All Forum Posts by: John Clark

I'm currently looking for a my next deal in Chicago and my search has been all MLS deals. I'm searching for a 2-4 unit, but I haven't found anything that works for me. Btw, I'm talking about C-ish class and above properties (no D class). I tend to be cautious and conversative with my deal analysis, but am I the only one finding it a bit difficult in Chicago? If someone can point me in the right direction let me know!

 The 2 lenders we spoke with so far are scared of the word "commercial" right now even though it's mixed use. I'm sure his bad credit doesn't help either

Median household income 2019: $83,260
Median household income 2024: $83,730

Median home price 2019: $254,700
Median home price 2024: $407,500

This is why we're in such a tough situation across the country.

I get real estate "always goes up", but at some point you price

out an entire generation.

Hi fellow BP investors. I'm currently looking to flip a house or two in my local B class neighborhoods. For context, the ARV I'm shooting for is $325,000. This is my first deal so I'm trying to be cautious but also not necessarily looking for a home run, but rather the experience. I'm looking for homes that need moderate rehab ($30Kish). Given those numbers, the standard formula would say $325K x 70% - $30K = MAO. That would net me around $50K after holding costs. Would it be foolish of me to be okay with $15-20K after holding costs? Would there be additional points to consider?

Signed,

Newbie 

My mother wants to transfer ownership of title over to an LLC she owns. The bank she has a heloc out with is telling her they could call the loan due and that they would need to be paid in full.
Any suggestions, solutions, or ways around this problem ?

Thank you all!

Cedric

Quote from @John Clark:

Quote from @Ken M.:

Quote from @Ken M.:

Quote from @James Wise:

Quote from @Ken M.:

Quote from @Chris Seveney:

Quote from @Ken M.:

Well, actually it's a huge problem. A huge (81 page) lawsuit just got thrown at over 40 LLC's, numerous individuals, two Title companies and Three Attorneys for doing what?  AZ Case No: CV2025 008402 March 7 2025

Buying foreclosures. Well, both Buying foreclosures and how they did it with SubTo, 

There is a legal way and then there is the "get rich quick by listening to a guy on youtube" way. The interesting thing is that once you have rung that bell and bought a property in foreclosure the wrong way, there is no way to unring the bell. You simply spend the $25,000 on an attorney and a year and a half in court. 

They were/are buying in CA, AZ, OH, FL, WI, TX, SC, NC, CO, GA, DC and several other states. I guess they listened incorrectly to their "community". It became an echo chamber of wrong information. 

For all of you jokesters who were laughing and smirking at me for saying "be trained or don't do foreclosures", here ya' go. This one is very serious.

The things they are being charged with are criminal and are the things the uninformed don't know/think about. They are still against the law, and  the court ignores "the attorney said I could" plea. Well, apparently you either didn't hear him correctly or you had the wrong attorney. 

Here are some of the charges

Buying foreclosures

False & Misleading Statements

Using Invalid Contracts

Exploitation of Vulnerable Adults

Bankruptcy Fraud

Probate Court Fraud

Title Fraud

Unlawful Eviction

Violation of Consumer Fraud Act

Violation of Consumer Fraud Act Recruiting

Violation of Consumer Fraud Act Omissions

Violation of Consumer Fraud Void Contracts

Violation of Consumer Fraud Foreclosure Consultants

Violation of Consumer Fraud Unauthorized Practice of Law

Racketeering - Scheme or Artifice to Defraud

Racketeering - Forgery

Racketeering – Illegally Conducting an Enterprise

Alter Ego

Lis Pendens

All parties are assumed innocent until proven guilty in a court of law

 I am sure if you searched some of my prior posts I have been warning people about approaching people in foreclosure claiming to "help them" by taking advantage of them, even if you were trying to do the right thing, it does not matter in many instances as you may be perceived of taking advantage of someone in distress.

I would also bet a very large sum of money we are going to see more of this occur just like we did ten years ago with CFD's getting into legal hot water, especailly as market softens and foreclosures start to ramp back up.

Here is link to a summary of article:

Attorney General Mayes Sues Real Estate Operators and Title Companies for Defrauding Arizona Homeowners | Arizona Attorney General
SubTo, Subject To, Foreclosure

 Yep. You and I and @Jay Hinrichs: and @Don Konipol: and other very experienced investors have been really clear about the consequences of not following the law and not using best practices. Now @James Wise: and @Peter Walther: have something to be specific about.

The list includes three attorneys and two title companies, and as far as I can tell, these are not people who have posted on BP.

I'm going to repost your link in case someone is interested in what to avoid doing.

Attorney General Mayes Sues Real Estate Operators and Title Companies for Defrauding Arizona Homeowners | Arizona Attorney General

For you lurkers:
It doesn't matter what your attorney says, if you get sued anyway. Select a different attorney to defend yourself.

A wise man once said......Anyone in the Sub2 game is trash. Most likely a criminal and a con artist.

Good to see you survive and didn't get blown away by that nasty storm.

The trouble actually seems to be the forgery, false statements to the bankruptcy court, invalid contracts, stealing equity from people in foreclosure  - well the list goes on. 

Don't get me wrong, the complaint is 81 pages of bovine excrement.

The filing is available as a PDF at 

https://www.azag.gov/sites/default/files/2025-03/CV2025-0084...

CV2025-008402 State of Arizona v. Cameron Jones et al FILED (1).pdf

It's really important to get this one right. If you plan on doing Subject To or if you run into an opportunity for one, there are restrictions on what you can do. There are real estate brokers and attorneys who purport to know how to do these. They apparently have never actually done one themselves. 

So, whoever you listen to on this issue, ask them if they have ever successfully done a Subject To or bought a property using Creative Finance.

I've seen a lot of bad advice on Bigger Pockets.

Oh, by the way, I've done only Creative Finance and Subject To for 30 years. I've even litigated Subject to & Foreclosures.

Buying foreclosures. Well, both Buying foreclosures and how they did it with SubTo,

There is a legal way and then there is the "get rich quick by listening to a guy on Youtube" way. The interesting thing is that once you have rung that bell and bought a property in foreclosure the wrong way, there is no way to unring the bell. You simply spend the $25,000 on an attorney and a year and a half in court.

They were/are buying in CA, AZ, OH, FL, WI, TX, SC, NC, CO, GA, DC and several other states. I guess they listened incorrectly to their "community". It became an echo chamber of wrong information.

I’ve seen a lot of bad advice too, Ken. The first is to do sub2. The second is that it’s okay to not record when you do. Care to comment ?

.
@John Clark: First, "Subject To" is for experienced investors who have money. Period!

SubTo is promoted by Pace Morby who says it's a good plan to contact real estate agents, buy the property from an agent for full price off of the MLS. You then borrow the money to close from a "gator" lender, in fact you can close in the person's home and save the title and escrow fees. This makes the transaction go quickly. (SubTo is completely different than "Subject To".)

Subject To, I have always maintained that you use Escrow, you use a Title Report and Insurance, you use a properly designed Purchase and Sale Agreement, you use Disclosures, you use a Notary, you use a Warranty Deed, you get Authorization in Writing to speak directly to the lender, you get a payoff, you get a reinstatement amount, you bring the loan current and you record. You don't hide the recording in a land trust or other device. Always have the ability to cure the Due On Sale if that should become an issue.

You record openly and  notoriously. and you make every payment on time. (These two saved me in one such lawsuit)  

If the lender won't allow the loan to reinstate, you've lost your EMD but you don't get sued. The sale has failed. You advise the seller, who is in foreclosure, to contact a bankruptcy attorney to see if filing a Chapt 13 is appropriate. You let it go!!

Now, in the previous discussion, the fellow did none of that. He simply got someone to sign a quit claim deed. He promised the rest. But, it seems he didn't have the ability to bring the loan current or the matter wouldn't have been an issue.

My advice was for him to back out of the deal, notify the seller who should then contact an attorney to decide what to do next.

I believe your response was that the buyer should record the deed anyway.

I disagreed.

Recording under those circumstances would cloud the title of a property in pre-foreclosure, not a worthwhile action and very dangerous. He would most likely be sued, lose the property and be responsible for misrepresentations to the seller. Who knows what other laws he broke. Unless we could see the actual paperwork, we wouldn't know what legal peril he faced.

Then you insisted he should record anyway. 

I obviously missed something; Please show me what you meant: So, I sarcastically said:

"always record, unless you've done something stupid that you don't realize is stupid,"

"and can't know that is stupid,"

"because you weren't smart enough,"

"or you were too cheap to pay for my training"

"and the list of stupid things includes, but is not limited to, not bringing the loan current "
"when you buy a property Subject To, There are plenty of stupid things to do using Subject To, and this is only one."

and anything else I missed ?

Quote from @Ken M.:

Quote from @James Wise:

Quote from @Ken M.:

Quote from @Chris Seveney:

Quote from @Ken M.:

Well, actually it's a huge problem. A huge (81 page) lawsuit just got thrown at over 40 LLC's, numerous individuals, two Title companies and Three Attorneys for doing what?  AZ Case No: CV2025 008402 March 7 2025

Buying foreclosures. Well, both Buying foreclosures and how they did it with SubTo, 

There is a legal way and then there is the "get rich quick by listening to a guy on youtube" way. The interesting thing is that once you have rung that bell and bought a property in foreclosure the wrong way, there is no way to unring the bell. You simply spend the $25,000 on an attorney and a year and a half in court. 

They were/are buying in CA, AZ, OH, FL, WI, TX, SC, NC, CO, GA, DC and several other states. I guess they listened incorrectly to their "community". It became an echo chamber of wrong information. 

For all of you jokesters who were laughing and smirking at me for saying "be trained or don't do foreclosures", here ya' go. This one is very serious.

The things they are being charged with are criminal and are the things the uninformed don't know/think about. They are still against the law, and  the court ignores "the attorney said I could" plea. Well, apparently you either didn't hear him correctly or you had the wrong attorney. 

Here are some of the charges

Buying foreclosures

False & Misleading Statements

Using Invalid Contracts

Exploitation of Vulnerable Adults

Bankruptcy Fraud

Probate Court Fraud

Title Fraud

Unlawful Eviction

Violation of Consumer Fraud Act

Violation of Consumer Fraud Act Recruiting

Violation of Consumer Fraud Act Omissions

Violation of Consumer Fraud Void Contracts

Violation of Consumer Fraud Foreclosure Consultants

Violation of Consumer Fraud Unauthorized Practice of Law

Racketeering - Scheme or Artifice to Defraud

Racketeering - Forgery

Racketeering – Illegally Conducting an Enterprise

Alter Ego

Lis Pendens

All parties are assumed innocent until proven guilty in a court of law

 I am sure if you searched some of my prior posts I have been warning people about approaching people in foreclosure claiming to "help them" by taking advantage of them, even if you were trying to do the right thing, it does not matter in many instances as you may be perceived of taking advantage of someone in distress.

I would also bet a very large sum of money we are going to see more of this occur just like we did ten years ago with CFD's getting into legal hot water, especailly as market softens and foreclosures start to ramp back up.

Here is link to a summary of article:

Attorney General Mayes Sues Real Estate Operators and Title Companies for Defrauding Arizona Homeowners | Arizona Attorney General
SubTo, Subject To, Foreclosure

 Yep. You and I and @Jay Hinrichs: and @Don Konipol: and other very experienced investors have been really clear about the consequences of not following the law and not using best practices. Now @James Wise: and @Peter Walther: have something to be specific about.

The list includes three attorneys and two title companies, and as far as I can tell, these are not people who have posted on BP.

I'm going to repost your link in case someone is interested in what to avoid doing.

Attorney General Mayes Sues Real Estate Operators and Title Companies for Defrauding Arizona Homeowners | Arizona Attorney General

For you lurkers:
It doesn't matter what your attorney says, if you get sued anyway. Select a different attorney to defend yourself.

A wise man once said......Anyone in the Sub2 game is trash. Most likely a criminal and a con artist.

Good to see you survive and didn't get blown away by that nasty storm.

The trouble actually seems to be the forgery, false statements to the bankruptcy court, invalid contracts, stealing equity from people in foreclosure  - well the list goes on. 

Don't get me wrong, the complaint is 81 pages of bovine excrement.

The filing is available as a PDF at 

https://www.azag.gov/sites/default/files/2025-03/CV2025-0084...

CV2025-008402 State of Arizona v. Cameron Jones et al FILED (1).pdf

It's really important to get this one right. If you plan on doing Subject To or if you run into an opportunity for one, there are restrictions on what you can do. There are real estate brokers and attorneys who purport to know how to do these. They apparently have never actually done one themselves. 

So, whoever you listen to on this issue, ask them if they have ever successfully done a Subject To or bought a property using Creative Finance.

I've seen a lot of bad advice on Bigger Pockets.

Oh, by the way, I've done only Creative Finance and Subject To for 30 years. I've even litigated Subject to & Foreclosures.

Buying foreclosures. Well, both Buying foreclosures and how they did it with SubTo,

There is a legal way and then there is the "get rich quick by listening to a guy on Youtube" way. The interesting thing is that once you have rung that bell and bought a property in foreclosure the wrong way, there is no way to unring the bell. You simply spend the $25,000 on an attorney and a year and a half in court.

They were/are buying in CA, AZ, OH, FL, WI, TX, SC, NC, CO, GA, DC and several other states. I guess they listened incorrectly to their "community". It became an echo chamber of wrong information.