Subto Blows Up

[Account Closed]

I was brought in to consult with an investor in Florida, who is buying a nice property in Washington using Subject To, on a property he found through a wholesaler in Texas who found it on the MLS.

Now, it's his first attempt, so I'm being gentle, because he's doing several things wrong out of the gate. 1. He's buying off the MLS. 2. He's paying too much. 3. He's using a wholesaler.

But, he gets credit for taking action and finding a seller willing to sell on creative finance. 

So far he's negotiated a Subto, with a substantial amount of money to the seller at closing and with a large carryback. After we spend three weeks of going back and fourth changing terms and figuring out what works for both parties, the seller reveals he has a substantial state tax lien and wants to back out of the deal. The seller knew about the tax lien all the time and was trying to close before it hit the title report without letting the buyer know. 

[Caroline Gerardo]

DIY lis pendens after emailing broker? Licensee has higher standard to tell the truth. Ask for money to bow out of the deal. Pants on fire made up a fantasy about income, fully knew about tax lien for a year or more. Ask for $25000 for the defrauding. After he balks (which he will) put name up public and make a complaint to licensing board. Get copy of the tax lien it has the income year noted, I assume he never filed taxes. Get copy of email he sent about rents vs the Airbnb or VRBO listing and income stats. Have your paperwork ready. Don't sign a cancellation, get broker on email trail.