All Forum Posts by: Steve Babiak

A PA attorney related a case of his; here is some background. In PA we have some interesting rules on recording order; I have copy-n-pasted here:
Title 42 Pa.C.S.A. Judiciary and Judicial Procedure
Part VII. Civil Actions and Proceedings
Chapter 81. Judgments and Other Liens
Subchapter C. Priority of Liens
42 Pa.C.S.A. § 8141
§ 8141. Time from which liens have priority
Liens against real property shall have priority over each other on the following basis:

(1) Purchase money mortgages, from the time they are delivered to the mortgagee, if they are recorded within ten days after their date; otherwise, from the time they are left for record. A mortgage is a "purchase money mortgage" to the extent that it is:

(i) taken by the seller of the mortgaged property to secure the payment of all or part of the purchase price; or

(ii) taken by a mortgagee other than the seller to secure the repayment of money actually advanced by such person to or on behalf of the mortgagor at the time the mortgagor acquires title to the property and used by the mortgagor at that time to pay all or part of the purchase price, except that a mortgage other than to the seller of the property shall not be a purchase money mortgage within the meaning of this section unless expressly stated so to be.

(2) Other mortgages and defeasible deeds in the nature of mortgages, from the time they are left for record.

(3) Verdicts for a specific sum of money, from the time they are recorded by the court.

(4) Adverse judgments and other orders, from the time they are rendered.

(5) Amicable judgments, from the time the instruments on which they are entered are left for entry.

(6) Writs which when issued and indexed by the office of the clerk of the court of common pleas create liens against real property, from the time they are issued.

(7) Other instruments which when entered or filed and indexed in the office of the clerk of the court of common pleas create liens against real property, from the time they are left for entry or filing.

OK, now that you get totally confused by that, check the line beginning at "(1)" - notice that there is a ten day requirement for the recording to be done in PA. Well, in this attorney's case, there were both first and second purchase money mortgages taken out on the same day, but the recording did not happen in ten days time. And when the county recorder got the instruments, the lower dollar amount mortgage was recorded first in the recorder's book. That made it the first mortgage in priority, an inverse of what one would expect.

So, maybe you are seeing a bigger dollar mortgage and assuming it is first, but maybe there is something in your state similar to the recording rules that I just presented. Maybe the bigger loan actually came in second!

I have to hand it to RIch on his post also (and voted it a plus too). Figuring out how to lower tax burdens is a topic worthy of heavy discussion. Not intending to hijack this thread, but maybe Rich can start another one where he helps to enlighten us on how we can legally lower our tax obligations.

Originally posted by Stephen Hare:

My past work experience is construction so I would do all the work myself counting only for materials. It doesn't really need a lot of work on it. Mostly cosmetic.

...

My plan was to wholesale it based on the discount I'm getting and the fact that I have no cash to finance a property. If I could find a way to finance it and afford my current rent payment I would fix it up and rent it out. But again, I need to build myself up some cash and work on repairing my credit.

My take on those two quoted paragraphs is that they contradict each other. If repair cost is estimated based on the "wholesaler" doing the labor (see first paragraph), then that "wholesaler" had better volunteer for supplying the free labor to the end buyer he wholesales it to.

Can't be doing both of "work on repairing credit to buy" and planning to do work by swinging a hammer (on that house that he can't afford to buy).

More that I just received:

At this price, we're practically giving it away...

100% Iron-Clad, Money-Back GUARANTEE

Here's a blog link where the comments offer some explanations on the guru mindset and operations:
http://realestate.bryanellis.com/1167/why-i-wont-participate-in-product-launches-with-the-gurus/

The "2% rule" says that the purchase price (including repairs into the purchase price) should be less than 50 times the total monthly rent. Sounds like you meet that rule with this one.

MikeOH mentioned children's paintings on the walls, but those are no comparison to the graffitti that is produced by college students in their hazy drunken stupors.

As for how to deal with personal situations that tenants get into, you will have to recognize that your business of rental properties will only be able to house tenants if it continues to receive cash flow. You will learn that the lease is a written set of rules that are to be followed by both landlord and tenant; if the tenant does not follow the rules in the lease, then the landlord must act in accordance with the same set of rules in that lease. No pay = no stay. Simple.

I have the application form request current and PREVIOUS landlords. Then you check with the previous landlord to see what the real story is. The current landlord might be hoping to get rid of this tenant, so getting a good referral from them is nothing useful. The previous landlord is already done with this person, so you can ask if they would be willing to rent to that person once again.

Agreed (and voted a plus on that). I know I try to help the mods by hitting the "report abuse" when a post warrants, and I hope that all would do so as well to help make the moderating task easier.

Often you will find that the pet urine and smells have penetrated into the wood flooring. At my local REIA, a guy recommended using a product called Odor X-it in accordance with the product instructions, and then to apply an oil-based sealer.

If you are in pre-foreclosure contact with the defaulted borrower (where that is legal to do), you may find that offering them suggestions to "help save the house" and "avoid the auction" can get you inside the property to do an inspection.

I was at a training event this past weekend, trainer was a PA licensed real estate attorney, and he told how he has a client who is an exterminator by profession. This exterminator buys at sheriff sale auction (that's the lingo in PA). He gains entry into the property by explaining to the property occupants that he has been called to this neighborhood to handle exterminations, and is willing to give their house a FREE treatment in exchange for placement of his sign on the premises. Trainer said it never fails, and as an exterminator you have to get into all parts of the property, so inspections can be thoroughly done by him. Another attendee commented that he probably only had water in the can rather than chemicals (a little humor helps in these training events).

But it is possible - you just have to be a little creative. And I personally have been inside before auction using the "save your house" approach. But I have also been told by others of their failed attempts to see the inside first, so YMMV.