All Forum Posts by: Bob Floss II

@Arzu Alimjan Lots of missing information here so it's hard to point you in the right direction. It sounds like perhaps the investment was made in an LLC? Were the investors made a part of the LLC? You could use the operating agreement to take control of the LLC and therefore the property. If not, and it sounds like you don't have a promissory note and mortgage, you'll have an uphill battle. You need to meet with an attorney in the jurisdiction of the house and get started right away.

@Josue De Hoyos No. The Sheriff is not responsible for accepting risk on the property with prior owners. They are only there to transfer title. 

@Marcello Cusma The sheriff sale is an opportunity for the general public to bid against the bank to purchase the property, but you must have cash on hand. Typically you need to pay in full within 24 hours. A foreclosure on the market is either getting ready to go to sheriff sale and the homeowner is hoping to sell it or no one bid at the sheriff sale and the bank took ownership of the property and is selling it. 

Caroline is correct, every mortgage will have some type of due on sale clause if you transfer to another person or entity. It doesn't stop clients from putting into an LLC later, but I always disclose there is a risk.

As mentioned above, many banks are aware clients put properties into an LLC. They would rather you didn't, but they understand. The podcast theorized banks may see the opportunity to take your 3% loan, declare you in default, or force you to refinance at 7% interest. No one has a crystal ball and can say for certain.

@Terris Elliott It is very easy to file the articles of organization and obtain an EIN. I have no doubt you can do that yourself. When someone pays me for an LLC, they are mainly paying for creating the operating agreement that governs the operations of the LLC. When it comes to the operating agreement, you get what you pay for.

@Sandy Uhlmann The bank can absolutely foreclose on a home in probate.

Keep in mind, depending on your local rules, a probate does not necessarily need to be opened in order for the executor or representative to sell the property. I do closings in lieu of probate all the time. However, the title company will make the seller pay for a bond at closing. If the seller ends up needing to open a probate, it makes more sense to open the probate now and pay the bond through the court filing, rather than spend the money at closing.

Once the court issues the letters of office for the probate, they can sell you the house. 

Do the tenants know the property is for sale? Sometimes landlords are weird about letting you in the property because they don't want tenants to know its being sold. I've personally walked through at least a couple dozen apartment buildings where I've been introduced as the insurance adjuster. No idea why that works.

Even if tenants know, getting the tenants to give access, let alone repeated access, is extremely difficult. You can't keep going back with contractors and expect them to let you in.

As Patricia stated above, some agents are coached to keep the buyer out of the property. Once inspection period is over, I've had many agents refused any access for any reason until final walkthrough. They don't want to give the buyer any opportunity to discover something that makes them walk after their due diligence period has expired. 

@David Sohn Attorney review will typically request liquidated damages, which means if the buyer breaches, the seller damages are limited to earnest money on deposit. If that change was not made or the seller did not agree, yes they can sue for breach of contract.

If you had an inspection contingency, you can back out within the contingency period. If the period ran out, you lost your ability to back out.

I assume since you are wholesaling, you told the seller you are a cash buyer. So there is no mortgage contingency to use to back out. 

@Listiarso Wastuargo Not all of Chicago. That area can be rough for rehabbing properties. Any property left unattended will be stripped clean or attract a squatter. When I close on flips, the seller will wait until the day of closing to have the new air conditioning unit installed and have buyer move in the next day or it will be gone.

FYI, turning off the utilities does not deter squatters. You just end up with some pretty nasty looking bathrooms.