All Forum Posts by: Jim L.

@Wayne Brooks,  according to Dave Schumacher, founder of TTS, they do at least track down all potential challengers and get sign-off.  This at least speeds up the process, and one could pursue quiet title separately.  In some cases they orchestrate an alternative exit (e.g., Trustee was not properly served notice, and wants the property, so they pay the purchaser more than they paid at auction.)   I found this interview with Dave to be quite enlightening:  http://buyingtaxdeeds.com/podcast-2/ It's possible I misinterpreted what he said, however.

The blatant bait and switch tactic is illegal in at least some jurisdictions.  Borrowers latch onto the "we can help you keep your home" words and ignore the small print, if any.  When they then lose their home anyway, watch out for a lawsuit.  (If betting on them not affording such suit in order to take advantage, one should reconsider his/her life choices.)

If your local laws indicate that a mortgage lien is junior to a tax lien, the trustee likely made a mistake.  However, the trustee may be able to challenge the tax foreclosure due to, e.g., improper service of process.  (Sometimes a big lender's departments fail to adequately communicate these things to each other.)  If so, and again dependent on local laws, the trustee may be able to redeem the property from the tax sale.  Your purchasing at trustee sale may or may not give you the right to redeem; that is something you should talk with an experienced local real estate attorney about since it typically involves a lot of state-specific law.  Good luck.  

Not sure if you mean a property purchased at a foreclosure auction, but if so, depending on rules in your area, you may find it challenging to do an assignment or double-close type wholesale with a foreclosure property because you (a) may not have marketable title for some time, and/or (b) must pay full purchase amount on the day of the auction.  Food for thought.  If you pay for a property outright at an auction (or elsewhere, for that matter) you're typically out of the realm of wholesaling.

Another option for tax foreclosures is to use a service such as offered at TaxTitleServices.com.  Faster and often less expensive than a quiet title action.  They chase down all the potential redemptioners and/or others who might challenge the property transfer, obtaining quitclaim deeds and/or other solutions.  The company's title partners (particularly First American) accept the resulting certification and will thus insure title. 

Read through RCW 61.34.  There are differences of opinion on whether one can safely navigate within this law for targeting pre-foreclosures and subject-to's.  At a minimum you'd want to work with a mentor or (preferably) attorney that is experienced in distressed property matters and well-aware of the many legal pitfalls.  (See, for example, RCW 61.34.120, which is full of convoluted language that may be subject to various interpretation.)  In my view, it IS possible to successfully target pre-foreclosures and subject-to, but it's a minefield.  If you can master this area, you may have little (legal) competition.

The above is provided for discussion only, and, to the extent it could be construed as advice or counsel, should not be relied upon without first engaging competent legal counsel for your particular jurisdiction and legal issues.  No client-attorney relationship is or should be construed from this discussion alone.  

(I had a detailed response, but Russell's answer covers it succinctly.)

@Gabe Hall  I have read the Kaiser case, and the relevant RCW sections.  Unless I'm missing something, the Joe Kaiser case says nothing about illegality in using tax foreclosure lists to identify pre-foreclosure properties and contacting the owners in an effort to *ethically* aid their situation.  Kaiser and his partners systematically violated consumer protection and other laws by, among other acts, falsely promising distressed homeowners they'd save their homes, then instead taking ownership and permitting foreclosure sale to proceed, and hiding overages on the tax sales.  I.e., Kaiser et al. overtly hurt homeowners rather than help them, putting them in a worse situation than if they'd lost their homes in the tax sale.  Reliance on the ignorance or naivete of homeowners to profit thereby is obviously and egregiously wrong, even when not explicitly prohibited by black letter law.

However, unless I am much mistaken, there are plenty of ways (particularly in today's seller's market) that an investor or RE agent could actually help distressed homeowners--within RCW 61.34 and the Consumer Protection Act (RCW 19.86)--and still make a profit.  

@Gabe Hall, do you have a source for the rule about tax foreclosure lists?  I'd like to understand that better.

Note that "appreciation" can be tricky too.  A home that has the same dollar-cost now as it did 40 years ago has actually lost nearly 74% of its value (average 3.51% annual inflation compounding over 40 years....)    It seems prudent to assume inflation will continue.  Unless there is a really good reason to believe the value of D-F properties of inner cities will outpace inflation, in some cases for the first time in their existence, it seems like this is not the no-brainer one might hope for.