All Forum Posts by: Bo Wagner

Just read an article on a Crowdfunder trying to fund flips; curious if anyone had heard of this (and if it's a good option).  Not trying to invest personally right now but a lot of investors who close with us ask about lenders from time to time...  Thoughts?

Article link HERE

Rick, as I'm only licensed in GA and KY (and really only practice here in GA) that would be out of my scope, and would likely run up against 'UPL' for other states (Unauthorized Practice of Law) so I guess I'll keep my postings general or relating to GA.  With that being said, the types of deeds should be quite similar if not identical in most states; just depends on local practices as well.  

And Carol is always right!!!

Glad to hear it!  Those letters are REALLY well written (e.g. OH MY GOSH, you BETTER send us money NOW or your TITLE can be threatened!!!! ; )  

In real estate, you hear the word ‘deed’ a lot but sometimes it’s not clear what is being referenced. A deed conveys or transfers property from one to another, be it an entity or an individual—that is consistent for all deeds. The key is what this deed actually SAYS. Sometimes the title of the deed is clear (like “Warranty Deed” at the top of the instrument), but that could be meaningless if the internal wording is incorrect or less than an absolute warranty of title. Let’s explain…

The ‘best’ deed is a Warranty Deed. If I transfer a property to you with that, I am warranting that I own it and can freely transfer it to you. I also give you a ‘warranty’ that I will help defend that clear title (thank goodness for Owner’s Title policies!). The ‘worst’ deed is a “Quit-Claim” deed (no it is NOT a quick-claim or quick deed!). The Quitclaim deed transfers ‘whatever I own’ to you. If I am the full owner of the property, great! That means you own whatever I ‘gave’ you. What if I don’t own it? Well, if I EVER take ownership of that property down the road, then that deed more or less finally kicks in (as an example, I can deed you the Golden Gate Bridge, but you didn’t get anything because I don’t currently own that beautiful piece of living history. BUT if I ever do (somehow) own it, guess what? At that point it’s yours!)

Interested in buying a foreclosed property? A Bank takes title to the property through a “Deed Under Power”, meaning they used their power of sale embedded in the Security Deed to ‘take back’ the property when the owner defaults. (A Security Deed transfers an ownership interest to the Bank in order to Secure their interest in the property—an analogy is a car title where you and the Bank own the secured item together). Now that the Bank owns the property, they will sell it to you using a “Limited Warranty Deed” (sometimes called a “Special Warranty Deed”). There is specific language in that deed noting that they warrant and guaranty the title to the property ONLY through their time of ownership ‘forward’ in time (in other words, “we only promise to defend any claims that showed up AFTER we obtained this property).

Next time I will talk about “issues” with deeds. When I am cleaning up titles, I find a lot of unintended consequences (incorrect names, incorrect descriptions, incorrect format, etc.). One thing I will say is that you are risking a lot when you use a deed you found on the internet or some cheap office-supply form. Isn’t the ownership of your home worth the $50-150 an attorney would charge to prepare that instrument? You will hopefully decide YES once you see the next newsletter…!

As a side note, here in the Metro Atlanta, Georgia area, I have received various “official” notices in the mail with a very strong call to action. This call to action virtually screams that I MUST contact them and get a copy of my property deed TODAY (oh, and send them $55-85 for this important service). Here’s the deal—if you have signed any deed of conveyance, the attorney who handled this should have mailed you the original. Can’t find it? No problem! The cost here in Georgia?  Go to your county Clerk of Superior Court (property records division) and get a copy… for FIFTY CENTS. Yep, those ‘official’ notices are a scam—legal, but still an absolute scam. Be safe out there! 

@Eleena D and @Ken Bryant ; I cannot speak to any of the programs that are offered by Finger Lakes Funding but I can tell you that I have closed at least 3 deals for a client who has used funds provided by Finger Lakes Funding.  She had a letter issued by them noting that there were indeed funds available for the purchase.  The "A to B" Funds were wired in a timely fashion and as the closing attorney involved, I received clear instructions as to how to return the funds from the "B to C" portion as well.  

Again, there may be 'better' or 'cheaper' out there--I am just telling you that the process for the closing itself worked from my perspective.  

I checked with my title insurance provider (Old Republic Title) over a year ago when an investor client was about to be stuck receiving a quit-claim from an institutional seller and ORTC didn't have a problem issuing owner's title merely because you receive a QCD through closing. We always pull a full 50 year search and will sort out any issues prior to closing and the issuance of a title policy or else we don't close.

For what it's worth, moving forward, you can sell off using a Limited Warranty Deed (like REO banks typically do) which limits your exposure back to the date when you actually received title, but not further.

And as also noted, you can definitely use the same title company to re-insure if a problem does surface as effectively they are already 'on the hook' for that issue.

(FWIW, thank God no one is using "quick-claim" or "quick deed" on the forums, but of course BP users are much more intelligent ; )

J, good to read about your 'new life' in MD. As I sit at home (vs. sitting on I-75) reading about your new adventures watching the sleet and snow fall outside (love that term "wintry mix") I can look back and think about all the flip deals we worked on here in ATL. Every time I drive past the "Probate House" it makes me smile!

It was interesting to see all the different attorney and state fees on the HUD; thanks for sharing as it's always interesting to see how much (or how little) things cost in other markets. I think we have a good value here in GA! I remember seeing a NY HUD (for around 200K; circa 2003) and the attorney/state fees alone were around $20K!

Relative to value, I also think about your standard level of finish in the GA flips (which was always high quality) and am curious how the transition will be for the 'lower-quality' materials used for the rental market up there. I know that there will be a much different risk/reward factor, but I can't wait to see how it all plays out; I think that using better quality will mean you have less wear and tear but again, I appreciate all the other LL comments and we'll see how things hold up.

Finally, decades ago my Mom argued with my late father why he wanted to build some "silly duplexes" back in the 60's. Thankfully he did, as those rentals still pay her bills and kept the family afloat during the Jimmy Carter era when we had too many houses sitting (Dad was a small builder).

Once things shape up here for us in the next few years, I hope to find some lower cost buy/hold properties for us here in the future (vs. my old house, which is too expensive to be a 'real' rental; it should sell this Summer). I'm sure I'll learn a lot from all of this (and the other BP commentary). GOOD LUCK!

I agree that GA is quite friendly. Process is pretty clear and simple to do BUT expect that some people will delay the eviction process so that they have more time to move out. I don't handle eviction cases but have a decent working knowledge of the system. As with anything, choose your tenants wisely, have EVERYTHING in writing and communicate clearly. Even though I don't litigate, my advice is this--if you show up in court with the best documentation and clearest 'story', you will most likely be the winner (maybe not with a jury but again, in Magistrate/Small Claims this should make sense, but your mileage may vary).

Yes, I definitely should 'tune in' more often ; ) Good luck with permits; are you going to do any postings on that project?

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