All Forum Posts by: Larry Bowers

On what basis would it be waived? 

@Kyle J. I hope my follow-up question was clear because I am still trying to wrap my head around personal guarantees. 

My concern is that if the PG is not deployed correctly, I would not be able to get anywhere with it if it came to legal action. Would I be wrong in thinking of it like consigning on a loan?  

For a hypothetical example, ABC LLC is 100% owned by John. I have a personal guarantee signed by a third party, Joe. If the ABC LLC doesn't pay, then in order to get satisfaction, would I have the right to pursue John first because he owns the LLC? Or would he be completely off limits? And in any case I would be able to pursue Joe for payment? Or would I have the choice of either?

Single-member LLCs with the guarantor? Are those touchable?

If I have a borrower sign a personal guarantee on a loan that is unsecured by property, let's say $300K, and he doesn't pay after a while, of course I can't foreclose. There is no security. But as for the personal guarantee, what exactly does this mean, and in this case, is there truly any recourse? Is the personal guarantee worth the paper it is printed on? 

@Roman M.Yes, I was thinking like you in which a non-related property he owned would be liened. Ok, duly noted. 

I need to come clean. Truth is, I have done some deals with him before and at first they went well.  We signed notes & personal guarantees on all our notes. Our first few deal were secured, trust was developed, I lent unsecured and a lot more money at that, like a LOT more, and now there are problems, cuz he has been slow to pay. I haven't received a payment in several months. I am quite worried. Yes, I was stupid to continue and let him borrow unsecured and I won't be doing that going forward. But what's out there is out there. 

The borrower did sign a personal guarantee along with these. Or are these not worth the paper they are printed on? What would you do?

I am in Missouri, and have been approached by an experienced investor / flipper to borrow money for one of his projects  that he will be at a foreclosure auction. My question has to deal with how to protect my interests. Now, I understand the concept of a deed of trust being recorded using the property as collateral. In the past, all my transactions, like buying my own house and other investment properties were handled at a title company (we don’t normally use attorneys for closings normally in MO) and the deed of trust was handled alongside it automatically. 

For these foreclosure auctions, the investor has to arrive with cash in hand and will not know necessarily which property he will buy. So…how do I protect my interests before handing my money over? I can't have a deed of trust recorded when I don't know which properties will be involved, and I need to be sure that if I hand cash over that a deed of trust will be recorded after the properties are bought at the auction. 

I have a rant. Appraisers are always seeming to find any petty reason to come back out to the property to charge an additional fee to the buyer (usually that's me!) This time it is the hot water heater that is not yet installed. Lender is having me sign a document to acknowledge an additional fee of $175 fee for the appraiser to come out the house again to see there is a hot water heater present. 30 seconds of work. 

If the property appraises for enough, isn’t that good enough for the bank? I mean...if we are going to go down this path, then if the house doesn't have a garbage disposal or a dishwasher either, that could be the reason. I just don't understand why the standard residential appraisal can't have a firm & fixed price. 

Appraisers, agents, and others that have seen 1000s of transactions, is this a normal but ugly and accepted practice that will hopefully will be changed in the appraisal industry? I’ve bought 6 houses in the last year, and this has happened 3x already---seems like AMCs give marching orders to the appraisers to be petty and go to the house as early as possible to rack up extra revenue. Kind of reminds me of the airline industry with luggage fees! 

Thanks for reading. 

@Aaron Poling

Just circling back, Walter. Seller paid for the extension and, a rather magnanimous act considering he is much more experienced in real estate than I am. Ended up buying another house from him. I have to say I would have done the same in his position. 

@Aaron Poling Yeah, it's on me to cover my loan expenses, I agree. So far, it's not a lot of money here, just ~$200, but it could be more if we can't close this up this week.

I am expecting the title company to tell me that stuff happens and it's not their problem, that's just the way it goes and I just have to deal with it. Seems like title work is done last minute under duress and is driven by the closing date, not by the contract date.

I see a lesson learned perhaps, but Walter, do you agree that when buying the next property to notify the seller to order title work sooner? When would you say would be the best time to start that, right after the house inspection comes back favorably? 

I love that real estate tests my problem solving abilities at each and every turn. I got thrown a curve ball this week. Before I relent and go with the flow or stand my ground and ask for compensation, I need some advice.

I am buying a rental property and it was supposed to finally close last week, contract date is 08/22 and closing date was to be 10/03. However, the day before closing, errors with the legal description on the deed on the last sale of the property have delayed closing and looks like it will take another week at least to get clear title. The bank is hitting me with a rate lock extension fee because the transaction hasn’t closed. I want to know if I am being reasonable with believing that other parties, like the title company, seller, or a particular title insurance policy should compensate me for the fee. Or if banks routinely waive the fee upon request.

Some thoughts I have are: Shouldn’t the title company have caught this error sooner and compensate…why should I have to suffer because they waited until it was too late? What about title insurance policies, either the one that I am buying or the seller’s from when he bought the place, couldn't they be invoked to make everyone whole? If this isn’t covered by some title insurance policy, mine-to-be or the seller's, then what good is title insurance anyway? Do I own that title insurance policy yet since I haven't closed? Should I ask for compensation from the seller directly since he can’t give me a clear title? If the transaction did close and then the error was caught in a month or a few years from now, then fixing it would be covered by title insurance so why can’t it be invoked now? Should I just ask the bank to waive the rate lock fee, do they frequently do that upon request?