Don’t count your chickens before they hatch… I mean Houses

[Joe S.]

The old saying is don’t count your chickens before they hatch. About 3 weeks ago I got four contracts to purchase houses in about a five day time span. I know that’s small fry for some people, but that was the whole happy meal for me. Well so far due to title issues it appears that two of the deals are going to fall through on the seller side. I’m hoping one or two of the four will close. This goes to show that a contract is not the same as a purchase. Transactions fall out of escrow and that is something that an investor has to get used to. 

[Joe S.]

Originally posted by @Account Closed:

Originally posted by @Joe S.:

Originally posted by @Account Closed:

Originally posted by @Joe S.:

The old saying is don’t count your chickens before they hatch. About 3 weeks ago I got four contracts to purchase houses in about a five day time span. I know that’s small fry for some people, but that was the whole happy meal for me. Well so far due to title issues it appears that two of the deals are going to fall through on the seller side. I’m hoping one or two of the four will close. This goes to show that a contract is not the same as a purchase. Transactions fall out of escrow and that is something that an investor has to get used to. 

Joe, what are the title issues? Maybe I can point a direction. Congrats on being so industrious.

One of the properties it ended up where there were flaws in the chain of title due to incorrect or no probating.

The second one had approximate $40,000 judgment which I haven’t gotten excessively involved trying to figure out. The title company referenced the judgment without going into detail. I got the idea the sellers were going to simply sit tight because there was no need of selling if they did not get anything from it. Once I pay off the underlined loan as well as the judgment it just was not worth their time from what I gathered. 

Have you considered doing a "quiet title" on the first? Do you have access to at least one person who might have been on chain of title? I bought a non-probated property and had to learn a few things about clearing title. Quiet title was one option. 

On the second, depending on how old the judgment is, you can likely buy the judgment for 10% and take over the judgment. That's a fairly common way of settling that kind of debt. There is a process but it can be done. 

I always figure ARV, subtract the 1st, subtract "moving money" for the seller and then see where I need to settle on the judgment. If the numbers work, I look to see how old the judgment is (the older the better) and put an offer in writing to the creditor. Usually If it's a private company, they will work with you. I've successfully negotiated with banks, IRS, medical, HELOCS. I've been unsuccessful with reverse mortagages, utilities and fresh judgments. Their counter offer isn't always their "best" counter offer. There is room to negotiate.

Then if all works out, I take over the 1st Subject To, pay the judgment & give the sellers moving money through escrow,
and it's done. Since it's a bit of work to do these I usually require a Subject To to make it worth my time.  

 

Good insight. Thank you very much. 😁