All Forum Posts by: Ralph S.

Had the same thing happen. Long story short, we had been watching this REO for about 5 months as it went under one contract after another. Each time the buyer would walk. Our offer was then accepted at what we figured was less than 70% of market. When the title search flopped, our second closing date slipped by. As we approached the third date, we actually visited the clerk who told us that they had received the deed from the lawyers, but the check for the filing fee was $3 short, and the lawyers, rather than just coming in and paying the $3, had retrieved the deed and taken it back. This happened before our first closing date, which was not what we were being told. Now, this house had been under contract (according to the listing agent) three times before us. It had been listed since August, and our second closing date was January 30th.
After politely listening to the closing attorney tell me that this was common with these bank attorneys, and that he had a number of closings pending for the same reason, and then scold me for personally getting involved and not letting them do their job and didn’t I know the bank had an out if they couldn’t prove title and I had no choice other than to extend closing or go away without my earnest money, I got a little pi**ed. My response was along the line of, we have a valid contract, the inability to perform a routine act on the part of the bank was not a get out of jail free card. No more extensions, nor would we simply go away, and he could expect to explain the difference between what had actually happened and what he’d been telling us and, and further explain his legal opinion of their rights in any action we might take to enforce the contract and claim damages.
Two days later we closed without the deed having been recorded. The banks attorneys forwarded the deed, the original check and three $1 bills to the closing attorney, and this satisfied the title company. The closing attorneys then filed both deeds after we closed.
Worked for me.

If he uses his contractors for the repairs he wants, then doesn't pay the contractors, the mechanics lien goes against the property. Sounds like a large liability without any control.

Would you really want someone else chosing what work gets done, by a contractor of their choice, at a price they agree to, that could end up as a lien against your property?

I don't see where this buyer has any skin in the game, while your exposure is tremendous!

I agree with the others who say :protest: and find another way, or ways, to sell the properties.

Depend upon the lender. Several methods could be used, and several different levels of appraisals are available.

Our duplexes were always appraised using a "Small Residential Income Property Appraisal Report" which primarily uses the income approach to valuation, but, also includes the cost and comparable approaches. Our SFR's on the other hand used a variety of forms, like "Qualitative Analysis" and "Uniform Residential Appraisal Report" and notes such items as whether it is a complete or limited appraisal, and other errata.

The lender has always ordered the appraisal and dictated which type of appraisal they want.

Vertical, and in the case you refer to, lateral integration goes on all the time.

Walk into any large real estate franchise (Remax, Coldwell Banker, Century 21, etc.) and you'll likely find they have their own mortgage, title and home insurance programs available. A recent article I read somewhere quoted an overly aggressive email from a Remax exec chastising agents that weren't steering buyers to their in-house programs.

Either occurs during the good times, aka bubble, when a profitable service or retail business wants a bigger piece of an industry pie, such as the (lateral integration) when Lowes and Home Depot expand from just selling windows to installing windows. Lowes has also done some apparent vertical integration with its Cobalt line of tools. In this case, it becomes its own supplier. Although, a better example of vertical integration would be when a paper recycler, a paper manufacturer who uses recycled paper, and a cardboard box maker who buys rolls of paper to make cardboard, are all owned by the same company.

The opposite also occurs during the not so good times. Haven't Chrysler and GM both recently divested their financing arms? Could have something to do with GMAC looking to diversify their services.

Someone who hires another, smarter than themselves, proves that's not the case.

or something like that.

I think your #1 is #1, and too often missing.

Landlord associations might also find a home on the list.

And, support of family and friends is #0, no matter the plan, or the team, if you can't get support at home.... :crazed:

I couldn't find a "beating head against wall" emoticon.

Bought a rental from a brother-in-law. He was retiring and selling off his rentals. He paid off a land contract long ago. We ordered Title Insurance and found that the guy he bought it from had never filed a satisfaction of mortgage. Previous seller/lien holder had also moved away to parts unknown. Took two months to track him down and several threats by our lawyer to get title squared away.

While ordering a title search would have shown the same thing, I always get the insurance. It's cheap protection, family or not.

Yee-Ouch! You could be buying a family heirloom first, an investment property second. And with heirlooms, all the sibling/family rivalries, claims of favoritism and perceived debt that go along with them. Here's wishing you have a very thick skin, your wife is an only child and she has very mature family members (her aunts, uncles and cousins who might also love to keep grandpa's or great-grandpa's property in the family). Good luck.

You probably posted in the wrong forum. This should be in the off-topic forum.

That said, I play FXI (NYSE) against FXP (AMEX).

Both are Exchange Traded Funds (ETF's) tied to the FTSE/Xinhua China 25 Index. As I recall, the China 25 are the 25 largest traded Chinese stocks that are allowed foreign investment (in this case, us).

Simply put, you would buy FXI if you think the market is going up, FXP if you think down.

FXI is the long play, FXP is an Ultra Short, which is to say it tries to double down on the index. So, if the index goes up 1%, FXI would be expected to go up 1% and FXP would be expected to go down 2%, and vice-versa. Since they are exchange traded, like a stock, they will fluctuate in price and are not precisely tied to the NAV of the index.

Highly volatile. Best to have a cast iron stomach when playing these two.

Your money, your risk. Good luck.

Beachbum - Mahalo.

You're so right, on so many things, but, I think you missed a relative point or two.

Hoo-ray! So refreshing to see someone doing their homework before diving right in. What seasoned REI couldn't finish this line, "If I knew then what I know now...." Your suggestions that other courses might benefit her more, and are all good thoughtful ones. Mine are slightly different but still much the same.

I don't think she'll be getting her broker's license anytime soon, and venturing forth with the naivety you warn against. I have a BS degree in Bus/RE (20+ years ago), with 18 years in Accounting and Finance roles for a large manufacturer. About 10 years ago begin investing in RE, and a few years ago, studied up and passed the agent and brokers exam, got my brokers license and after interviewing local offices, chose the one that I felt could and would help me the most. That's a priceless association that has helped me so much. All the things you warn about, and all very good, and will be there for Nooni, looking over her shoulder. And I can only hope she will find one as good as the one I found.

And, I am sorry if I have a slightly different view of the RE industry. While NAR does a lot of tremendous things as an association representing homeowners and promoting home ownership, and it's members are, I believe, temendous as a group (so don't think I'm negative overall, this is just one aspect relevant to this discussion), the admission fee to being an agent is relatively low. Are you 18? Yes. Are you a Felon? No. Here, take a course, any course, online, through distance education, at a RE office down the street, or at a junior college, buy this CD off the internet that will teach you the answers to the state test. Pass the class and the test, and viola, you, too, can be an agent. And the ongoing costs of NAR, state and local associations, MLS, CE, E&O, etc. is just the cost of doing business, and again, it's not very steep. I don't think I've ever spent anywhere near $2k/year on maintaining my license. This is why it's not like a cop, where you can't find one when you need one, and it's not like the attorney who represents himself, having a fool for a client, either. In the aspect acting as your own agent, nobody's going to look after my well being better than I am, especially if I look to and rely upon my broker. And, no relationship between a single agent and investor can, in my opinion and experience, compare to the resources and relationships that follow when an REI joins in as an agent.

Life evolves. I bought a HUD, did the sweat equity thing and learned much, especially how others can do a much better job than I, in much less time. I was a slow learner, tho, and did it again before I really learned the lesson. Still did ok on the investments, but, had I known then.... I also learned a lot about what it takes to do these things. Today, I hire out maint & repairs. You're own story is one of an REI getting a license and now doing PM. Sounds to me like you've done something very similar, yet say you can't imagine why anyone would?

Nooni's post points out a couple things. She's looking before leaping, she's learning and asking questions. Inexperienced, yes, to be warned about things she doesn't yet know or understand, yes. There are many things she can do, in many different orders, that would help. But, to address her question

I say the pros far outweigh the cons. It's not a big commitment in time or resources. Getting licensed is not a destination, it's only one step that makes you better, opens doors to resources you no longer have to rely on others for, and puts you in a community of others, much like joining any trade association, that can really help you do and be better.

That's very true. I did what you're thinking about and there are a lot of bennies. I got licensed and kept my day job, working for myself, family and friends (no self marketing, promoting, etc.).

I haven't regretted it at all. As an investor, every percent you get and someone else doesn't helps.

Not really. Be upfront and disclose you're a licensed agent when required. When you buy or sell properties for yourself, that needs to be disclosed.

Not unless our MLS is behind the times. These are City/County Clerk items. You may find two things locally of importance. The MLS might be behind somewhat in tax and owner data, as they get periodic updates from the Assessors Office on sales, so it is better to check with the Assessor directly. Either through the city or county website. Many offer property assessment searches, which can tell you alot about a property. The other is the city or county clerk's office. While not free, many clerks offer documents over the internet, either for a subscription or by the document. You can search by property id and essentially do your own title search. Some include pdf's of certified plats and other docs as well as transfers, liens, etc. The only type of payment history you might be able to find are the tax payments on the property tax. Our Assessors show the taxes owed, outstanding balances, etc.

Good Luck!

Like Wheatie said, no stopping the tax man.

The amount you pay taxes on, very simply put, is how much did you net, after selling, less the amount you spent, or invested.

If you paid $100k and invested $20k, for a total investment is $120k, and if sold for $150k, then you made $30k and that is what you'll pay taxes on. Again, this is a very simple example.

Doesn't matter how much was financed, how, or when you put money in your pocket.