Question on Wholesaling Preforclosure Probate

29 Replies

SO i received a call from a seller from my letters that needs her property out of her hands by Aug 10th. is that too little time to make a wholesale deal work? Her asking price is a little too high in my opinion for this to work in 6 days. what are some motivations for her to hand it off to me at a deeper discount? or would this even work at all.. 

ARV 360k

Repairs 2-5k house looks pretty decent already possibly why they were trying to sell it through an agent too high for so long. 

She is ask $337k 

what shall my maximum offer be? or is this even worth it?

Actuslly, you don't even know if she can sell the property now until you see her probate Letters and check for powers.

She'd have to have obtained Full Authority and be the sole heir to avoid the 15 calendar day NoPA requirements.

Then, you've got the issue of a short escrow. Is it long enough to get reinstatement, satisfy title, record and close? Even if you don't use an outside escrow as I operate many times, the timeline will be tough. She may be living better thru chemistry, which would explain a lot.

You can offer anything you like, however if you use seller carry back financing to pay seller for balance of equity due over sub-2 loan balance, you structure to make your profit later.

Rick Harmon I have confirmed and looked at the file and does have full authority. I am new to the strategy of seller financing. And really unsure of where to go as in process such as contracts etc.. Let's say I do get her to let's say 295k, is five more days doable?. But if seller financing is an option how do i present that as in terms?
Even if she has powers see if the house is in or on the Lis pendens index. Doesn't matter if she can sell the property to you if it can't clear this index- your title will defective.

@Raden Mantuano

I would rethink your position.  Based on your questions above, you're far too new to investing to take this on by yourself and this is how new investors lose their backsides in a "potential" deal. 

You would be wise to partner with a seasoned investor in your market who can help you stay out of quicksand and make sure you walk if and when that time comes.  

I appreciate it very much guys I have teamed up with my mentor this deal is possible but it can be pretty confusing 

This post has been removed.

@Derrick Ogert Forgive me, but you are mistaken. I could give you eleven (11)  points, but I'll just publicly offer one:

California is a non-judicial foreclosure state. Judicial Foreclosures, hence LP's are rare as they relate to foreclosure of Deeds of Trusts securing loans.

I've completed hundreds (literally) of transactions involving probate real estate in foreclosure in California.  This is one of my specialities. 

I know only a small handful of people who have the skill to work such a deal. 

It's not that tough if you have your systems in place already but a big undertaking if not and very stressful. I've watch escrows screw these up. My escrow company is part the one of the largest foreclosure companies in the U.S. So they have all the back line contacts. 

If it were me, I'd negotiate differently and deal with the seller from a position if experience. Of course, I write the annual article on probate Foreclosures for the state Bar to read. 

Rick Harmon- Normally I would let this go but this is too big of an issue and I believe you are wrong. Although you said forgive me, Your response to my little post is inaccurate and I believe you are not really giving the original posting member a qualified answer in your response to my post to Raden. Even In your post you stated "Then, you've got the issue of a short escrow. Is it long enough to get reinstatement, satisfy title, record and close"? One of the many reasons she would need to be reinstated is to remove the property from the Lis Pendens index to satisfy title. Reinstatement is because the Lender has to remove the property and give her all of her Legal and Equitable rights (Bundle of Rights) back to her so she could sell it.

Talk to any Real Estate Attorney in any State, and as you are well versed, there are two things when you close- The actually closing and titling. Whether titling is being done through Title Insurance or through Title Guarantee accompanied by Abstracting- Either way, the Attorney or company doing the insurance/guarantee will not give "CLEAR" title if the property is on Lis Pendens. In Any State regardless of Judicial or Non-Judicial status, The Lender has to  issue a "Letter of Default" to begin the "Foreclosure" process in any type of ownership or deed structure. (Which was my whole posting point NOT that you couldn't buy the property- anyone can buy but who would want to if you can't have clear title?). When the Lender sends the letter of Default; they send at minimum, two copies. One to the owner, one to the County/City Clerk of Courts or Recorders office to be recorded. Once That is recorded, Property is immediately listed on Lis Pendens. Lis Pendens is latin for Litigation or Action Pending. Unless the Lender or a Judge removes the property off this index, Title has a cloud on it. Lis Pendens is to protect the Lender's interest in acquiring the property without further liens or judgements being attached.

I know you have many properties under your belt and you are a PRO member and I respect that. Unfortunately, I strongly believe you are missing the key element here regarding my post. IT is not about the buying process nor about how to get a seller to sell, IT was about Title- After all that is why Raden was buying the property instead of Wholesaling it- To Take Title. I am very personally attached to that answer as it has cost me, as Guy Giminez put it "my Backside". I spent over 18 months and over $100k fighting a lis pendens issue on a $375k property. Even with me hiring 4 very prevalent RE Attorney's to individually deal with the Lender, The Courts, Myself, and the previous home owner, I still had to go through the process to clear it off Lis Pendens and that was not to even to go through the Court System and hearings!

So in closing- Next time I would appreciate it if you Do not Call a fellow poster out in a post unless you know for 100% fact that the poster's response is Completely Bogus! As you can see in my CASE backed by even your response listed above, It was not Bogus and my Post was not wrong.

Regards- Derrick

I did not say your post was bogus. It was merely misguided. There are many ways to work deals. My point was that  we do not file a Lis Pendens in CA in order to foreclosure non-judicially. 

Also, It's quite possible to to obtain title insurance on a property in default on a note secured by trust deed. @Raden Mantuano would need to decide if leaving the existing loan in place and merely curing by paying arrearages is acceptable. This could therefore be a probate in foreclosure sub-2 with seller carry back deal. 

I've done this same transaction many, many times. In California. 

@Derrick Ogert I'm not here to argue with you. I tried to show you respect and then I cited the facts and the law in my home state using my experience in Foreclosures since 1978 and my decades and hundreds of similar deals. 

Let the the original poster do his own homework, draw his own conclusions, make his own decisions and use his own money. 

@Rick Harmon - I too am not here to argue. BUT you did say I was "Mistaken" which is in general terms stating that I was "Wrong" and that is what I posted back to you.

Originallly @Raden Mantuano did not state anything regarding Seller Financing (initial Post). He purely mentioned he had a deal. At any rate- Any type of Foreclosure regardless of Non Judicial or Judicial, Has the High Chance of being listed on LP index in your's or anyone else's State. It is the instrument to "Protect one's Perceived Interest" in the property. The entity or person does not even need Legal or Equitable proof of ownership to put a property on this index.

My statement was simple- "Make sure it is not on Lis Pendens index" Period. It had nothing to do with seller financing or Arrears but purely to obtain clear title. I would really hate to have seen  lock the deal up HOPING to Wholesales it out then get slammed with "No Clear Title". 

From your statement "It is quite possible to obtain Title insurance on a property in default" Well Yes- Anyone can get an attorney to give a Title Insurance Policy BUT in that policy it will state "Subject to" a.k.a. Policy contingent upon removal or dismissal of the default.

I can show you 100's if not 1000's of Records in CA in any County or City that are attached to the LP index. After all how do we know or find out that a property is in Pre Foreclosure? By a Default Document mandatory recordation due to the guidelines of Federal Oversight S.A.F.E. program and the H.O.P.E. Initiative. 

I appreciate your Willingness to Help others as that is a big thing on BP. Please in the future - Do not call someone else out on their post Unless you know for 100% fact that it is wrong or misleading (instant message them instead). I would think BP Admin would agree that my post was straight to the point, contained to one subject item, and is Valid and Good Business practice to make sure a property is not on Lis Pendens before engaging in seller financing or Lender Financing  deal. Especially if you are trying to Wholesale the deal out which is what @Raden Mantuano initial post stated "Wholesale" which meant he was not going to take initial title but was going to sell the property out. Any investor or Cash Buyer will want to know if it has a clean title- As I would imagine you would want as well and agree if you were buying it from a Wholesaler?

Derrick, not sure how they do it there....but, here there is no such thing as an "LP Index".  An LP also is Not an impediment to clear title, if you are simply buying it, paying off the under lying debt, a non issue.

As far as I know, there wouldn't be any LP filed in a non judicial foreclosure, since there is no pending law suit.

Originally posted by @Derrick Ogert :

@Rick Harmon - I too am not here to argue. BUT you did say I was "Mistaken" which is in general terms stating that I was "Wrong" and that is what I posted back to you.

Originallly @Raden Mantuano did not state anything regarding Seller Financing (initial Post). He purely mentioned he had a deal. At any rate- Any type of Foreclosure regardless of Non Judicial or Judicial, Has the High Chance of being listed on LP index in your's or anyone else's State. It is the instrument to "Protect one's Perceived Interest" in the property. The entity or person does not even need Legal or Equitable proof of ownership to put a property on this index.

My statement was simple- "Make sure it is not on Lis Pendens index" Period. It had nothing to do with seller financing or Arrears but purely to obtain clear title. I would really hate to have seen  lock the deal up HOPING to Wholesales it out then get slammed with "No Clear Title". 

From your statement "It is quite possible to obtain Title insurance on a property in default" Well Yes- Anyone can get an attorney to give a Title Insurance Policy BUT in that policy it will state "Subject to" a.k.a. Policy contingent upon removal or dismissal of the default.

I can show you 100's if not 1000's of Records in CA in any County or City that are attached to the LP index. After all how do we know or find out that a property is in Pre Foreclosure? By a Default Document mandatory recordation due to the guidelines of Federal Oversight S.A.F.E. program and the H.O.P.E. Initiative. 

I appreciate your Willingness to Help others as that is a big thing on BP. Please in the future - Do not call someone else out on their post Unless you know for 100% fact that it is wrong or misleading (instant message them instead). I would think BP Admin would agree that my post was straight to the point, contained to one subject item, and is Valid and Good Business practice to make sure a property is not on Lis Pendens before engaging in seller financing or Lender Financing  deal. Especially if you are trying to Wholesale the deal out which is what @Raden Mantuano initial post stated "Wholesale" which meant he was not going to take initial title but was going to sell the property out. Any investor or Cash Buyer will want to know if it has a clean title- As I would imagine you would want as well and agree if you were buying it from a Wholesaler?

Uh no.  CA is non-judicial for all but a tiny percentage of foreclosures.  Lis pendens in CA are not common.  Notice of Default, a recorded document (no court) is how we find out property is in foreclosure.  There is no court activity of any kind for most foreclosures here. Lis pendens get recorded when the lender is planning to go the judicial route.  Or when they want to cloud title with notice of a legal action.  

You seem very insistent on something you don't seem to understand or have the facts on.  What's going on with that?  

Originally posted by @Wayne Brooks :

Derrick, not sure how they do it there....but, here there is no such thing as an "LP Index".  An LP also is Not an impediment to clear title, if you are simply buying it, paying off the under lying debt, a non issue.

As far as I know, there wouldn't be any LP filed in a non judicial foreclosure, since there is no pending law suit.

Not only that, title here doesn't check the courts (civil or federal BK) at all.  If it's not recorded, it's not against title.

And now back to our regularly scheduled programming.  Pre Foreclosure and Probate Deal with Time Constraints.  @Raden Mantuano  So what's going with the Admin trying to sell by the 10th? Is the trustee's sale scheduled for the 10th?  Is there a pending tax sale?  Why the 10th?

We are missing numbers.  What is owed on the loan?  Buying this property with cash or seller financing could be a moot point if the loan is over encumbering and/or is a reverse mortgage. Or if there are other debts. More details on the loan and debt issues and we can better brainstorm on it.  

Seems what we have here is another local expert assuming all states are the same.

Derrick, IA is a "lien state" you will have a NLP.

CA and MO along with 23 other states are "title states" non-judicial, where title is vested with the lender and the owner retains the "bundle of sticks" of owners rights. 

2 copies of a Notice of Default are not a requirement everywhere, one is always required to be delivered to a borrower. 

In fact, in title states, there is no court filing, non-judicial foreclosure begins by the notice of foreclosure, publication, filing of the notice to foreclose. No LP to clear, the lender is already in title. 

What you experience in IA is unique to IA or perhaps other lien states, it is not in title states, so your assumptions are incorrect. Hang in there, you'll find too that CA is another world located on the West coast of this country.

K. Marie, Wayne and Rick are correct. Brian has a very good point as well.

I had a relative who was Dutch from IA, she just had to be right about everything, she even told me that a school I attended was never the name of that school when I went there! Loved her, but I sure try not to be like her. Good Luck :)     

Kristine, Wayne, Brian Gibbons

Thanks so much for all your nice helpful Comments... Since you are not instant messaging me and you are posting in this forum- I will reply the same.

This was a reply back to a gentleman (Rick) who called me out as being "Wrong" when posting to another members question. So I do not know why any of you are even posting anything since your comments are really directed to the Initial posters Question and my response was not directed to any of you besides Rick.

Keep in mind- Initially,  Raden's Post was "Probate Foreclosure Wholesale" He had a short time to convert the deal, Seller financing or seller held was not part of the initial post... HOWEVER, it looked as if he made a updated post moments before my post, stating the seller financing option.... I was already into posting by that time. However- It still would not have made a difference in my post. Also even though Raden is in CA that does not dictate where his property is located- He did not disclose where it was located....everyone else is making a blanket assumption it is in CA- No one knew. Just food for thought!

Once Again- I want to make this clear. My Initial post was "Check to make sure it is not listed on LP index or you could have a defective title"..... First- How can that be "Wrong"? It was advice for Raden to check. How can that statement of advice in any situation or definition be "Wrong"? Everyone posting agrees that LP exists regardless if it is or is not prominently used in their State? But it does exist! 

Wayne- I bought numerous of properties in Florida and still do. I have personally ran into at least 15+ deals in past 10 years (1 in last 6 months) that have had LP indexed issues- Titling issues. "Index" is what the Recorders call it when a title search comes in. That is how "they" refer to it. Buying the underlying mortgage does not resolve or dissolve the LP in its true sense if one is in place.  If your True meaning of your post (comment) is that it does not really hold up anything- then you could be correct if you have the proper releases and satisfactions which most Title Companies or attorney's worth their salt, handle ahead of time prior to the closing- which normally take a little longer to close (more than 6 days from start hence my post to Raden). My Post was what I said above... Primarily- Raden had a SHORT time frame to cover the deal- I want to say less than 6 days- If he was wholesaling the deal (which he said he was), it would be good that he checked to see if it was on LP index? I would like to know from you, Wayne, How you think LP is not a impediment to clear title if it's present? Any TI company will make the requirement for it to be released or satisfied if it is present?

Kristine- as I am sure you know, LP is an actual index e.g. legal, civil, and admin. It is used not only for Judicial or Non Judicial foreclosures. Matter of fact- Lis Pendens can even be used without anything dealing with Foreclosures. It does not have to "give birth" under a Lawsuit and it can be a Recorded, Documented, Disagreement of ownership. Most people confuse the term with "Pending Litigation" (Not the true definition) and you don't have to have litigation as a trigger. Its that simple, and that can and will cause, transfer issues unless released properly (foreclosure, Probate, Estate, Properties of State, Divorces, Abandoned Properties, ED, Deed in lieu's, etc...  And Yes- CA DOES check Recorded Documents involving a property or at minimum the current owner when issuing Title Insurance Policies (Seller Search).. No Company is going to issue a Policy and be on the hook for it and Not check the local or even in some instances National records. If you say that is not how it is done in CA then you are seriously misleading people. Once again, Kristine, you missed the part of me stating "Recorded" and even in your post you even confirmed by your own statement "title here doesn't check the courts (civil or federal BK) at all. If it's not recorded, it's not against title".

Brian- Thanks for your unique post. I never disputed Ricks rep. I disputed how and why he called me and my post out as being "Wrong". I did not state he called me "Bogus" and for you to say it was high schoolish- I'm disappointed in your statement as it appears you are trying to Hold yourself up on a pedestal. You accuse me of being Closed Minded and Defensive? How would you feel if I responded to your post and told you were Wrong instead of Instant Messaging you directly- When in fact you weren't wrong? And for you to suggest "Listen Politely"- Relay that to your buddy Rick- this is how it all started.  He called me out (not listen politely) and I responded. I'm sorry if your sensibilities have been offended. Obviously my post was not directed to you or made any mention of you- but obviously somehow you inputed your self? Rick called me out so I am backing my post. Even Rick would not disagree, as I am sure most investors would not, yourself included,  that if you had less than 6 days to close a deal, not doing any title search, and you were wholesaling the deal out, Why would you not pull the recorded docs yourself and check for lis pendens or other recorded issues to be prepared?  If someone posted "get a signed contract" in the post- Would you have called it out as "wrong"? NO- its the Same thing? As far as getting points from you or votes or that you post a lot- that does not deter me standing up for my post instead of being bull dozed by people like you. Sorry - the Threat of not getting your support does not bother me. If you don't like it don't involve yourself.  Im sorry if you feel like I was attacking your Friend.. Not the intent...I'm sure Rick is awesome at what he does and he is a grown man. Calling someone out and blatantly telling someone they are wrong in "Public"  when they are not, is an attack on ones integrity. I for one do not stand for it especially when people jump on a band wagon and start criticizing when they all have just agreed What I said does in fact exist.

People- it is simple. I am not being rude or offensive. I greatly value and love listening to other people, their stories, their triumphs, their mistakes- all of it. The post I posted was for Raden and Raden alone. Unfortunately, Rick called me out in public as being wrong. If you have the gumption to call someone out in public then respect the fact when that person defends their comment. It was a valid point considering Raden's Quick time frame to lock the deal up. I don't know if he was doing title search on the property prior to selling it out since his thing was to initially wholesale the deal (not take title)- SO Why Wouldn't he check the records before he tried to sell it out to a Cash End Buyer? 

In Closing- I appreciate the tenacity from everyone. It shows that you are in fact listening to the posts that are going on in BP. What concerns me the most out of this- is that neither one of you (besides Rick) posted anything to help Raden (the initial post member).... But all of you in turn jump on a person who offered a 1 sentence of advice which is relevant and does exist in Real Estate, but then make it out that I am the one who did something wrong? My friends, If you feel that this post is anyway a violation of BP posting guideline then report it. I am sure BP admin would look at the thread and see that I stood up for my 1 sentence advice and that particularly I was called out as being wrong. So in closing- Thank you all for your candid posts. And For Raden- Sorry your post got hijacked by other Non Initial Post commentators. Was not the intent. Cheers~

  I was going to say something about mom and dad fightin but I'm learning so much. Soooo keep at it. 

@Raden Mantuano Private message me with the name of the foreclosure trustee and also the probate attorney. I know them all and happy to provide any insight I can. 

Not enough meat on that bone to interest me and I'm fine with that as long as you don't ask me to do your work.

@Derrick Ogert i'm afraid you won't last long on here if you got your panties in a bunch over that correction. I've been slammed way harder for much less. Take the advice of our elder and wiser, your advice was misguided, you got called out on it. Who cares? Move on. 

@Raden Mantuano I'm curious of their need for the quick sale. Can you elaborate on that?

Derrick, my reference to the LP not be an impediment was based on him buying it outright.  Of course the LP has to be cleared, but so does the mortgage even without any LP filed.   Paying off the mortgage makes both a moot point.

More importantly, @Raden Mantuano , there's no deal here. Buying at those numbers, then immediately reselling at ARV would be a break even, at best.

Originally posted by @Derrick Ogert :

Kristine- as I am sure you know, LP is an actual index e.g. legal, civil, and admin. It is used not only for Judicial or Non Judicial foreclosures. Matter of fact- Lis Pendens can even be used without anything dealing with Foreclosures. It does not have to "give birth" under a Lawsuit and it can be a Recorded, Documented, Disagreement of ownership. Most people confuse the term with "Pending Litigation" (Not the true definition) and you don't have to have litigation as a trigger. 

You might be interested to learn that it is not possible to file or record an LP for any matter in California without initiating litigation.  You must have a opened a court case and paid the court filing fee which is about $450 these days.  A recorded LP must reference the court and case number.  

No need to respond.  You can look it up.  

Originally posted by :

@Raden Mantuano I'm curious of their need for the quick sale. Can you elaborate on that?

Back to focusing on deal making.  Of course the inquiring minds on this thread want to know what's up with the Exec needing to sell by the 10th?  Foreclosure? Court order? Tax sale? Need for cash?  Scheduled incarceration? Without knowing the debt amount, this thread has little redeeming factor.  :(

An update after the OP has a chance to consult with the probate guy would be most gratefully received.  

I did quick check of the property on property radar did not see an NOD or active default or MLS listing. Decedent purchase with 3% down in 2009.

OP did not provide me any useful info as I requested, such as name of probate attorney. As I did not see an active foreclosure, no trustee. 

I think this might be one of those cases where lots of drama stirred up (here) but no real opportunity, just a seller with an expectation that our friend may have gotten excited over before really digging very far into the situation.

Cast, reel in, cast, reel in. Check hook and lure. It's an old boot! Keep fishing. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here