Wholesale MLS Properties using TIC

[Robin Wilk]

@Bill Gulley Hey Bill I'm curious if it's possible to wholesale properties on the MLS (Older listings like 90+ days and older) using the TIC, TAC, TOE method? Your thoughts are greatly appreciated.

[Bill Gulley]

Robin, that was very good, except toward the end so I'll clear that up. The TIC Agreement is the only agreement you need for the right to buy more interests in the property. There is no double closing as you can sell directly to any new buyer with others in title or by using a Specific Durable Power of Attorney (SDPOA) from other title holders. The SDPOA is best attached to the TIC Agreement, as it will need to be presented at closing (or before actually).

As to the MLS, well, that will be tough because of a listing agent and for a TIC you'd write a book in your offer or you'll really need to present everything to the owner(s) and their agent, it's not something the public or agents are well aware of.

However, it is easier off the MLS when or if you know that problems exist like divorce, death and estates, partnership break ups or property condition is not marketable.

When you have joint sellers and they have issues, you usually can solve one of the seller's needs, then you can force (convince) the other to cooperate because that seller has no personal involvement with you. They then realize that the sale is going to happen one way or another and it becomes all business without the personal baggage attached. 

Being creative in a transaction with MLS properties usually has an initial bump in the road, the listing agent! Two things that agent wants to see, first do they get paid, secondly is the deal in their client's best interest under the circumstances.

My most interesting TIC deal involved 7 properties through a listing agent. The agent had a real mess and she came to me to solve the problem. I purchased some properties in whole others I purchased the undivided one half interest, all on a seller financed note, so I didn't have a dime in it except for filing fees. It was the funniest deal I was ever involved with, the two disagreeing owners were gay partners and they split the sheets. I bought buy interests then contact my new partner, she was outraged and called her attorney (also gay) (the gay part ends to a punch line).

The attorney recognized what I had done and she bought her client's interests in the same manner. The attorney then contacted me, the fun began.

They attorney ranted her stuff, we will sue, I'll do this or that, when she was done rattling her sabers I suggested we go look at what we bought and she agreed.

A highly desirable area about 4 miles out east of town along a river, park like with large trees and a view of nothing but pasture across the river. 2 houses, 3 cabins an A frame, professional tennis court, large barn, corral and a pond. 

We looked at each property, the attorney is still rattling her sabers and we got to the last house. In the last house there was a large picture window looking over the river valley, beautiful setting. The attorney the said, "I think I'll move into this house myself" I just looked at her and said "I hope you sleep on the left side of the bed because I sleep on the right!" (Remember, she is gay)

She realized she wasn't going to scare me away and control this mess.

She then looked at me and said "well, I think we have to work this out don't you?) Yes was my reply. From then on we worked together!

We did a minor subdivision, cleared title with new legal descriptions (my doings) and had buyers for the other properties in about 30 days. The sale of the newly described properties paid the debts for both the attorney and myself. 

I "netted out" the 2 story A frame about 10 feet above and away from the river, the barn, corral, tennis court and half the pond with water rights and about a 4 acre pasture at the end of the property along the river that the last house mentioned looked over. The attorney netted out a 600 sq ft cabin. I clearly won!

I just used the place as a second home retreat, great place for canoe trips, guests and BBQ's. I sold it all about 10 years later, six figures :) Not my biggest money deal but it was the most fun!

So, how do you buy off the MLS, very selectively.

What brought me this deal was my reputation, the word on the street was, if you have a problem go see Bill Gulley!

Tenants In Common is a powerful tool, it's easy to operate but you need to learn how to use it and when to use it.  

This is more advanced than basic real estate, folks really need to learn the basics before they can 1. have the confidence to present deals by understanding the basics 2. recognize values accurately and how value is changed, 3. knowing title rights, 4.  knowing the role of agents and settlement requirements.......all basic stuff!

The TIC Agreement may incorporate any strategy, a net deal like I described, some can relate it to wholesaling but I was in title. You can have rights to purchase, rights to repair, to manage and/or sell.

I'll address Dodd-Frank issues; It covers consumer financing, not commercial financing. A homeowner selling their residence will be exempt, not so much for investors selling to an occupant buyer. A financing agreement requires a security interest held by the lender, in a TIC Agreement there is no security agreement required, you can simply have the right to repurchase on a buy out. Financing between related parties is generally exempt from finance laws, family, business partners or joint owners are related parties especially on small transactions.

Hope you didn't run out of popcorn! :)