All Forum Posts by: John Barrows

Here's a rule of thumb to go by. 

If the mobile or modular is ATTACHED to the property with tie-downs or on blocks with the wheels off, then you are purchasing real estate! That would be a residential purchase and sale agreement.

If the modular or mobile is NOT ATTACHED with tie-down and is simply sitting on the land, I would probably do a purchase of land agreement for the land and a Bill of SALE for the mobile or modular home.

The land can be purchased with a Seller deed of trust outlining the price, terms and conditions of the agreement along with payment terms and place to send the payments. 

The Mobile or modular would be a Bill of Sale, just like a car or vehicle and it too will have a title that will need to be recorded for an XYZ amount..If this is the case then the seller of county will have a copy of the title on the mobile or modular. You'll want to show you've purchased the mobile home for (let's say) $1000 to show gratitude or worth and make that part of the $15K you're putting down. it will show the mobile paid off.

Title is one thing and ESCROW is another. Go through an EXCROW company to close the deal because they will handle everything and get your SELLER DEED of TRUST correct for legal ease. Title will assure you clear and quiet enjoyment of title.

I've sold plenty of commercial property in my 30 years. NOT ONCE, have I allowed any seller to hold EM's from any buyer! That in and of itself is a ludicrous position for everyone! That move is easily a law suit waiting to happen.

1. The seller (for no reason) will hold on to the EM! If so, then you have a fight on your hands! What is your fiduciary duty to your buyer or yourself? You'll serve as your own agent now that you are purchasing the properties?!  ARMS LENGTH TRANSACTION and ALWAYS USE A THIRD PARTY ESCROW! 

2. If you are the buyer or buyers agent, you should already have a PROOF OF DEPOSITS, especially if its yourself or someone you've worked with over the years.

3. Never put more than 3% down on any transaction, especially if it is millions of dollars for the properties. Most generally my rule of thumb is 100k-500K,2% TO 3%, 501K TO 1 MILLION, 1% TO 2% OVER A MILLION PLUS generally 1% with solid Proof of Deposits..

NEVER, put any money in the sellers hands because it can and most generally will become hard to get the seller to release the money! Most generally, the seller feels betrayed by you or the buyer you're representing for pulling out of the deal and will want some sort of reimbursement for having the property off the market. 

Now, if you're going to do a long close like buying land for development, or a huge apartment development you may want to calm the seller by putting up a $5000 non-refundable fee for allowing you to take "MONTHS" to conduct your due diligence with the city, permits departments and the like. That's reasonable and I've done that in the past. 

Wholesaling is in of itself, a different animal when transferring ownership. 

1. You have NEVER TAKEN TITLE to the property. You've merely found a seller desperate enough to believe the BS that is given to them from person's like yourselves.

2. The new person taking over the "option", lease to buy or how ever the contract is written, will have to no responsibility except to close or sell the paperwork from the time of acceptance. Understanding in majority of cases, that no money exchanges hands until closing of escrow happens and title is recorded.

3. During all of this time that you, the wholesaler, the person buying and the principle "seller" are under agreement, THE BANK and it's MORTGAGE AGREEMENT with the seller, WILL, IN ALL CASES supersede and agreement the SELLER & 1st BUYER,WHOLESALER has agreed to.

4. Unless the Financial Institution agrees to allow this transaction to proceed, NO MONEY WILL CHANGE HANDS! I have witnessed all of the above and watched the SELLER & WHOLESALER lose the deal at closing because the BANK REFUSED TO RELEASE THE LIEN! WHY you ask? Because the lien holder believes they can get more money at an auction OR have their (secret hedge fund) buy the house themselves then (WRITE OFF THE COSTS) at the end of the year. YES, they will still own the house through the fund but inevitably, be the benefactor of the purchase.

5. LAST, any wholesaler who has an OPTION, LEASE TO BUY, CONTRACT TO SELL, agreement, only has the right to purchase and does not OWN the property! Remember this folks, you've merely gained a right purchase and not ownership. READ THE OWNERS DEED of TRUST. Banks have the liens, owners have the title, until forfeiture. Unless the property is PAID OFF, the seller will have no recourse and will have to abide to the financial institutions guidelines. 

Because the wholesaler has never lived in the property, never owned the property, never took title to the property, NO taxes, water bill, sewer bill or any other type of bill or disclosure would be entitled by the wholesaler.

I was inquisitive about these so called Credit Score Improvement companies and how they work. So, I looked into them to see what they could do for me. I was astonished at what I found out about how they operate!

1. When signing up to all/any of these companies you have to give out your social security number and your bank account information.These companies want your personal bank account numbers (as they say) in order to see who your paying?

2. They don't provide your credit bureau score nor credit report unless you PAY a monthly fee for the information. Oh yeah, they will give you a score but, it's not your credit bureau reports scores. Once you see these scores you're surprised and want to "help yourself".

3. They will tell you, "HERE's a CREDIT CARD WE RECOMMEND" You have to use one of the numerously over priced, highest interest rate cards they recommend in order to "qualify" for a credit rating or build your credit up. If you go and apply for a card somewhere else or purchase something on-time from another company (they didn't recommend) these companies pick up the information from the reporting bureau's and then these companies will automatically LOWER YOUR SCORES!

4. These companies are NOT ACCURATE with your credit scores! When you call them on the information they're reporting, they will give you a false misleading excuse that (NOT ALL BUREAU's) calculate the same. This is BULL!

5. The credit improvement scoring companies just POP UP without knowing who's running them! DO YOU KNOW who runs these companies? IS YOUR INFORMATION REALLY SAFE? Anyone with a few thousand dollars with CREDIT CARD COMPANY BACKING can start these companies! They then advertise in the media and presto, you're hooked! They can help you (FOR A LARGE FEE)!

6. I have decent/OK scores because I run up my cards, then pay them off prior to the payment date due. Credit Bureau's and these credit scoring companies don't like that because they can't make any interest on the borrowed funds. So, they show their disapproval appreciation by lowering your credit score by 20-40 points.<<<SCAM>>>

7. My credit scores on all three Bureau's run 30-50 points plus over these credit scoring companies. Her's how you can SCAM THEM! Just before the DUE DATE on your credit cards or revolving credit line comes due, pay the amount down to under 30% of what you owe. Don't use the card until the net (reporting date) for the credit card or revolving credit. The date will be on your bill or you'll receive a payment reminder on line (that's the date)!

8. Bottom line to these (FAKE CREDIT SCORING COMPANIES) is, it's just another advertising arm for the CREDIT CARD COMPANIES to manipulate the consumer into believing they are their to help. "They ARE NOT" their to help. They want you to get a credit card through their FUNNELED ADVERTISING SCHEME so they can make a FEE from the credit card companies and yourselves! Again, find the date the companies report your payments and then use this to build your scores yourselves!

9. NOBODY needs to PAY A FEE to see their CREDIT BUREAU REPORT! CREDIT REPORTS are free to the consumer every year! If you want a credit score then buy an item over $100.00 and pay it on time and they HAVE TO SEND YOU a link to see your score or they'll have a credit score available in the paperwork you sign.

10. Credit Improvement Companies were created because they BELIEVE, WE THE PEOPLE are so stupid that we will pay someone else to tell us how to pay for something that is FREE TO YOU! Don't be scammed by the advertising media and the credit card companies folks! Whether it is Credit Improvement Scoring Companies, Credit Card Companies or companies advertising they'll help you pay your bills on time, if they want you to pay a FEE, they are selling information that you can find for yourselves! 

People, when you give these companies your person information, YOU ARE OPEN TO BE SCAMMED by anyone who see's your private information. 

Investigators/police/FBI have proven that the vast majority of CREDIT CARD FRAUD comes from RESTAURANTS, RETAIL OUTLET's, STORES and ON-LINE FRAUD from people willingly giving out their information to SCAM WEB SITES advertising "THEY CAN HELP" scheme's ! It's may not be the companies who are scamming you, it's most likely the employee's they hire that will take your information, copy it, and then give it to a friend or acquaintance for a few dollars! 97% of thefts in AMERICA are people you know, are friends with or that are friends of friends! That is a FACT!

I had a few of these scams happen to me so I put a lock on my accounts that alert me of who's doing what in any of my accounts, immediately. You need to be super careful about how you use your private information. Even Real Estate Escrow companies have run into unsecured money transfer hijacking scams. Guess what, those scams are generally done from within just like ARMORED CAR hold-ups, they are planned from within. So please be aware of who is taking your private information...

One would have to ask, WHAT IS IN THE CONTRACT? You need an address in a contract in order to make payments because not all people have computers, e-mail or these things. Every renter I have done business with has an address to send their payment.

If you check your local renter laws, I believe you can have OPTIONS for the tenants such as (pay on-line, auto pays or PO Box address) for them to pay their rent. DO NOT EVER give tenants your personal address! WHY? Because you could be renting to a whack job that is just about ready to go off about something and especially if they are a problem child or human.

I've had issues like yourself and when the payment is not there on the 5th of the month, I send over the eviction company and they deal with it! I used to do that stuff but, got to dangerous. Look at your local laws and go from there. good luck.

Go to your bank or credit union and they will set up an auto pay with you. The account is set up just like if you had a trading account with a broker. Pretty easy these days. 

I'm moving soon and I will leave all my accounts just the way they are until I set up shop where I will be living. The beauty of the ACH system is, I can run a local account from where I live now and have my other accounts (trading, auto pays, auto deposits etc.) funnel money into my new account and leave enough money in my previous accounts to pay what is needed through my auto pay accounts now. 

You can also set up an escrow account if you don't want to use your other accounts. Most generally, you have a business account(don't co-mingle) your business and personal accounts! 

Whenever adding a structural item to the home, you will need a permit especially if it is a porch, deck or something like that. Simple steps may run under the radar. It has to do with safety more then anything else. 

If you do decide to go a head without a permit on anything you do, watch out for neighbors that may report you to the local building department or worse, have an inspector drive by and see what you're doing. They can and will red flag you and may even issue citations for no permits. If a citation happens then you have to deal with the courts, (TIME & MONEY) spent on having your project held up and last, having to get the project designed, permitted and possible managed by a general contractor "depending on the structure".

Just be aware of your city, state & county codes before undertaking tasks that can be very costly.

Be careful with Auction.com when purchasing a property. You should always go to the courthouse stairs or where ever the place is that is having the foreclosure sale. That way you get your property (today), the paperwork and all documents needed to record the deed! If you go on-line, you will be subject to the "run-a-round" that you just received.

Here's an example of a purchase on-line. My real estate friend and co-worker did basically the same as what you did, bought on line. They were excited, jumping for joy they got this property. Well, after three months of playing around with Auction.com they find out that a developer (adjoining property) built a home and upon building the home, hooked up to the water and sewer. The property they now owned had an easement to the water and sewer through the adjacent property that the builder was building on. Guess what happened? YUP, because the property that was issued a building permit by the city built over the easement and the purchased property would now have NO EASEMENT to get to the resources to make the property (bought through Auction.com on-line) habitable!

Now with all of that said, having myself, the co-workers going to the city, water & sewer districts to argue the case, was eventually resolved by a court case that lasted two years and eventually my co-workers lost their case against the builder. They then had to either tear down the property or take off a garage that the sewer line was under in order to hook up to the cities utilities. Yes, my co-workers lost their butts on an on-line purchase deal.... Buyer beware!!!

They did finally complete the renovations, hook up to city utilities and was able to sell the property for a $20,000 loss! What an expensive lesson to learn. Now we are brokers, I'm a Managing Broker and this stuff real does happen every day! So, I will never buy on-line through any auction company! 

Start with the state/county/city to see what is owed or if it is up for auction at this time. If the family doesn't know what is going on, then chances are there's issues in the family. Many times family members don't speak to each other EVER and off this goes. Sometimes opening up an honest conversation with family members has it's down falls and the first will be GREED.... What uncle bill died and the house is empty.... Oh my daughters/Sons/myself is in line for that property.... You see... you're not being dishonest just following the letter of the law. 

Many times, the state/county/city does try to find a relative but, to no avail.... Find out what the taxes are first or what encumbrances (liens) are against the property.... go from there.....

Unless credit is an issue or a need for down payment, why wouldn't you just purchase the home out right and get the lien holder off the loan. If the place is worth what you say it is, a loan would be simple. If the down payment is an issue, fine, raise the price up so it shows you gave the seller XYZ as a downpayment and close the loan.

Every time I hear (family member) I cringe because now if they chose to change their minds or someone says (another family member) WHY SELL TO HIM for $140K when it's worth much more? Nobody can predict the future and if you don't hold CLEAR TITLE "quiet enjoyment" then you may be subject to what ever comes your way. 

Your agreement will need to be concrete.... good luck with the purchase