All Forum Posts by: Jerel Ehlert

 Courts don't like granting specific performance.  The purchase/sale of real property is one of the few areas that it *could* be granted.  If a court has ANY other way to award relief through money damages, that's where the court will go.  

For a dealer or merchant, there's a monetary damage model available - lost profits.  This model says that a merchant ("dealer") can be made whole by granting the profits the merchant would have received, but for the breach of contract.  If a flipper can calculate a money amount it would have received as profits with reasonable certainty, a court will favor that over specific performance.

Believe it or not, divorce is probably the best route it sounds like.  Even common law marriages need divorce to separate assets (like houses).  The divorce decree can require a deed in owlety and deed of trust to secure an assumption.  It can also address debts guaranteed by the other partner.  Nothing the lender can do to trigger a due on sale clause based on a divorce decree.

That's a lot to unpack.

Feel free to reach out.  

I'm a bit late to the conversation, but glad OP got it worked out.

IN TEXAS, because I'm only licensed in Texas and this is where OP is posting from, here are my thoughts:  There were good ideas and some less well-considered responses.  

If this comes up and the buyer/seller can't work it out between them, talk to a real estate lawyer.  If the money warrants action, send a demand letter.  When a demand letter from a firm goes out, it changes the game from checkers to chess.  Seller might reconsider their position.

Next up - file suit for specific performance.  IN TEXAS, lis pendens requires a live lawsuit before filing in the real property records.  IN TEXAS, suits based on contract, the prevailing party may recover attorney's fees.

Relief in a suit - IN TEXAS, specific performance is frowned upon (read, unlikely) if monetary damages will make the prevailing party whole.  Sale of real property is one of the few cases where it is likely to be awarded.  But even here, if the buyer and seller are dealers ("flippers"), then money damages could be awarded.

As for timing, show up to closing with money in escrow. If/when the seller doesn't, have the case ready to file the following morning.  Seller should actually breach the contract before filing suit. If the underlying suit has merit, counterclaims for slander of title are unlikely to stick.  Doesn't mean that seller won't bring them, just that they have a hard time proving it.

So long as there are no deed restrictions prohibiting it, in Texas you can put a fence on your property. Sure, it would be great if neighbors chipped in, but no law requires it (deed restrictions aside). So if you want a fence, be ready to foot the entire bill.

Put two lawyers in a room, ask a question, and get 18 different answers.

Short answer: it depends.

Long answer: it really does depend.  Rental income is taxed most favorably while flip income is taxed at much higher rates, so there's an income tax perspective, and that's entirely relative to the rest of your income tax picture.  Then you look at possible exposure to legal liability. From what? Tenants, trespassers, contractors, suppliers, guests, etc. It's different for each type of income. Then there's state reporting requirements to consider.  Some states are easy to work under, others are difficult.

I doubt this helps, per se, but I hope it illustrates that your question is not as straight forward as it might appear.

Private lender on 3-5 year amortizations and minimum yield. Best bet is to look up self-directed IRA holders.

If you have never done sub2 in TX before, you probably need to pass.  Insurance is a huge issue.  Not a deal structure for new investors, especially from out of state.

Title insurance is rare, except when actually *assuming* the loan with lender approval.

There are a number of books on syndication to educate yourself.

Get a lawyer in the state you will be investing.  Even if they have a securities lawyer, you need one of your own representing YOU.  Pay for good advice.

Take your time. Learn (in detail) about your options. 

If you don't/won't learn how to preserve your wealth, find someone who you trust with your life who will and pray they do a good job.

Due diligence is life.  Trust no one without good reason.