1 free home, sued 2 banks, 14 months, no credit or money; $83K!!!

[Carl Childers]

Hello investor community,

Setup the story

I wanted to share this story in the hopes it can inspire someone to just get started. Here is a story that I couldnt make up if I wanted. 14 months ago I had to figure out what to do to make more money. I have been an actor and producer for the last 12 years and it is a tough nut to crack to support a family. Anyhow, I used to wholesale from 2000-2007...I did pretty well for a while.

The birth of a daugher, the collapse of the markets, and my stuff getting caught up in it kicked me out of the industry for over a decade. 14 months ago I decided to get back in. I called an old friend of mine and told her "I am back in real estate. I want to wholesale and build up a company to fix and flip and eventually get into storage facilities'. Her reply? "awesome...I am glad you are back"...we spoke for a while and hung up.

TELL THE UNIVERSE AND FRIENDS WHAT YOU DO...TELL ANYONE THAT WILL LISTEN

I told the Universe I was back. I stuck my flag in the ground and staked my claim. Well....48 hours later she called me back...we will call her "A". "A" said..."I have an old family friend that has a house she needs help with. It has caused her much stress and I dont have time to do it. And oh, she is going to give it to you. Free. She doesnt want anything except for it to go away". 

FREE CONTRACT

Ok...Well...that was a price I could afford for sure! I almost could not believe what she was saying and of course I was waiting for the caveat. Well...I got that caveat soon enough. I asked the owner if there was a mortgage on the house and if so what it was. She said "I dont know. I walked away from the house 10 years ago and its just sat there since then".     

WOW. Ok...how does someone walk away from a home for 10 years with a mortgage on it but still owne it?! She had not paid on the loan for many years yet the tax records showed her as the owner. Most taxes were paid up minus a few years. All she knew was that she continued to get the taxes and she paid them. She was scared to do otherwise. For years it sat vacant and boarded.

I know, I know...now I would pull title myself and see it but at the time I didnt do that. I had been away for a long time and just didnt do it. Maybe I was HOPING (not a strategy) but I pretty quickly got a contract on the house. You see...I know what the ARV is, I know the rehab estimates, I know the area well, and the home was in an Opportunity Zone in Atlanta and so any home around there is "desirable". And, as such, I knew what I could ask...I didnt know about a payoff though...I was going on a fishing expedition!

When we got the contract and my closing atty pulled title he called me and said that CITIC Bank is showing up on title but they cannot get a payoff. He asked me to help and try. I called CITIC many times with all of her information and it at first said that the house was paid off 4 years prior. That is 6-7 years after she walked away. "Paid off" but no "payoff". Hmmmmm.....

So, "CITIC" carried this non performing asset for many years like it was a performing asset and then an event happened. We were stuck in eternal loops on phones and systems with no answers. It was the same thing and then the message changed. The message now indicated that this asset was assigned to another big bank...we will call it "USA Bank". OK...great...we could finally get an answer...we might be dead int he water but at least we would know.

We called  Bank now to get a payoff and they claimed they didnt own it, never did, and never had a client with her SS# and that we needed to go back to where we came from...CITIC (fake bank name).

BUYER SPLITS

At this time the buyer backed out, I returned his earnest money and sat there for a moment. I needed to do a quiet title. However, I couldnt do one because I didnt own the home...I wasnt on the tax records. When I told "A" she said..."I will call you back. When she called back she said her friend would officially give me the home for free. She would sign it over if I just made it go away. She was an older lady and this caused many years of stress, of worry, or wondering if someone was going to pound on her door. 

MEETING IN A PARKING DECK...WOMAN GIVES ME A HOME FOR FREE

The next week I got my attornery, myself, and "A" and the owner and we met in a parking garage. It was something out of a spy movie. She signed a quit claim deed over to me and then left. The home and the PROBLEM was now mine. You see...one person's problem is another person's opportunity. That is....if you can stay out of your own way, out of your own head, and not listen to all the people whom say it cant be done. 

We filed the deed and I became owner of record. That took weeks to show up...6 weeks...but when it did and becuase of where it was my phone started going BING BING BING. It was Virtual Assistant after Virtual Assistant...I talked to so many people and answered the same questions over and over and guess how many people called me back from all those calls...which I think was 60-80....about 3.

Side Note in Virtual Assistants:

Quick Point...if you have a VA then train them. Teach them something about real estate. And, look at your own process because many people missed out because their system was broke or something. I dont know...but I got to see the side of the owner and it was annoying after a while....but I was trying to sell so I was OK. Seriously, the VAs were busy and then NOTHING.

Quiet Title:

After that day I set out to find an attorney to discuss suing the two big banks to see if they would release the title AND to see how much that might be. I might remind you...I am into this for nothing at this point but that was about to change. Attorneys and suing big banks doesnt happen for free. In an odd situation it took me almost 3 months to find an atty that could handle this, that would return my call, and that would give me a quote. Well...the minimum quoted was $5000 and the sky is the limit from there...nobody knows. 

NO MONEY? NO PROBLEM (YEAH RIGHT)

I had no money. Zero. I had bad credit. I left and tried to figure it out. I thought....the Universe, God, god, or the mighty energy gave me this house because I said "I am back and I have no money but I am still doing this". I actually said that out loud. Now...this was an incredible and an almost immediate response but now it just dies because I have no money or credit? Well...a few weeks go by and I am telling a very good friend about this. We leave and later on that night he calls me and says "What if I let you borrow the $5000 to get started". I said "no thanks man" and we talked and he said if I changed my mind to let him know. So...we hung up.

I didnt sleep that night...the next day I called him and said..." I will take the $5000 loan and will promise to repay it and a 20% ROI if you give me 1 year to repay it". He accepted after arguing that 20% was too much. I told him I would repay regardless of the outcome. So...that day I got a cashiers check and opened up a business account with it. They held it for 8 days of course.

THE LAWSUIT IS ON!

At the end of the wait I drove a certified funds check to the atty office, signed the contract, and we were started. Retianer paid...I waited. 30 days...60 days....it took almost 75 days to get the papers filled out for the attys to do their research...to bill me twice...and for us to file the suit. I was officially suing and serving notice to CITI and US Banks with little money and no credit. All I had was the opportunity and the need to take care of my family. It had to work or I would die trying...

WHAT DO YOU GET WHEN DEALING WITH ATTYS, GOV, OVER THE HOLIDAYS? NOTHING!

Things were quiet for a long time because it was the end of the year...GOV...holidays...closed offices....and after the first of the year I got a call that CITI attornerys called...you see... I was out of retainer fees...I didnt have money to pay more bills....I had prayer...I had a team...I had an asset...and I had a weird scenario that I was sure the banks didnt want to explain. However, I also knew I could be waking the sleeping giant. The giant could easily say...oh...we had an oversight and we are foreclosing on the home or the owner has to pay us $150,000 in late fees! 

THE MIRACLE

What they said was...."If your client will drop this case immediately we will drop the liens, with prejudice". I was stunned...I asked my atty what that meant...."you won. you sued two of the biggest banks and they flinced. I have never seen anything like it. 'David beats 2 goliaths". 

THE WAIT

I had to wait for the paperwork to be filed...that was another 45 days...this took us smack dab into the pandemic of 2020. I had to navigate a closed down government, a world pandemic, children home from schools, wife home from work, and the waiting of this....and waiting to get final attorney bills...it was brutal. The win felt empty.

In early March I got a call...my attorney had the final paperwork. It was filed, stamPed, official, and he was lodging it in the system. Goliath 1 & 2 were dead. Slain by me, my attorney, my friend's $5 000, "A" whom hooked me up...and the little old lady whom could now live in peace. WE WERE LIKE THE MOST UNLIKELY TEAM.

PANDEMIC DELAYS

I got the paperwork back during the pandemic. I could now sell the home. I owned it free and clear and clean title. The phones stopped, emails stopped, the world was staring at itself in the mirror and was frozen. 2 months went by...I got a contract...it fell through beause the people were new wholesalers...they fumbled around and I let them...I had a soft spot for wholesalers but this woke me up!!!

June came and a year had passed since I first called "A" and told her and the Universe I was in the game. I got another contract...I gave a 3 day diligence period....that bounced out becuase they were trying to flip it...they had systems in place and were no issue dealing with.

THERE WILL BE CALLS. FALSE STARTS. FAILED CONTRACTS. MULTIPLE BUYERS. HARD MONEY DELAYS. APPRAISAL DELAYS. 

July came...I had spoekn with 200 callers since I first got this home...I was back...I was awake...I was much more experienced...I got the thrid and final buyer but even that was a little tricky. So...at first it was cryptic texts. I didnt take it serious...he was coming across as another HACK...a week of this back and forth and then....we went to contract. I gave a 17 day contract...I got his earnest money...as much as I could to make it hurt. I needed to close. 

We get to the 16th day and I get a call...the buyer tells me that his hard money lender just said they JUST got the appraisal back and needed 48 hours in underwriting...I sat there and breathed....I said I needed to speak with the lender. I subsequently called the lender to speak with them. Because of COVID their vendor had slowed way down and he confirmed that the delay was no fault of the client. He said we could close the following Tuesday "at the latest". I hang up the phone and tell the buyer...I will give you until end of day Wednesday...I gave the lender one day longer because something was telling me.

AND THEN....

ON the following Monday I get a frantic call from the buyer....underwriting is kicking out the deal...he is flipping the contract to a copany that he is part owner in and they wont allow it. Ummm....at this point I wanted to explode...but I breathed deep and said "of course you cannot use the banks money to pay you a commission for actually buying the home. That is fraud"! 

He explained that he is part of the company he was flipping it to because that investor was new and was trying to rehab his first home. He agreed to work with him so that this buyer could "borrow" his experience to get going. So, he was really wholesaling it BUT he was also a part of the company". I get it...BUT...I cant pay a buyer to buy my home...PERIOD. So, I suggested that he just ride along and wait to get his money until later. We redo the contract, I give him a break although his current contract #2 is set to expire in 48 hours.

PATIENCE IS GONE. JUST FOLLOW THE CONTRACT.

We get to 5PM on Weednesday and I get a text "clear to close tomorrow at 4PM". At this point I need to get everyone to the table but my confidence in them is shaken and at this point I am out of generocity. I am not UNICEF. I reply..."a 1 day contract will cost you $1000". 

Now, its Thursday....14 months after I got it....after i slay two big banks with other people's money...after I navigate GOV over holidays, Pandemics, and 3 buyers and the 3rd buyer is in his 3rd contract. 

I call the atty to verify I am on the closing schedule. It is. I am. They got the clear from the lender. OK. But...we are out of contract and at this point I know we can do one at the table. I try and call the buyer over and over and no answer. I send an email that says "we need a new contract or updated one and the eanrest money".

I am 5 minutes from the closing and the lender calls me and says "the buyer called and said you upped the price of the home. If that is the case we are not closing". I exlained that we are on our 3rd contract, I have been more than patient, I only said that the buyer needs to pay for this with more earnest money just in case we dont close. I also said the magic words...MY COMMENTS TO HOM HAS NO NEARING ON YOUR UNDERWRITING. I SAW THE HUD AND I AM GOOD TO GO". He said he would send the money.

I get to the closing, I get him to sign the new contract addendum, gives me the money, we close but it is 5:15 PM and bank is closed. I have to wait 1 more day for the wire.

DONE DEAL.

In the afternoon I get my wire....$83,393.38 was wired into my account. It was finished.

RECAP

No credit

No money

given a home

sued 2 of the US biggest banks

won

holidays, and gov navigated

pandemic

3 buyers

3 contracts with the third buyer

Paid back the loan I took. Gave the little old lady/previous owner some money/split the rest with my partner "A" whom gave me the opportunity/paid of bills/repairing credit (hired some pros)/and here we are. 

Takeaways are you need a team, systems make things easier, tell people what you do, money and credit helps but if you dont have them then borrow them, be thankful, be courteous, give back.

IT IS TRUE THAT YOU CAN DO DEALS WITHOUT MONEY, CREDIT, OR AN ASSET TO START....BUT YOU BETTER CREATE YOUR OWN LUCK BY WORKING YOUR TAIL OFF...NEVER STOPPING...GETTING A TEAM TOGTHER...SYSTEMS TOO...

Signed...

A thankful person.