All Forum Posts by: Brian T. Grooms

@Jeremy Climie

I own a condo that use to be non-warrantable (is now warrantable again,  and the property hasnt changed one bit) in AZ and am looking at a foreclosed one in another complex.

The thing about warrantability is it can change and can be somewhat arbitrary.

For example, here if more than 60% of the units in a complex are not owner occupied then every unit is deemed "unwarrantable". Also if one person/entity owns more than 1 unit in the same complex it can also make the units "unwarrantable". This is because of the voting power in the HOA and the HOA has considerable power over the overall property.

As time passes and units are bought, sold, and or rented the percentage of non-owner occupieds can change and that can change whether the same property is warrantable or not. It is somewhat arbitrary because at the border line one more condo rented can swing the entire complex into unwarrantable status (and vice versa). I guess the line has to be drawn somewhere...

I have talked to mortgage brokers that offer options, so it is not impossible to find financing but as others have mentioned the terms on the loans may not be as favorable.

Makes sense what you are saying about a tenant's perspective. 

Definitley will try to work with them to avoid more money spent on legal fees and time wasted. But I figure best to get the ball rolling by serving an official notice when having a conversation. In case they happen to be like the 2 of the 30 you talked about.. ..

I was the high bidder at a recent AZ trustee sale.

The trustee's deed will be filed 7 days from now.

The property is occupied. Records show it is owner occupied but who knows there could be a tenant there...

I hope to have a cash for keys deal done but want to get started on judicial evictions ASAP in case it doesn't work out. I plan to speak to an attorney ASAP also.

Would be great to hear from those experienced with foreclosure evictions in AZ. Any words of advice  or example scenarios you have been through?

@Jonathan Kim On the building in upper Darby, what is the ball park amount of rent per unit in that area?

@Joel Owens Are you that saying many buyers actually like 82 to 85% occupancy because of the room for value add by increasing the occupancy? You mean that with 82 to 85 % occupancy the NOIs (actuals) are keeping the valuation lower for the buyer? This would make sense to me, but seems like it would not be benefiting the owner (I also realize poor quality tenants at higher occupancy is definitely not good for the owner either though). 

Also, why would the lender underwrite for 7% vacancy with actuals at 82 to 85%. Do many lenders you work with underwrite based on the market as a whole rather than actuals for a specific property?

I am a new commercial realtor, I come across your posts often, thanks for sharing your knowledge and experience with the BP community!

I am re-posting my scenario below from another post, a lot of it is relevant to this thread. I have made note of the comments referencing using a lawyer to handle much of this but am still hoping to get answers to some my questions below.

I have been preparing for an upcoming Trustee Sale in AZ. This will be my first. I have researched extensively. I really want to become an expert at avoiding the pitfalls of trustee sales.

Please, those experienced with Trustee sales, provide comments to some of the following. It would greatly appreciated!

I am still not clear if it is possible to get title insurance immediately on the title purchased at the Trustee Sale. Is this possible? Should the issuer of the Trustee Sale Guarantee (TSG) offer title insurance since they issued a TSG in the first place? Should I be as concerned as I am about possibly not obtaining Title insurance (for at least 120 days, explained below).

Does the (TSG) protect against cloud on title? (Otherwise what is the purpose of the TSG?)

I sent the trustee a check to get the TSG from them directly. I am still waiting to get this back. It is Thursday evening, auction is Monday, they should have the check tomorrow and will email the TSG tomorrow. If I dont have it by Monday, is that a big problem?

I had a title company send me a "listing kit" that along with it comes all of the recorded documents associated with the property. I went through all of the documents and have a good understanding of the chain of title from this. I have also now figured out how to pull all of the records myself.

I have also paid the same title company for "Condition of Title Report" to get their official opinion (quasi official anyway).

The title company has told me that they cannot pick up IRS liens and if their is one it will be unknown. This sounds incorrect to me. If there was an IRS lien on this property would it not show up in the county records as they say?

The title company also told me they cannot issue title insurance for 120 days because of the IRS 120 day right of redemption period if there is in fact an IRS lien.

I will contact other title companies tomorrow also to see what they say...

However, as I have been learning, It seems like it would make since to always get a TSG and get title insurance from the issuer of the TSG if it is possible. Otherwise I just dont understand what the point of a TSG is if is not a real guarantee that the title is clear or that you can at least get insurance with the guarantee.

Is the TSG basically the same thing as the "condition of title report" i received from this other title co. except from the Trustee's title co.?

Any comments relevant to the above are greatly appreciated!

As a new commercial realtor, beginning to focus on multi family/apartments. I have gone the route of getting an owner list from a title company of properties with 20+ units. 

Then I had to figure out who actually owns these as many or most will be held in entities. I hired a VA to search and find who is behind the entities ,and to get as much contact info on them as possible. My VA mostly did a good job (but I have had to dig further on many of these properties when I start trying to call them though). The next step started start calling the owners and building my own database of these properties while trying to get more info about the properties.... I also got another title company to do a search of closed properties of 20+ units to attempt to get some closed comps... From this we had to dig deeper, also pulling Affidavits of Value (AOVs) to see the # units (if anyone bothered to fill out the AOV fully, often they dont) and sale price. It has been slow going for me but no one really specializes in this niche in my area so I will keep at it... I am glad I am in commercial but there are times I think this would be a lot easier if I was doing residential and invested into automated lead generation system........

I have been preparing for an upcoming Trustee Sale in AZ. This will be my first. I have researched extensively. I really want to become an expert at avoiding the pitfalls of trustee sales.

Please, those experienced with Trustee sales, provide comments to some of the following. It would greatly appreciated!

I am still not clear if it is possible to get title insurance immediately on the title purchased at the Trustee Sale. Is this possible? Should the issuer of the Trustee Sale Guarantee (TSG) offer title insurance since they issued a TSG in the first place? Should I be as concerned as I am about possibly not obtaining Title insurance (for at least 120 days, explained below).

Does the (TSG) protect against cloud on title?  (Otherwise what is the purpose of the TSG?) 

I sent the trustee a check to get the TSG from them directly. I am still waiting to get this back.  It is Thursday evening, auction is Monday, they should have the check tomorrow and will email the TSG tomorrow. If I dont have it by Monday, is that a big problem?

I had a title company send me a "listing kit" that along with it comes all of the recorded documents associated with the property. I went through all of the documents and have a good understanding of the chain of title from this. I have also now figured out how to pull all of the records myself.

I have also paid the same title company for  "Condition of Title Report" to get their official opinion (quasi official anyway).

The title company has told me that they cannot pick up IRS liens and if their is one it will be unknown. This sounds incorrect to me.  If there was an IRS lien on this property would it not show up in the county records as they say?

The title company also told me they cannot issue title insurance for 120 days because of the IRS 120 day right of redemption period if there is in fact an IRS lien.

I will contact other title companies tomorrow also to see what they say...

However,  as I have been learning, It seems like it would make since to always get a TSG and get title insurance from the issuer of the TSG if it is possible. Otherwise I just dont understand what the point of a TSG is if is not a real guarantee that the title is clear or that you can at least get insurance with the guarantee.

Is the TSG basically the same thing as the "condition of title report" i received from this other title co. except from the Trustee's title co.?

Any comments relevant to the above are greatly appreciated!

I am a commercial agent in Northern AZ with DaVinci Realty out of Flagstaff. I personally am based out of Sedona but am in Flag often and am familiar with the Verde Valley market. 

There are OK CAP rates up here, but just not with small MFs or standard SFRs with long term renters. In Sedona/Flagstaff the market rate of return for most commercial properties is roughly 8-9%. There are opportunities available for good cap rates with hospitality/industrial/ and some office buildings in our area though.

Standard long term rentals in MFs and SFRs just do not generally cash flow around here (Flagstaff/Sedona especially) because acquisitions costs are so high relative to market rental rates. Although there is massive demand for long term rentals and rental rates are increasing, it is still extremely difficult/impossible to get cash flows like you can in other areas of the country.

I am a new agent focussing on commercial/investment real estate in an area dominated by tourism and the hospitality industry. I want to compile a list of residential and hospitality developers active in my state (AZ), and neighboring states. Other than scouring google, what publications and available resources are out there for me to find out more on key players that might be interested in my area? Any tips on where to look, publications, associations, etc that would be relevant?

As usual the BP community's insights will be greatly appreciated!