All Forum Posts by: John Clark

1. Get an honest, independent, appraisal of the lot. If $40k is the value of the lot, then you have a reasonable neighbor, and don't antagonize him by offering $5k or $10k.

2. Doubtful your title policy will cover it, but the faster you make a policy claim, the faster you'll know where you stand.

3. People have talked about "he'll have expenses, too." True, but irrelevant. Your downside is bigger than his. If you don't have adverse possession, he can make you tear the building down. If I was him, I'd demand you not only buy the lot, but pay me my attorney's fees and expenses in exchange for agreeing to settle and NOT exercise his right to have you demolish the encroachment.

4. Why in the name of all that is holy did you proceed with the purchase when you knew that there was such a massive encroachment? Even six to twelve inches (let alone feet) is too much. Somebody needs his head examined, and it's not your neighbor.

Externalities. Your neighbors didn't sign up to live next to a hotel, they expect either another homeowner or a long-term renter. The increased traffic and rowdy behavior of vacationers and other short-term transients imposes costs (direct, indirect, and quality of life) on your neighbors.

That's WHYYYYYY.

"To require this of me would force me to be in violation of the legal requirements regarding LLC’s mixing of funds between personal and the LLC business accounts. Thus, they are exposing me to liability."
------------------------------------------------------------
What "legal requirements" are you referring to?

As others have said, try to talk to someone at the servicer/lender and find out why they are making the change.

Right now, as I understand it, you have a mis-match in legal entities: Your LLC has title to the property, but the mortgage is in your name. Problem is, the LLC is paying the mortgage. The servicer/lender has its own audits to contend with, and a stranger paying your mortgage raises a flag to your servicer/lender inspectors, and puts the onus on the institution to show that you and your LLC are jake. Far easier to put the onus on you: Your check, not the LLC's check, goes to your mortgage.

Helps prevent money laundering, too.

"Is this fear warranted or am I over thinking it? "

-------------------------------------------------------

Overthinking. Whenever anyone questions your purchases or lifestyle, just tell them to become landlords. Once they see how much of a bargain they're getting renting your place, they'll shut up.

@ Brian Ploszay

Blackrock is one institutional investor buying houses, but they are a very small percentage of the market. No group can corner the market, or really make a dent nationally on pricing.

--------------------------------------------------

National perspective (except for political purposes) is irrelevant: real estate is uniquely a local-conditions driven market. On a local level, Black Rock and its ilk can and do have large impacts.

What is interesting is finding out why Black Rock is not investing in places that it is not investing in -- like Chicago. That would highlight what is wrong with those areas and what needs to be done to fix them. If you are an out-of-state investor, it seems like following Black Rock into a market would be a good strategy, as it has done the research for you.

"If you don't want to be paid in cash make sure that is in your lease agreement. If they still want to pay in cash just refuse to take it."

------------------------------------------

If the lease is silent on the issue, you cannot refuse cash. A court would find that rent in full was reasonably tendered, and the refusal still results in a credit of the rent payment in favor of the tenant. So, no, you cannot "just refuse to take it" if the lease doe not specify manner of payment. Additionally, your lease should also explicitly forbid cash payments in addition to specifying another manner of payment.

This is why God invented co-signers. Call mummy and daddy.

"I was in a contract for a duplex in California and had my appraisal and loan contingencies in place. The appraisal came at value but for some reason (finding discrepancy in rent info between listing and seller's disclosures), I decided not to remove my contingencies and cancel the contract. To clarify, my loan was not denied but I had my contingency in place. It's been a week and seller has not signed the cancellation letter yet, they don't respond to our calls or emails. I need my deposit back in my account ASAP for another purpose. Is there anyway to push the seller to sign the letter or somehow expedite this process?"
------------------------------------------------
You had an appraisal contingency, and it was satisfied. You had an inspection contingency, and it was satisfied by waiver. You have two remaining grounds for voiding the contract: financing, and fraud in the inducement.

As others have said: Would FHA lend to you using the proper, accurate, rent rolls? If not, then your financing contingency is NOT satisfied -- the approval was based on false material information. Don't go to closing only to find out that FHA has backed out of the loan because it re-ran its numbers using the good data. So financing contingency satisfaction is "maybe."

Finally, there is fraud in the inducement: The seller gave you false material information with the intention that you rely on it. Others have pointed out that some contracts have buyer's-burden-to-verify-information clauses, but in most states that probably won't excuse a seller lying about information solely in the seller's knowledge. Not that the buyer can ignore signs that the seller is lying, mind you, but buyer's-burden clauses are not usually get out of jail free cards for sellers.

With the real data, does the property: a) satisfy the FHA for lending to you (YOU don't want the FHA coming back at you for fraud), and; b) satisfy your investment goals? Your answers to those determine whether you want to proceed.

I typically steer clear of dishonest sellers and dishonest buyers.

"It’s located in the south suburbs..."
------------------------------------
Which one? South suburbs can have enormous property taxes and fees -- to the point of negative appreciation -- because they have no other tax base. Some are okay. I wouldn't touch Harvey with a ten foot pole, however.

"There is no way I will be able to afford a housing in the loop so I am looking more towards the outskirts(west and north) of the loop and hopefully find a good duplex."

--------------

Loop is condominiums, not duplexes. Also, why are you looking only at the West and North sides? South and Southwest sides (follow the Orange line, Green line, and Red line) are much more affordable and just as stable.