All Forum Posts by: Account Closed

Account Closed has started 141 posts and replied 4068 times.

Originally posted by @Troy Zsofka:

I'm not a real estate attorney, but this is what title insurance is for.

It is possible that your grandfather took the transfer as a quit claim deed as @Wayne Brooks mentioned, which means that no warranties were given as to the title being clear, and the transfer could have proceeded with the lien in place; as a quit claim deed simply grants the seller's claims on the property to the buyer and says nothing about other claims or liens. However, your grandfather still should have gotten an owner's title insurance policy; which should step in to handle to this up to the policy limit (typically the purchase price).

If he bought it all cash and decided to forego owner's title insurance, you may be out of luck.

Again, I'm no expert on this and I always retain a third party real estate attorney to handle title, and I purchase an owner's title insurance policy on all my acquisitions.

At this point, if you can find the docs from when your grandfather originally purchased the property, you can see if there is an owner's policy amongst the paperwork. At the very least you can identify the title company or attorney that handled the transaction and reach out to them. Otherwise, your best course of action is probably to engage a quality attorney to guide you on this.

Good luck

Just to add what you have correctly stated, there are a couple of valid reasons to occasionally use Quit Claim Deeds but there are serious pitfalls:

1. I can give you a Quit Claim Deed (QCD) for the Brooklyn Bridge (or for any house, even the house you own) for the amount of money you will give me. A QCD has the legal effect of saying "I give you any interest I may have in the bridge/house/property". That does Not Guarantee I Ever Even Had an interest in the Bridge/House/Property. Since I am not guaranteeing you anything, when you sue me you will lose, if an attorney will even take the case.

2. Most Title Insurance companies are very wary about Quit Claim Deeds and might not issue Title Insurance on a property transferred by QCD.

3. Since it was transferred by QCD you don't know what other family, friends, relatives, or others might have a right to the property and pop up later. Then you've got a lawsuit on your hands.

4. If you buy using a QCD, and the person selling the property doesn't have the right to sell, when the rightful owner finds out, you can be charged with fraud, forgery (they will claim you forged the signature), bank fraud (if there is a loan on the property), mail fraud, and various other items, none of which further your investing career. The loan can also be called on the Due on Sale Clause causing a mess for the true owner. Then you can be sued by the owner for Fraudulent Schemes and Artifices.

5. I explained all of this because I like using big words (and as an aside keeping people out of trouble.) ;-)

1 Vote

Originally posted by @Miriam Velazquez:

Hi everyone,

I'm currently accepting applications for my first rental property and I received an inquiry from a military applicant. I was wondering if anyone has experience with the process of renting to the military? I have spoken to the military representative and they stated there won't be an application that the tenants submit or a background check on the tenants because I would be renting to the military directly and not the tenants themselves. And the lease will be a lease provided by the military. Is this a normal process? I'm not sure how I'm supposed to make a decision of whether I want to rent to them and I am also concerned, because the previous house in which these people stayed in burned down. We were assured that it wasn't their fault, but makes me weary to blindly trust their word. If this is a normal process, am I entitled to any information about the people who would potentially stay at my rental?

I once accepted a year long lease from an Insurance company. Rent was always on time. The tenants house had a kitchen fire, they needed a place to stay while the rehab was done, the insurance company of course did their inspection of the damage and covered the damages. It was determined to not be their fault.

Keep in mind that a military tenant (who are normally very respectful of property) can be disciplined for any problems caused at the property. It affects their career. Not likely to have any problems.

1 Vote

Originally posted by @Davin Jeffers:

I currently have a home for sale and have accepted an offer over asking price. My concern is that the comps are bad. So how have you seen appraisals in this hot market. Have there been a large increase in miss appraisals?

What most people don't know is that an appraisal isn't what the property is worth today. It is one person's OPINION based on similar properties that have Recently Actually Sold. An appraiser isn't going to risk his license and a lawsuit from the bank guessing where the market is going. So, when a property has an offer above asking, keep in mind the appraiser is basing his opinion on what has already sold, not what someone is willing to pay. Unfair? Maybe, but it's the bank's rules and if you want their money you play by their rules.

0 Votes

Originally posted by @Michael Castillo:

Hi all,

A few friends and I are trying to get started in our real estate investing journey and want to focus on cash flow from rental properties. Unfortunately, we live in Southern California, and we don't have the resources to pay a 20% down payment on a house. So we are considering investing outside of California to generate stronger cash flow from Day One.

Do you have any advice? What should we consider when looking at out-of-state properties? (turnkey investing vs. traditional?) We have been doing some research and have been advised to invest in-state (more familiarity with the area, laws, etc.). However, given our resources and the California housing market, this isn’t really an option for us.

Any advice is extremely appreciated! Thanks for the help!

Best,

Michael

Check into Las Vegas.

0 Votes

Originally posted by @Joe S.:

Does anyone have any insight on negotiating on a Hud house? Is there a percentage that you can go below the asking price or do you simply take the price or leave it?

If you mean REO (real estate owned) property the bank now owns, it depends on the market. In a soft market where the house has sat unwanted for a while, there may be some room to convince them to reconsider.

I haven't tried for a HUD REO in years but I'd guess two things: 1. Since the market is so hot right now, almost everywhere, unless the BPO from the real estate agent was way off, market demand will keep those prices pretty much where they are (until everything changes and the current crop of forbearances expire and 8,000,000 houses hit the market. 2. "Because of covid", everything in government is moving very slowly and it may not be worth your time to tie up your funds waiting for them to respond, have to resubmit your offer and wait some more.. It's a "time value" kinda thing.

Years ago, in the great crash, there were agents who specialized in knowing the REO market and what offer to make and what paperwork to submit, which varies by lender. I'd locate with such an agent and have lunch and get the current details.

1 Vote

Originally posted by @Shella Stephens:

I am actually looking to sell my current manufactured home as a subject 2. Is this legal? Can Mobile homeowners sell their house as a subject 2 like regular properties? I am in the process of researching this subject. But I can't find much information. If anyone can direct me in the right direction, I'd appreciate it. I am clueless.

Yes you can sell using Sub To, Land Contract, Owner Financing - what is frowned upon and difficult to do correctly is Lease Option. Keep in mind if you have a mortgage on it, the loan might be called because of the Due on sale clause.

1 Vote

Originally posted by @Jimmy O'Connor:

Hey @Account Closed!

I recently made a pretty comprehensive breakdown of neighborhoods and outsell values for rehabbed properties ranging from cosmetic to full on rehabs : A Breakdown of Philadelphia Neighborhoods and Values.

Philly has several submarkets, it is important to get a better idea of what your strategy is before one can start pointing you in the right direction. What are you looking to do?

Philadelphia has a bit of a reputation for being pretty rough. Just curious how you deal with that.

0 Votes

Originally posted by @Joe Splitrock:

Originally posted by @Jason Chung:

I always hear folks saying Seattle is not landlord friendly, so I should not buy an investment property in Seattle. But reading up on the tenant/landlord rules, I don't really see any concerns. What is everybody worried about?

There is no rent control. I can increase rent as long as 1) I give 60 days notice if its above 10%, and 2) it's on a month-to-month.

My guess is you have not actually read all the rules or you don't understand the implications. Seattle is has some of the most tenant friendly policies in the country. Seattle is probably a toss up with San Francisco as the least landlord friendly place in the country. You may mistakenly think if you do your best to follow the rules that you will be fine. The problem is bad tenants can easily exploit these protections and good landlords are left powerless.

Here are the major areas that people see problems:

1. Extra protections on tenant screening. This means the local laws go beyond Federal Fair housing with additional protected classes. This includes source of income, which means you can't prohibit someone from renting that is on government assistance. These extra rules all make it harder to navigate and it opens you to many ways you can be accused of discrimination. (Keep in mind that even if you think you didn't discriminate, denying a protected class gives the appearance you did). Additionally there is a First-In-Line law which requires a landlord to rent to the first applicant that meets qualifications. You must maintain written qualification standards and keep records of when each application is received. If you are denying someone, be prepared to cite a specific criteria. In general this is all fine, but it puts extra responsibility on the landlord and leaves you open to accusation of improprieties. In most states you can pick whomever you want and don't have to give any justification.

https://library.municode.com/w...

https://app.leg.wa.gov/rcw/def...

2. Just cause eviction rules limit the reasons you can ask a tenant to leave. If you want to rehab a property, you need to give longer notice and even pay relocation costs in some cases. In most states you can just "not renew" and you are not required to provide any reason.

https://library.municode.com/w...

3. Evictions can be difficult. Tenants get free legal representation and can delay legitimate evictions for no reason. It can take considerable time and money to reclaim a property. Courts are tenant friendly. These free attorneys will find any technicality to keep the tenant in the property and it leads to having to pay off the tenant to leave. The courts are not fair and even less fair if you don't keep immaculate records.

4. City and state continues to expand tenant protections. Just this month (June 2021), the Seattle city council approved three new tenant protection bills. These protections make it harder to get bad tenants out of your property. For example, you cannot evict a family with children during the school year. So they stop paying September 1 and you can't evict until June! Another bill requires landlords to give tenants "right of refusal" for lease renewal. That means you are forced to renew leases unless the tenant has violations or other just cause reasons to make them leave. Sometimes tenants are a pain or cause problems that don't raise to the level of "eviction", so landlord use non-renewal as a way to just find a new tenant. Now you are stuck with someone forever once you sign that lease. The city council will continue to extend more protections in the future, so this will get harder and harder for landlords.

https://www.msn.com/en-us/news...

There are landlords who successfully navigate, but you really need to be well versed on the law and have bullet proof processes in place. This is easier if you operate at scale, but for a mom and pop running a few properties, it can be difficult.

I will also add that beyond the landlord issues, there is a major concern with crime that is affecting desirability to live or operate a business in the city. In the last year, over 250 police officers have resigned. That is almost 20% of the police force. Businesses are closing. Drug use is out of control. The reality is that good people leave an area when crime gets out of control.

Good overview!

As Doc would say to Captain Kirk. "It's worse than that, worse than that Jim, he's dead Jim, dead Jim". The patient is dead. Only the uninitiated will walk straight into That trap.

1 Vote

Seattle, Washington

Originally posted by @Parker Maher:

@Mike Hern

How do you know that? 😉

Can you please elaborate more on the “bail in”?

Does it only apply to HELOC's or does it only apply to home equity loans?

Setting the hype aside (and there is a lot of hype) Dodd-Frank Act of 2010 has the following provision:

"While the act is meant to protect businesses that “stimulate the economy” or are “too big to fail,” thanks to the loopholes in the verbiage, if you happen to hold your money in a savings or checking account at a bank, and that bank collapses, it can legally freeze and confiscate your funds for purposes of maintaining its solvency. This is known as a “bail-in.” Meaning that instead of relying on government funds (taxpayer money) to save itself from going bankrupt, a bank can simply dip into your deposit accounts to stabilize itself. In other words, bail-ins will not add to the government’s deficit. It will simply allow banks and financial institutions at risk of failing to take some of your deposits to bail themselves out. A perfect scenario, where neither the government nor the too big to fail institutions bear any risk. It all falls on YOU “the depositor.” Is this ethical? No. Legal? Yes.

If you believe the economy is healthy and the government printing $6,000,000,000,000 (6 trillion dollars) has no effect then you've nothing to worry about, until "it" happens.

By the way, $6,000,000,000 buys about 20,000,000 (20 million) $300,000 houses. Can someone explain how that does not have a hyper inflationary result. ;-)

0 Votes

Originally posted by @John Cline:

We want to put the house in a land

trust and an llc next year, the note is a joint one, myself and my wife

are the mortgagors- did you think the lender would allow a one member

llc to have a jointly owned house within a land trust in it?

What is "the house"? The mortgagor is the lender. The mortgagee is the borrower.

You loan probably has a "Due on Sale" clause that could be called if you switch owners (move the property into a LLC. Just ask your lender. Some have no problem with it.

There is very little advantage to having your home in an LLC or Land Trust. However, Putting your Rentals into a LLC is different. But even then, it's faster, cheaper and better just to get an umbrella insurance policy instead of worrying about an LLC.

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All Forum Posts by: Account Closed

Account Closed has started 141 posts and replied 4068 times.

Post: Real Estate inheritance with lien against previous owner

Post: Military tenant applicant

Post: Missed appraisals in a hot market

Post: Out of State Investing for Cash Flow

Post: Keys to Negotiating a HUD house?

Post: Is Subject 2 legal in Texas?

Post: Philly - Yay or Nay?

Post: Is Seattle really that bad for landlords?

Post: HELOC vs Home Equity Loan

Post: land trusts and llcs