All Forum Posts by: Account Closed

Quote from @Peter Mckernan:

Usually, the city website has all the utility companies for the city that you should be contacting. If you went directly to the agent listing the property then ask them, and if not then ask the agent that represented you for the sale to get you the contacts for it. 

I’m not so concerned with how to turn them on, it’s more what immediate issues may I encounter when doing so and how can I mitigate them. My straight forward thinking is, when water is turned on (slowly) I’ll pressurize all plumbing then open and clear out faucets, etc. Once everything is on then off, I’ll make sure the water meter isn’t running. For gas, obviously smell for it. Electric, I have no idea…

I don’t want to turn on the utilities, leave for the night and the place is either burned to the ground or flood. I’m just trying to play it as safe as possible considering it’s been vacant for so long and I have no idea the condition in which the previous owner left things. 

Are there any tips, tricks, or guides for turning on utilities after close of escrow and possession? This particular property (townhouse) has been bank-owned and vacant for the last 14 months. I am assuming all utilities were turned off. For water, is it best to hire a plumber to come out, turn on, and assess? I've read a few guides about turning the main on gradually, going fixture to fixture one at a time, etc. Once everything is pressurized, check the meter to see if it's running. I'm unsure how to handle the water heater. Commonly it's gas.

What about electric and gas? The utility will turn on both. I'm assuming they would sniff for gas leaks once turning that meter on?

I'd prefer to play it as safe as possible. Do folks here just let their contractor handle it?

Thanks!

Quote from @Mitch Messer:

Quote from @Account Closed:

Quote from @Mitch Messer:

Quote from @Pat Arneson:

I've read a few old posts regarding this topic and have those documents in order, but I still have the following questions regarding a private loan (from family) --

Loan Documents for Purchase -

1. We have the promissory note, personal guaranty, and deed of trust(title/escrow to handle) ready to go. Does the promissory note and personal guaranty go to title or should I execute these outside of escrow?

2. Does my lender need to provide escrow instructions or anything along those lines? Can he just wire the funds to escrow, I sign the deed of trust, and that's that? Or, do he need to send some type of escrow instructions that outline 1st position, will fund after all docs signed, etc?

Loan Documents for Selling

1. What will this same lender need to provide title and escrow when I sell the property? Is it just a payoff demand and wiring instructions?

Thanks! This forum has been extremely helpful.

Hey Pat, regarding your docs for buying:

1. The promissory note and personal guaranty are private documents that don't get recorded. That said, I would still recommend you have them executed at closing by your closing agent, along with the other docs. I also recommend you provide two sets for signature, so that both borrower and lender get signed originals.

2. Your lender just needs to wire adequate funds to close. If there are other liens to be recorded, you should have already agreed as to the lien position this lender will be in, and the closing agent should know it.

3. Also at closing: You should provide your lender with a lender's title insurance policy, separate from your owner's title insurance policy. I recommend you as the borrower pay for this.

4. Also at closing: You should provide proof that the lender is named as such on a valid hazard insurance policy effective at least on the day of closing.

Regarding the closing to sell or refi, yes, your lender will just need to provide a payoff letter with wiring instructions to the closing agent. Post closing, they'll need to sign a cancellation of mortgage document or equivalent.

Thanks Mitch, this is great information! 

RE: Post Closing. How will the deed of reconveyance/cancellation of mortgage work? I figured that would need to be a part of the closing to remove that deed of trust prior to new ownership. Thanks again!

Technically, it's the responsibility of the lender to cancel the mortgage.

However, as private lenders we typically request that the closing agent draft the cancellation document and send it after the closing is completed.

The lender can then execute (sign, notarize & have witnessed) the cancellation doc and then return the original to the closing agent for recordation.

Thanks Mitch! I pulled some past deeds and it looks like a substitution of trustee and full reconveyance can be drafted by title. Appreciate the help!

Quote from @Mitch Messer:

Quote from @Pat Arneson:

I've read a few old posts regarding this topic and have those documents in order, but I still have the following questions regarding a private loan (from family) --

Loan Documents for Purchase -

1. We have the promissory note, personal guaranty, and deed of trust(title/escrow to handle) ready to go. Does the promissory note and personal guaranty go to title or should I execute these outside of escrow?

2. Does my lender need to provide escrow instructions or anything along those lines? Can he just wire the funds to escrow, I sign the deed of trust, and that's that? Or, do he need to send some type of escrow instructions that outline 1st position, will fund after all docs signed, etc?

Loan Documents for Selling

1. What will this same lender need to provide title and escrow when I sell the property? Is it just a payoff demand and wiring instructions?

Thanks! This forum has been extremely helpful.

Hey Pat, regarding your docs for buying:

1. The promissory note and personal guaranty are private documents that don't get recorded. That said, I would still recommend you have them executed at closing by your closing agent, along with the other docs. I also recommend you provide two sets for signature, so that both borrower and lender get signed originals.

2. Your lender just needs to wire adequate funds to close. If there are other liens to be recorded, you should have already agreed as to the lien position this lender will be in, and the closing agent should know it.

3. Also at closing: You should provide your lender with a lender's title insurance policy, separate from your owner's title insurance policy. I recommend you as the borrower pay for this.

4. Also at closing: You should provide proof that the lender is named as such on a valid hazard insurance policy effective at least on the day of closing.

Regarding the closing to sell or refi, yes, your lender will just need to provide a payoff letter with wiring instructions to the closing agent. Post closing, they'll need to sign a cancellation of mortgage document or equivalent.

Thanks Mitch, this is great information! 

RE: Post Closing. How will the deed of reconveyance/cancellation of mortgage work? I figured that would need to be a part of the closing to remove that deed of trust prior to new ownership. Thanks again!

I've read a few old posts regarding this topic and have those documents in order, but I still have the following questions regarding a private loan (from family) --

Loan Documents for Purchase -

1. We have the promissory note, personal guaranty, and deed of trust(title/escrow to handle) ready to go. Does the promissory note and personal guaranty go to title or should I execute these outside of escrow?

2.  Does my lender need to provide escrow instructions or anything along those lines? Can he just wire the funds to escrow, I sign the deed of trust, and that's that? Or, do he need to send some type of escrow instructions that outline 1st position, will fund after all docs signed, etc?

3. What about Lender's title policy? 

Loan Documents for Selling

1. What will this same lender need to provide title and escrow when I sell the property? Is it just a payoff demand and wiring instructions?

Thanks! This forum has been extremely helpful.

Quote from @Luka Milicevic:

Thanks for your reply!

With the trimmed down agreements, are you then entering into a full contract to purchase with the owner? If so, I'm assuming you write a check directly to the wholesaler and they are out of the transaction? Then deposit EMD for transaction with property owner?

For double close, how do you ensure the wholesaler is in contract to purchase? They obviously won't want to share that unless they redact the purchase price.

Can anyone point me to a step-by-step guide for end buyers working with wholesalers? There are a few things I'm specifically interested --

- Do wholesalers actually enter into a PSA? Or is it a trimmed down agreement (option to purchase)? I'd like to be aware of what the wholesaler's obligations are should they assign us the contract. If it is a trimmed down option agreement, do we then enter into a full PSA with the property owner?

- Assign vs. double close. What is typical? I'm assuming assign.

- Non-refundable EMD: For the most part, we are fine with this provided we receive marketable title. Should this be sent directly to escrow? I've seen posts say it goes directly to the wholesaler, but how do we get that money back should there not be clear title? Based on what I'm seeing in some FB groups (don't intend on buying here), there appears to be a lot of scammers. I'm assuming it works by using this non-refundable EMD or they are simply daisy chaining.

Ultimately, how can end buyers be most protected from fault of the wholesaler or property owner? 

If I intend to fund the rehab with my own cash, do I need to disclose my rehab budget? I’m seeing lenders holdback this amount. It’s showing as increasing the loan amount although monthly interest payment stays the same? 

Quote from @Jay Hinrichs:

Ok this is how you do it for court house steps.. the investor provides your cashiers checks. some will charge you to use them like 250.00 or something.. if you dont win you simply bring the checks back and give them to the bank and your out 250.00 or they dont charge you at all.
then when you win the bid to secure the lender you simply have the trustee's receipt name your lender as the buyer.. so he is secrured the deed comes back in his name then you simply reverse the ownership and record a mortgage.. U can have the receipt in yours and his name as well but this is how I have done it when I am giving money for auctions.

Thanks Jay! I'd be curious how this arrangement would work. I'm assuming you need an established working relationship with said lender. Why would they agree to provide cashiers checks without knowledge of purchase price, rehab costs, and ARV?

Quote from @Amir Khan:

@Account Closed I agree with Mitch, to provide protection and trust from your PML, you need to have his/her funds go to the title company and in escrow prior to closing (instead of coming into your bank account). Another important thing not mentioned is that you need to list your lender as "additional insured" on your insurance policy. 

Thanks Amir! I like that idea -- This should work for most properties except in person auctions. I'm wondering if it will work for online auctions. I assume it should...