All Forum Posts by: Jesse Smith

You're correct, I was hoping to win it by $50.  Still doesn't make it hurt less to lose it by that small of a margin.  If I had been able to pull the trigger and offer in person, I'm 98% sure I would have been able to close the house for $50,000 flat.  My wife and I have had that discussion, but she also likes to be involved with the final call.  That really hurt this one.  

I definitely appreciate the advice.  The post was definitely me blowing off some steam.  The agent told me that she was calling people back in the order of their original offer (lowest to highest) and asking for their best offer.  I had to go first, since my original offer was lowest.  She told me what the highest offer was at the time ($55,000), so I'm confident that she told the final person that my offer was $57,500... thus the final price of $57,550.  I would have liked to had the opportunity to make a final offer like they did.  I'll chalk it up to a lesson learned, albeit a painful one.

That is definitely possible, but I didn't get that impression from the agent.  She acted surprised by my escalator offer.  It also seems odd that they would use the exact interval I did.  

I'm mostly writing this post to vent to people who will likely understand my frustration.  I'd also like to get advice or perspective from those who have strategies to swing the odds in their favor, when negotiating a purchase.

I'm a relatively small-time investor (currently 13 units).  Most of my properties are very close to home.  I'm also a realtor, and I've set auto alerts to notify me immediately when new houses are listed in my target area.

Yesterday, I got a notification of a 2/1 for $50k. Knowing the area, this property's ARV would be $135k, with about $15-20k invested. My plan, however would be to buy and hold, because rent would be around $1,100/mo.

As soon as I got the notification (within 2 min of listing), I called the agent.  She agreed to meet me at the property.  The owner was also there, and we chatted some.  He said he needed to move quickly bc of a family health issue, so he wanted a quick, painless, cash sale.  We had a great chat, and I said I needed my wife's approval for the purchase, and I would let them know within an hour.

Wife approved, and I called the agent with the full price offer within 30min.  I also offered to help the seller move items out of the house.  Her tune had changed, and she said they would be waiting until tomorrow to choose an offer.

She called me today at 4pm and said they had gotten 5 offers, all cash.  She asked for my best offer, and I offered an escalator up to $57,500, in $50 increments.  She called back 30min later to say they accepted another offer of $57,550.  

It seems to me that she gave my final offer to another buyer, who simply tagged $50 on and took the house.  This is extremely frustrating.  I would have loved to get that same opportunity to outbid their offer for a final acceptance.  Losing this house over $50 is maddening, and it makes me wonder what I could do differently in the future.

Thoughts or advice?

@Tom Gimer - That's what I'm figuring, but now I can't seem to specifically tie the loan number from the 2000 note.  I've gotten very close, but I can't track down the 2000 note itself.

• I have the loan proposal from 2002 that references that 2000 loan number as the "current obligations"
• I also have the deed from 2000, but it only lists the first 6 digits of the loan number, and those are common to all loans from Lender A

It seems very clear to me what happened, but without conclusive evidence (filed release or note from 2000), I can't seem to get the title company to underwrite an owner's policy.  

@Evan Wiesner  Upon further review, it appears to be the proposal for insurance and not the actual policy.  Interesting.  

I have, however, gone down to the recorder's office and pulled records myself.  I found the original DoT from 2000, and no documents anywhere in their system reference it.  If a release or modification had been filed, it would reference the original DoT.  I also checked all records for the property and all forms of the seller's name, maiden name, and her husbands name... nothing for a release.  I'm convinced it doesn't exist.  I just need to confirm that the note referencing that DoT was paid off.  

If I can confirm the payoff, how would I go about getting a release filed at this point?  Especially if the original lender is out of business.

 This string of documents seems to tell the story, but without the actual release of the 2000 deed filed, how do I proceed?

I'm in the process of trying to purchase an off-market deal in my neighborhood.  I already own one of these, and it's a tremendous cash flow property.  During the title search, the following issue came up:

Property is a duplex with approx value of $165k.

• Seller got a loan for $94k in 2000 from Lender A, secured by a deed on the property
• Seller got another loan for $105k in 2002 from Lender A, secured by a deed on the property
  • Seller claims that this was a refinance of the original loan, with additional debt rolled in
    • Loan docs from the seller suggest this is true, BUT the box labeled "refinance" is not checked
  • No modification or release was ever filed for the 2000 deed
  • Title policy from the 2002 transaction listed the original 2000 deed as an exception to coverage
  • The HUD-1 settlement from 2002 doesn't show any specific payoff of the original note.
• The current loan servicer sent a payoff statement that will release the 2002 deed, but no mention of the 2000 deed

I reached the person listed as trustee on the deeds. He was a lawyer, but is no longer practicing, and he said he does not have access to any docs from 17 years ago. He also claims that he "allowed Lender A to use his name," but he doesn't know exactly what they were doing.  It seems like he should have been responsible for filing the release or modification when the refinance happened.  

I am not sure how to proceed, because my title company will not write an owner's policy, if there isn't a release on the deed from 2000 ($94k). They have offered to write the policy with the 2000 deed as an exception.  I don't want that, because it would just create an issue for me when I eventually sell.  Lender A is no longer in business, and the servicer doesn't have any records available to show a release of the 2000 deed.

I know that's a lot to digest.  Any advice?

I have a duplex under contract at a great price. $112,500, with neighborhood comps at $145,000. Rent will be $1,850 total vs a 30yr PITI around $730.

Unfortunately, when I apply for financing, banks jack the rates for loans under $100k (after 25% down payment).  Others have a cut off of $125k.  The rate jumps from 5.5 to 5.875%

Any large/national lenders that don't do this?  Other ideas?  I can't borrow from community banks, bc my wife is a federal bank regulator.

@Spencer Hogan Thanks for the reply.  This is exactly the kind of info I'm looking for, and I appreciate your expertise.  

Seems like I've got a lot more research to do for OZ benefit qualifications.  I'll have some sizable capital gains coming, if I decide to sell some properties I've acquired over the past 5 years.  Having this as a tax shield and the opportunity to do some good seems awesome.  

I'm probably out of luck here, but I'll ask anyway.  On October 4, 2017, I sold $75,000 of stock ($11,500 capital gains) to invest in two local properties.  When the Tax Cuts and Jobs Act identified Qualified Opportunity Zones on Dec 22, 2017, these properties fall within one.  

I paid the capital gains tax on my 2017 tax return, but now I'm wondering if I can file an amendment and recoup the amount paid, since it went into a QOZ.  I know that the QOZ's were added to the tax code on Dec 22, 2017, but the FAQ from the IRS website gives an example that stock sold on Dec 15, 2017 could qualify.  Could stock sold on Oct 4, 2017 also qualify, since the QOZ's were added within the 180-day investment window?

Any CPA's have insight on this one?