon built their business in staying out of the major metro counties and concentrating on the rural counties.

Sean OToole · Answer

@Mark Vieira - pm me and I can put you in touch with a title company that will provide non-guaranteed verbal title in exchange for your escrow business. They are used by many of the pros throughout the state, and do hundreds of titles searches for top trustee sale buyers every day.

Getting title insurance is possible, but not really economically viable in most cases. Happy to discuss that with you as well.

David C. · Answer

Have you used propertyradar?  It does a pretty good job on finding & analyzing properties going to trustee sale.  If I need to dig deeper, then I contract my title co to run a lien search for me.  Any title co will do it for you once you have a relationship with them.  I am seeing margin thinning from buying at trustee sale in the bay area, so it might take a while to find a good deal.

I am not aware of any type of insurance as sales are final.  I once bought a property @ auction, but the owner filed BK the same morning.  The bank reverse the sale & return the money to me, but that took about 2 to 3 weeks.

Vince Beusan · Answer

OK David C.    now I understand.

Vince Beusan · Answer

David C.  I wasn't aware that Auction.com was going away in a few months?   There certainly has to be plenty of other online auction companies ready to fill their shoes.

Mark Vieira · Answer

Thanks David C.  will do and that sounds like exactly what I was looking for. I am having a pretty difficult time finding a title company that would do it. The traditional big name ones all said no and even said no one would really do what I was requesting.

David C. · Answer

@Vince Beusan , I meant just the financing at auction, not auction.com itself.

David C. · Answer

@Mark Vieira , when I first started buying at trustee sale three years ago, I went after condos in the lower price range.  The big flippers didn't go after them aggressively compared to SFRs, so I was able to flipped them quick & for good profit.   Now days, they go after everything so margin is not as good.

Also, I got a line of credit from auction.com financing, so they finance me at 70% LTV at auction, too bad this program is going away in few months from what I was told.

For this year, I will try to network with more wholesalers to get deals.

Anybody know a good company for auction title research in Northern CA?

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