Over 80 liens on 5 units!

Rental Property Investor · Kenosha, WI · Member since 2017 · 47 posts · 27 votes

Hey guys!

Recently, my offer was accepted for 5 units in Eastern Milwaukee. We found these deals off market from a seller who is looking to get rid of 150+ units (SFH & Duplexes). We found out that the city is making him sell them because of the way they were managed. Just in the 5 units that we're interested in their are over 80 liens! We hired a title company to fix everything up and they recently got back to me stating the are not able to proceed with this deal. We went to another title company to see if they are able to close, we are waiting to hear back but its not looking promising.

Does anybody have advice on how to proceed with this deal. We really want to close, because we are getting these units at a premium price and well below ARV.

Any advice would be much appericiated. Thanks in advance!

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
depends on what kind of liens they are ?
what is the nature of them.. if there are that many issues I suspect this is C/D class stuff which can be a challenge from out of area investors.. you sure about this ?
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Account Closed
Investor · Havre De Grace, MD · Member since 2017 · 71 posts · 54 votes
8y
Are you on the hook for the liens or the seller?
Maybe try to get a statement for each property (adjusted to closing date) for the liens and have them paid out at settlement? If you do the footwork, the title company might see these as easier to work or you might need to offer to pay the title company more for all of the extra work. This is assuming that this is the reason they wanted out of the deal. Maybe you should be sure that is the real reason -- maybe they have outstanding legal cases with the seller.
If the title fee estimates get a little crazy, maybe you have a close friend that is a title agent or attorney that you can work into the deal in exchange for them arranging settlement.
Just spit balling. Hope this gets your creative mind rolling.
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Cal Rohrman
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Rental Property Investor · Kenosha, WI · Member since 2017 · 47 posts · 27 votes
8y
Originally posted by @Jay Hinrichs:

depends on what kind of liens they are ?
what is the nature of them.. if there are that many issues I suspect this is C/D class stuff which can be a challenge from out of area investors.. you sure about this ?
I'm not sure what kind of liens they are, but I will find that out. Also, I'm paying cash for them so once we fix them up I'll cash out REFI and essentially end up having no money in the deal.
The deal is 3 off marker properties, 4 total units. Accepted offer price of 97,500 and monthly rents of $2,900. It's in a C/D area but we have a property manager in place that currently manages over 60 units in that area.
Once I find out what kind of liens they are I will let you know. Thanks Jay!
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Cal Rohrman
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Rental Property Investor · Kenosha, WI · Member since 2017 · 47 posts · 27 votes
8y
Originally posted by @Account Closed:

Are you on the hook for the liens or the seller?
Maybe try to get a statement for each property (adjusted to closing date) for the liens and have them paid out at settlement? If you do the footwork, the title company might see these as easier to work or you might need to offer to pay the title company more for all of the extra work. This is assuming that this is the reason they wanted out of the deal. Maybe you should be sure that is the real reason -- maybe they have outstanding legal cases with the seller.
If the title fee estimates get a little crazy, maybe you have a close friend that is a title agent or attorney that you can work into the deal in exchange for them arranging settlement.
Just spit balling. Hope this gets your creative mind rolling.
The seller is on the hook for the liens. That's a great idea, I'll ask and see if they can provide that for me. I'm not trying to be stuck with extra costs due to the sellers mishaps in the past. Thanks Joe!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Cal Rohrman:

Originally posted by @Account Closed:
Are you on the hook for the liens or the seller?
Maybe try to get a statement for each property (adjusted to closing date) for the liens and have them paid out at settlement? If you do the footwork, the title company might see these as easier to work or you might need to offer to pay the title company more for all of the extra work. This is assuming that this is the reason they wanted out of the deal. Maybe you should be sure that is the real reason -- maybe they have outstanding legal cases with the seller.
If the title fee estimates get a little crazy, maybe you have a close friend that is a title agent or attorney that you can work into the deal in exchange for them arranging settlement.
Just spit balling. Hope this gets your creative mind rolling.
The seller is on the hook for the liens. That's a great idea, I'll ask and see if they can provide that for me. I'm not trying to be stuck with extra costs due to the sellers mishaps in the past. Thanks Joe!
well part and parcel of most contracts is marketable title .. this title right now is not marketable if they don't have the money or there is not sufficient equity to pay the liens then its a sale fail.
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