All Forum Posts by: John Clark

Quote from @John Clark:

Quote from @Ken M.:

So, in your world, I should have said

"always record, unless you've done something stupid that you don't realize is stupid, and can't know that is stupid, because you weren't smart enough, or you were too cheap to pay for my training and the list of stupid things includes, but is not limited to, not bringing the loan current when you buy a property Subject To ? There are plenty of stupid things to do using Subject To, and this is only one."

Okay, consider it corrected. Thanks for the enlightenment. Now, everyone whoever reads Bigger Pockets will know.

Actually, it's details like this that makes training "one on one" for a full year, valuable. People misunderstand and there are nuances. Each deal is different with creative finance. If I'm involved from the beginning, it goes well. If I or anyone, has to step in to solve a problem, it gets more difficult and tedious and dangerous.

 No, Ken. Your setting up a straw man about me doesn't work.

I said to always record, as that if there were problems with one's purchase, a refusal to record was not going to save the buyer, and in fact might cause problems. If there were problems and one did record, one got a seat at the table and could protect one's interests.

If there were no problems with one's purchase, recording protected one's interests, and if one didn't record, the bank could foreclose your interests without you having advanced notice. Additionally, the seller could notify the bank of your existence and then you are brought in, late, kicking, and screaming, to defend your interests. 

Then, in the latter scenario, the bank beats you over the head with the fact that you refused to record, which delays matters and costs you money  -- even if you win.

You already posted that the second scenario happened to you, so there was no advantage to not recording. It didn't save you from anything.

As a lawyer, Ken, I will give you a piece of legal advice which is particularly true when equitable interests are involved: If one's business model depends on concealing fact, it is wrong.

Therefore one records.

I respectfully disagree. If one knows there is a rattle snake in the trail, one changes course. The matter at hand is to either bring the loan current and record OR to get out of the deal before you wind up in court. 

Now, you haven't said you practice law in Arizona or where ever he said the property was, I forget, but unless you litigate and make money doing so, a reputable attorney would never tell his client to take that kind of risk.  

So, in your world, I should have said

"always record, unless you've done something stupid that you don't realize is stupid, and can't know that is stupid, because you weren't smart enough, or you were too cheap to pay for my training and the list of stupid things includes, but is not limited to, not bringing the loan current when you buy a property Subject To ? There are plenty of stupid things to do using Subject To, and this is only one."

Okay, consider it corrected. Thanks for the enlightenment. Now, everyone whoever reads Bigger Pockets will know.

Actually, it's details like this that makes training "one on one" for a full year, valuable. People misunderstand and there are nuances. Each deal is different with creative finance. If I'm involved from the beginning, it goes well. If I or anyone, has to step in to solve a problem, it gets more difficult and tedious and dangerous.

If you can't distinguish between actions in investing that are taken when proper procedures are followed, versus actions to avoid disaster when proper procedures aren't followed, you will have an interesting experience.

Advice to avoid disaster is almost always different than advice that is considered "the norm". 

Quote from @John Clark:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

They write the contract in general and waive in the specific. Once the relevant (duration) treasury goes above your mortgage rate, I have always found banks open to waiving prepay penalties.

Ok going to ask are treasuries above 4% ? 

Quote from @Andrew Syrios:

Quote from @Jay Hinrichs:

Quote from @Andrew Syrios:

Quote from @Don Konipol:

Quote from @Andrew Syrios:

I have never seen a bank call a Due on Sales Clause on a performing loan. I've heard of it but never seen it happen. Has anyone actually had a bank do this on a property they bought subject to? 

Yes, I’ve seen it done a number of times, but more come in the commercial arena.  More common with private lenders, or banking institutions where pressure is being applied by regulatory authorities 

 That makes perfect sense. I could definitely see commercial loans (where the bank presumes the buyer could pay it off) and private lenders calling them much more than a bank calling a performing residential loan. I also figured it would be much more likely now when rates are in the mid 6s and many subject to loans are in the 2s and 3s vs the post-2008 phase when the loans being assumed generally had higher rates than the loans being originated even though basically no new loans were being originated. 

 I dont think rates play into like your thinking.. so many notes are sold to servicing companies so payoffs are not good for them.

That makes sense but I will still think rates play some part of it, at least for portfolio'd loans. I would think if I had a 3% fixed loan that got subject to'd I would be tempted to call the loan.

 tend to agree on portfolio loans. But then why on many of the commercial loans are there pre pay penalties ??? I will have this conversation with my Banker and ask him for instance on a commercial loan I have at about 4% why I cant just pay it off without a big fat pentalty. ?  Right ? 

I suspect Don may know why banks have pre pay penalties on 4% loans today.. One answer might be deals are harder to find so they want to keep thier funds out and working

Quote from @John Clark:

Quote from @Ken M.:

Quote from @John Clark:

Quote from @Ken M.:

Please copy here what you are saying I said.

It should say (and probably does say)
You should always record the deed. You are not required to notify the lender. Those are two different things. 

That is one reason one on one training is advised. Some of these things require careful attention.

What you actually said is below, Ken.

It's in the "Should I file the Deed, or wait, for some reason..?" thread, Started on 8/26 or thereabouts, about my telling the original poster he should record his unrecorded deed. You objected to that, several times, saying the below:

---------------------

Ken M, 26 days ago, in response to me: "Yes, it [recording the deed] can harm him a lot.
He will be asked why he did what he did, and what did he do to mitigate the damage."

Ken M, 24 days ago, in response to me: "Recording raises serious questions. Now, I would never officially suggest that he simply burn the "probably very incriminating deed" and simply tell the seller he is no longer involved in the transaction so the seller can find a proper solution for his foreclosure. But, if he were to do so, the likelihood of this coming back at him is remote. No recorded deed, in fact no deed at all, perfected or defective and the seller has time to correct the problem without relying on an imperfect transaction. . . . . On the other hand, recording the deed establishes a fact pattern worth pursuing. . . .

So, I'm not going to suggest the buyer burn the deed and get out of the deal, but it has interesting options."

Ken M, 23 days ago, in response to me: " Conversely The OP, under my hypothetical scenario that he simply burn the unrecorded deed, has an argument that he doesn't own the property and no one would have evidence to the contrary. It would save him a great deal of litigation. No paper trail. "

Ken M, 23 days ago, in response to me: "The buyer has an unrecorded deed, that he controls. There are no payments, there is no recorded deed, there is nothing showing that the buyer actually bought the house, other than the unrecorded deed. If the buyer were to somehow lose that document, he would have to hire an attorney to prove ownership, the very thing I suggest he avoid. But, if the OP lost that document, it would be difficult to prove he did buy it and in my opinion, in this situation, that would be favorable to the OP. It would keep him out of trouble.

However, if he follows your advice and records, he could wind up like this: Very bad"


Ken M, 23 days ago, in response to me: "Not recording, no lawsuit."

---------------------------

Too many martinis, Ken?

Heh, heh
No, now I remember. That is a situation where the poster stated he had not followed proper protocol and rather than cloud the title, I suggested he leave it alone, and jettison the deal.

Finally found the post (I didn't realize I'd responded to so many posts) ;-)
https://www.biggerpockets.com/forums/48/topics/1258546-shoul...

His question was:

"Though I have the deed, I'm wondering if I should go ahead and 'file it' with the county. I haven't cured the default on the mortgage yet (it was 6 months behind, and in default)."

Buying a property in default, using Subject To, causes a confusion of legal issues. He didn't seem to be prepared for the ordeal. It is always imperative that a loan in default be brought current first and foremost. 

The possible legal issues include, loan fraud, wire fraud, bank fraud, due on sale (of course), contract violation, Consumer Protection Act violations, Dodd-Frank violations, S.A.F.E. Act violations, defamation of title, unauthorized practice of law. I mean, it just goes on and on.

Since we don't know what he told the seller, the seller's vulnerability status, or the previous history of the loan, there is no way for us to know which direction it would go in a legal confrontation. It would be intriguing to watch, but painful for the buyer.

But for sure, if the property was in foreclosure and the loan wasn't cured, the property would go to sale, the seller's credit would be trashed. If it was a recourse loan, the seller would then owe money which would probably go to collections. The seller would be entitled to sue  at least for breaking the contract and probably win. The lawsuit would take a year and a half and run $25,000 to $50,000 for the buyer, and I'm guessing from what he wrote, he'd lose.

In this situation, I surmise that an astute attorney would get the State Attorney General involved to inflict great pain.

There just isn't enough profit to be made on such a property. Ethically, you shouldn't do it anyway.

The best plan is to get trained first, properly execute a purchase & sale agreement, get a Title Report, go through escrow, bring the loan current, and FOR SURE, make every payment on time.

Sing and dance all you want , Ken. You said he should not record the deed. In this thread you said “always” record, and when I called you out on it, you essentially said “prove it.” I just did.

So were you lying then, or are you lying now? Perhaps you’ll blame it on martinis both times?

The original poster in that thread didn’t bring up fraud or anything. You, Ken, are simply a BSer, and you say whatever you think will get you out of trouble for the next X minutes.

And you want people to spend how much on your course? Does it come with an open bar?

By the way, at the end of your latest post, you still don’t say that one should record.
 

Are you actually @James Hamling: with an alias?

You're exhibiting bizarre behavior like him.  If you want to have a reasonable discussion; look it doesn't even have to be logical; but try to make sense, so I can figure out a proper response. I'm sorry that investing is so hard for you, but someone will help you if you want, otherwise you are on your own.

Sigh "Why do * I * attract all the crazies"?

Timeshare certainly comes to mind with the business model of Pacaso. 

The counterargument to the timeshare analogy is that you own actual equity that appreciates.

Quote from @Jonathan Greene:

Quote from @Remington Lyman:

Quote from @Jonathan Greene:

Quote from @Remington Lyman:

Quote from @Jules Aton:

AI generated responses are so annoying. I haven't been here very long but am surprised by blind encouragement for new members to take on risky deals. I'm trying to keep an open mind on the value of collaborating vs predatory behavior.  BTW is there a way to block any post with the word Ohio? lol

 mute every Realtor that posts on the Ohio threads. Should take you 15 minutes

 It will take more than 24 hours to accomplish this task.

 doubt it. Here are 3 steps that will take 24 hours to accomplish this 

1 - post "Hi, I am a new out of state investor looking to purchase in Columbus, Cincinnati, and Cleveland, Ohio"

2 - wait 23 hours

3 - mute everyone that replies

Everyone knows by now that if you post, "Hi, I am a new out of state investor looking to purchase in Columbus, Cincinnati, and Cleveland, Ohio", you automatically go on 14,231 mailing lists, get a ReafCo mug in the mail, get a 34-page prospectus on the benefits of landlording in Ohio, and get Slydial calls for 24 hours straight.

Bruh you should see what I have been working on for the past year. We started using our front end and back end CRM correctly and now AI works all of our unresponsive leads. Once you are in our system you have to respond or reply stop to end the follow up!

Quote from @John Clark:

Quote from @Ken M.:

Please copy here what you are saying I said.

It should say (and probably does say)
You should always record the deed. You are not required to notify the lender. Those are two different things. 

That is one reason one on one training is advised. Some of these things require careful attention.

What you actually said is below, Ken.

It's in the "Should I file the Deed, or wait, for some reason..?" thread, Started on 8/26 or thereabouts, about my telling the original poster he should record his unrecorded deed. You objected to that, several times, saying the below:

---------------------

Ken M, 26 days ago, in response to me: "Yes, it [recording the deed] can harm him a lot.
He will be asked why he did what he did, and what did he do to mitigate the damage."

Ken M, 24 days ago, in response to me: "Recording raises serious questions. Now, I would never officially suggest that he simply burn the "probably very incriminating deed" and simply tell the seller he is no longer involved in the transaction so the seller can find a proper solution for his foreclosure. But, if he were to do so, the likelihood of this coming back at him is remote. No recorded deed, in fact no deed at all, perfected or defective and the seller has time to correct the problem without relying on an imperfect transaction. . . . . On the other hand, recording the deed establishes a fact pattern worth pursuing. . . .

So, I'm not going to suggest the buyer burn the deed and get out of the deal, but it has interesting options."

Ken M, 23 days ago, in response to me: " Conversely The OP, under my hypothetical scenario that he simply burn the unrecorded deed, has an argument that he doesn't own the property and no one would have evidence to the contrary. It would save him a great deal of litigation. No paper trail. "

Ken M, 23 days ago, in response to me: "The buyer has an unrecorded deed, that he controls. There are no payments, there is no recorded deed, there is nothing showing that the buyer actually bought the house, other than the unrecorded deed. If the buyer were to somehow lose that document, he would have to hire an attorney to prove ownership, the very thing I suggest he avoid. But, if the OP lost that document, it would be difficult to prove he did buy it and in my opinion, in this situation, that would be favorable to the OP. It would keep him out of trouble.

However, if he follows your advice and records, he could wind up like this: Very bad"


Ken M, 23 days ago, in response to me: "Not recording, no lawsuit."

---------------------------

Too many martinis, Ken?

Heh, heh
No, now I remember. That is a situation where the poster stated he had not followed proper protocol and rather than cloud the title, I suggested he leave it alone, and jettison the deal.

Finally found the post (I didn't realize I'd responded to so many posts) ;-)
https://www.biggerpockets.com/forums/48/topics/1258546-shoul...

His question was:

"Though I have the deed, I'm wondering if I should go ahead and 'file it' with the county. I haven't cured the default on the mortgage yet (it was 6 months behind, and in default)."

Buying a property in default, using Subject To, causes a confusion of legal issues. He didn't seem to be prepared for the ordeal. It is always imperative that a loan in default be brought current first and foremost. 

The possible legal issues include, loan fraud, wire fraud, bank fraud, due on sale (of course), contract violation, Consumer Protection Act violations, Dodd-Frank violations, S.A.F.E. Act violations, defamation of title, unauthorized practice of law. I mean, it just goes on and on.

Since we don't know what he told the seller, the seller's vulnerability status, or the previous history of the loan, there is no way for us to know which direction it would go in a legal confrontation. It would be intriguing to watch, but painful for the buyer.

But for sure, if the property was in foreclosure and the loan wasn't cured, the property would go to sale, the seller's credit would be trashed. If it was a recourse loan, the seller would then owe money which would probably go to collections. The seller would be entitled to sue  at least for breaking the contract and probably win. The lawsuit would take a year and a half and run $25,000 to $50,000 for the buyer, and I'm guessing from what he wrote, he'd lose.

In this situation, I surmise that an astute attorney would get the State Attorney General involved to inflict great pain.

There just isn't enough profit to be made on such a property. Ethically, you shouldn't do it anyway.

The best plan is to get trained first, properly execute a purchase & sale agreement, get a Title Report, go through escrow, bring the loan current, and FOR SURE, make every payment on time.

Please copy here what you are saying I said.

It should say (and probably does say)
You should always record the deed. You are not required to notify the lender. Those are two different things. 

That is one reason one on one training is advised. Some of these things require careful attention.