Cleveland Ohio, Point of Sale requirements & wholesaling

[L. L.]

Hi everyone on Bigger Pockets. I have a question for those who have been purchasing properties in the Cleveland market for a while via both on the MLS and through wholesalers. I understand the Cleveland market has Point of Sale requirements which require a buyer to deposit Rehab Funds into an escrow account for distressed properties prior to closing on a deal. This has been a road block for me in the past as I have had trouble looking for hard money lenders that would loan below 50k on as-is properties, work with "upside down" properties, as well as loan the extra POS requirements. When I first started looking in Cleveland I thought my 45k would have been enough to start working with hard money lenders in that market. I have recently considered purchasing through wholesalers as a means to bypass the POS requirements. Im currently thinking that a Title Company is more likely not going to require POS deposits which would allow me to make a purchase and notify the specific city after purchase. At that time I dont think the city can still require a new property owner to deposit funds after a purchase has already been made. This would allow me to rehab without POS requirements. These are just my thoughts and I would love for those with experience to share there advice on this matter. Is this a good idea, or risky? Any sincere input would be greatly appreciated. thanks!

[Andrew Weiner]

The title companies will not transfer title without the go ahead from the city for POS.  Wholesale deals still go through title so it doesn’t get around the issue.