All Forum Posts by: Ryan Fox

@Alex Peters- Following this thread for additional ideas, but here are my thoughts:

check bank account statements to make sure they have adequate reserves

check court records to assess litigation activity - both for the business entity and its principals

business credit report

Do they have experience with other properties in Joshua Tree?  Check title records to see if they actually own those properties or have a lease for arbitraging.

Use the California Secretary of State's business lookup feature to see if they are in good standing.  Do the same thing for any entity / entities that own the business entity.  Sometimes they're suspended for not paying taxes or other reasons.  

Agree to a lease that allows you to cancel the lease with minimal notice the moment anything goes wrong.

Ask for references and contact them

Side note: make sure you can actually get insurance to cover you under this scenario before agreeing to it.

@Dean Ng- Referrals are usually a good way.  Go to a local real estate meetup and ask other investors who they've used.  

@Shireen Y. - I'm assuming your not the owner of the property and you're bidding to buy it.  The Code of Civil Procedure does not define "right of redemption," so we don't know if CCP 729.090 applies to the 45-day right of redemption offered pursuant to CCP 29224m or the 90-day right of redemption offered by Civil Code 5715.  It would be safest to assume that the 90-day right of redemption applies and CCP 729.090 serves as a limit on your right to entry to the property.  

However, there's one case that says you're allowed to enter the property, change the locks, and renovate it if the property is vacant and uninhabitable to begin with. (Barry v. OC Residential Properties, LLC (2011) 194 Cal.App.4th 861, 868-869.)

Are there more cases that explain this better?  Possibly, but not that I can find without doing a lot more research.  

@Shireen Y.- Yeah so Civil Code section 5715 applies to a situation where the homeowner is trying to pay off the debt to the HOA and redeem his / her interest in the property.

SB1079 is codified at Civil Code section 2924m.  That code section, as you point out, allows a "prospective owner-occupant" to become owner if they submit a higher bid within 45 days after the sale.  There's nothing preventing the former owner from qualifying as the prospective owner-occupant as long as they meet the strict guidelines for being a prospective owner-occupant as set forth in Civil Code 2924m(a)(1).  That code section states:

(1) “Prospective owner-occupant” means a natural person who presents to the trustee an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, that:
(A) They will occupy the property as their primary residence within 60 days of the trustee's deed being recorded.
(B) They will maintain their occupancy for at least one year.
(C) They are not any of the following:
(i) The mortgagor or trustor.
(ii) The child, spouse, or parent of the mortgagor or trustor.
(iii) The grantor of a living trust that was named in the title to the property when the notice of default was recorded.
(iv) An employee, officer, or member of the mortgagor or trustor.
(v) A person with an ownership interest in the mortgagor, unless the mortgagor is a publicly traded company.
(D) They are not acting as the agent of any other person or entity in purchasing the real property.

@Greg Lovern Seller financing works just like bank financing.  The buyer would pay you prepaid interest through the end of August.  Their next payment would be due October 1st.

@Tatum Kantor- Investing OOS has been a lot easier on my schedule than trying to do something local.  Once you start making offers, the whole process of underwriting then offering is time-consuming enough.  It also seems to interrupt the day as well because good deals go fast.  

And then if you're going to do the rehab process and hire the contractor, draft the scope of work, be available at any time during the day to deal with hiccups, that gets really time consuming. You can do BRRRR deals without getting into any of these rehab complications. It's a matter of hiring a team that will handle it for you and where the numbers would generally work for what you want to accomplish.

@Jason Leigh - Write them a letter explaining their shortcomings, as recommended above, but point out specifics in their management agreement that they did not comply with.  Were they supposed to provide you monthly statements and did not do so?  Are they seeking to charge you for items that would have required your approval in the first place?  Were they actually marketing the property through Zillow / Trulia, ect?  Good luck!

@Chrissy Gray - Sounds like the father has the most to lose.  If he doesn't submit his proof of claim in the bankruptcy, he stands to lose the entire amount he lent, less the amount he was re-paid.  

The BK trustee will have rights to the 1/3 of the land owned by the son.  He can try to find a real estate agent to sell that 1/3 portion, but it would probably be beneficial to all 3 of you to let the agent sell the whole tract.  Selling just 1/3 isn't very marketable.  

Maybe you guys bought this property way under market and it's worth more?  Hoping that's the case.  

@Curtis Baker- The key is, what can all the owners agree upon?  I've seen family disagreements lead to litigation and it's ugly and no one wins.  Even if you take a loss on your investment by getting out, it's probably better to part on good terms than having to lawyer-up.  

@Chrissy Gray- It sounds like the attorney is setting the father up for failure.   Are the father and son on bad terms?  Whenever someone files for bankruptcy, there is an automatic stay of all legal proceedings against that person.  This would include any attempt to foreclose on the property.  There are stiff penalties for violating the automatic stay.  It sounds like the attorney may be trying to get the father to start the foreclosure, then get sanctions against him for doing so.  After that, the attorney can get the father to settle by releasing any interest he has in the property.  

The proper way for the father to assert his interest in the property is to file a proof of claim in the bankruptcy.  There may be other things he can do depending on the facts.  This, of course, is not what the attorney wants, as he wants to reduce the number of creditors at issue so that his client can exit bankruptcy with no debts or keep some assets.