All Forum Posts by: Charlie MacPherson

Don't forget to scrub your call list against the Do Not Call list.  You can get sued for violations.

https://www.dmnews.com/ftc-tel...
Here's a law firm that anxious to sue you: https://www.stop-telemarketers...
Here's another one: https://robocalllawsuit.com/pe...

You might want to try a different approach.  Social media, PPC, direct mail, etc.

You say that you own restaurants.  Perhaps one of the things to consider is selling one of them.

To get an idea of market value, take your income from ALL sources (salary, perks, draws, company-paid personal expenses), add depreciation, amortization, interest on loans, one-time expenses (renovations, large repairs) and add them together.

That gives you your Seller's Discretionary Earnings.  Multiply that by 2.5  (can be between 2 and 3.5, depending on the particulars) and that gives you the value of the business component of the sale.

Add to that the book value of assets, inventory at cost and real estate if any and you have an asking price.

Find a business broker in CA - NOT a commercial real estate broker.  Get a read on what their program is for marketing your business.  CA requires that business brokers have a RE license to sell a business with or without real estate, so I can't help you there.

Beware of business brokers who charge massive upfront fees.  One (their initials are G.E.) is famous for doing seminars to "teach you how to sell your business".  What they really are selling is a VERY expensive business valuation.  Last I heard, it was $30,000 to start.

If you have enough equity in one of your restaurants, you may well be able to get your own place again.

Good luck!

I might be wrong, but this sounds like a scam, partially because you found it on Craigslist which is ground zero for scammers.

As @Marshall Leipprandt said, you need local help.  An agent to see the home.  A title company / closing attorney to run a title report.  A home inspector to go through the house.

$10K EMD isn't necessarily out of line, but who are they suggesting holds it? If they want to hold it themselves, that raises the scam alert even higher. It should be in escrow with YOUR attorney or title company, not theirs - because I'll bet that theirs is a complete fabrication. That'll be the end of your $10K.

You say it's a "foreclosure home".  What does that mean?  Pre-foreclosure?  Actually foreclosed?

If it's pre-foreclosure, you might be on to something.  If it's already foreclosed and bank-owned, you can only buy it from the bank.

You don't say where the property is, but maybe do a Google street view and see what the neighborhood looks like.  Then do some searching to see what local values are.  If this property is in reasonably good shape and priced very low, that's another clue that it's a scam.

In other words, if the deal looks too good to be true, it probably is.

Proceed with extreme caution.

If the prior flood was caused by a water main break, that's one thing.  It's probably a once in a lifetime occurrence. But if you're buying in a flood zone, that's something else.  It could happen again tomorrow.

I'd look at the FEMA flood zone maps (https://msc.fema.gov/portal/ho...).  Anything other than a "Zone X" means that you're in a flood zone - and there are several different ratings.  

Being in a flood zone means that the property takes a hit in value, especially VE and AE.  The number following the rating, like the 10 in AE10 indicates that depth of the 100 year flood.

If it's in a flood zone and the foundation damage was due to a flood, I'd just walk away.  That's just too much risk for my taste, but YMMV.

It's a red flag.  You're here asking about it because you're concerned. 

When the time comes for you to sell it, you can expect those buyers to have the same concerns.  That means your property will be less marketable.

Whether it's a deal-breaker is up to you and up to your eventual buyers.  I can tell you that if I was looking at two similar properties with one in Zone X and the other in Zone AE, I'd take Zone X every time.

It depends entirely on what the contract says and why it was de-listed.  If it was a 4-month listing contract and 4 months have passed, the seller has no obligation to the Realtor - UNLESS - you saw it during the listing period. 

Depending on the language, it probably won't matter whether you saw it with the listing agent or not.

The listing agent most likely has a "tail" on the contract.  That says something like: "Following expiration or termination of the contract, if the property sells to any party who was introduced to it during the listing period, and buys it within X days/weeks/months, the full commission is due."

If it was de-listed at the seller's request but was still within the listing period, it is most likely still under contract and the seller will owe the Realtor commission.

I have than in business brokering.  If an interested party comes back after the listing expires and then buys it within X years, the full commission is due at closing."

You can see why these clauses are in place.  A dishonest seller talks to someone, say at an open house and that person wants to buy it.  They talk offline and strike a deal - and they decide to screw the Realtor by de-listing the house.  That buyer would not know about the house if it were not for the marketing efforts of the Realtor, so no matter how you cut it, whether by ethics or contract, that Realtor's commission is earned and due.

All that said, this is really the seller's problem.  You have no relationship with the Realtor.  The worst possible outcome is that the Realtor is going to come after the seller for commission.

As to Q2, please contact either a title company or closing attorney to get your contracts.  I wouldn't bet a $225,000 property on an office supply store's P&S.

It depends entirely on what your contract says. 

For all we know so far, it could expire in 3 years, with five 10-year options, meaning you could conceivably be tied up for 53 years!

What does your contract say about lease renewals?

He doesn't necessarily HAVE to, but put yourself in the buyer's shoes.  The seller says "all the utilities work.  You can trust me!"  That's not especially convincing.

On top of that, the lender will almost certainly (except for a construction loan) require that all major systems work before approving a loan.  Electrical, plumbing, HVAC, etc.

BTW, if you have natural gas and it's been turned off for a while (as determined by the local gas company), there will probably be a pressure test required to turn it back on.

One other item - around the time I got our of real estate, NAR put a rule in place that said off-market (pocket) listings were no longer allowed, unless you have a specific written agreement with the seller. Check with your broker if you're NAR members. As I recall, NAR required properties to be listed within 2-3 days.

One final point. Your seller will likely do better if you put the property on the open market, meaning MLS listing, open house events, promoted through your company website, etc. That's true even if the house is a rehabber's special.

Good luck!

You CAN get title insurance with a Quitclaim deed.  When I was licensed in Massachusetts (not too long ago), virtually every property conveyed with a QC deed and buyers routinely got title insurance that covered both them and the lender.

Whoever provides that insurance will run a title exam and it will have to meet their standards, but I assure you, QC deeds can be insured.

To be sure we're on the same page, a QC Deed transfers whatever interest the seller holds to the buyer.  It doesn't not guarantee a clear chain of title.

A warranty deed protects the buyer from prior clouds and defects.  I've only seen a SPECIAL Warranty deed in foreclosure sales.  That protects the buyer from defects that occured during the seller's ownership of the property.  In a foreclosure, the seller is typically the bank, so they're trying to shed liability. https://www.investopedia.com/t...

The bottom line is that you need someone - attorney or title company - to do a thorough title search and issue a policy that protects YOU and not just the lender.

Good luck!

You need estoppel certificates signed by the tenants ASAP - and assuming that your P&S made that a condition of the sale, you should refuse to close without them.