All Forum Posts by: Keith Saunders

As a last ditch effort, you can always put a for sale sign in their front yard with your number on it. They may contact you.
Usually upset, asking who you are and why are you trying to sell their house.

If so you can tell them your a Real Estate Investor who has another property in the neighborhood for sale and kids must have moved the sign to their yard as a joke. Tell them you will be happy to remove the sign ASAP. Appologize for any misunderstanding. Then ask them "since I have you on the phone do you happen know of anyone that may have a property they want or need to sell in a hurry"?

Most of the time it takes them a second to think to themselves "yeh... I do"

I'm sure you can handle the conversation from there.
You will also be collecting potential buyers as well. When they call to ask about the property. Tell them its under contract right now but won't be closing for a while yet.

You can also take this opportunity to build you buyers list for other properties you have or may have in the future.

Good luck

sorry... meant to say wholesale it to an investor.

Here is what the house needs:
all new drywall, plaster is falling off the ceiling
all new kitchen- was ripped out to the studs by owner
2 new full bathrooms - ripped out to studs by home owner
new carpet and flooring throughout the house
Paint whole interior
new electrical service - current is a 80amp service with fabric wrapped romex and 2 prong outlest throughout the house.
New HVAC
New Roof
Bricks need repointed in several areas
Chimney needs repair - cap is about to fall off the house
roof over rear porch has either carpenter bees or termites and is full of rotted and split wood.
Driveway is asphalt and may look ok with some care
front walk is half torn out, the halk that is closest to the house - about 25 - 30 feet of it.
and of course it need some landscaping to make it look good from the street.

My primary thought is to whole to another investor, but I did look into rentals in the area. The avrage house rental for this size house in this area is $1500 - $1700.

Average comp sale price is $157,000

With this info how does the deal look?

Hey all,

I'm new to rei so I need some advice. Looking at a house in PA, owner is free and clear on the home. Been vacant for 4+ years, no utilities on and he started renovations. Tore out some of the walls, the kitchen, a bathroom and some ceilings. The walls are plaster so its a complete tear out and rebuild. The home is a 1260 sqft cape cod with 3 bed 2 bath.

ARV is $140K, owner wants $50K and wants me to pay his closing costs. My thought is he just wants too much for the amount of repairs that need done for me to make a profit even if I was going to do the work myself. Which I wouldn't. Actually wanted to buy it to wholesale it to another investor for about $5K.

Owner will not take less than $50k and will not sign the deal unless I pay his closing costs.

My offer on the house was $30K and expected him to pay his own closing costs. And that is what I feel the property is worth. He keeps threatening to walk away if I don't agree to HIS terms.

Keeps telling me "I will just hold onto the property and fix it up myself". "I'm retired and have all the free time in the world".

Here is what I think... If he was going to do the work himself or fix it up he would have done it by now. He should pay his own closing costs, and the property is worth at most $30K. The house needs everything except windows which are new.

First thought was to tell him no deal and walk away. After all, he called me immediately after I sent him a we buy houses letter.

The best number I can seem to estimate in repairs is $65K.I know at that price $50K is a non starter.

So the question How much should it cost to totally rehab a 1260sqft brick home with good bones?

Is it a good deal at $50K?

Should I agree to pay HIS closing costs?

Personally I think its a suck deal and he thinks im a sucker.

Am I right? or not?

Jason,

I agree, the defaulting homeowner should NOT be rewarded for the banks mismanagement of documents. I didn't mean to suggest they should. They should be foreclosed on, so the assett the bank is holding can become profitable.

But it's the banks role to provide valid proof of ownership documents, not only for the foreclosure process, but also the resale of the asset once the foreclosure has been executed.

Anyway you cut it, the banks refusal to follow federal guidelines is what caused the issue of missing documents in the first place. Now further refusal to follow even more federal guidelines and committing felony forgery will reward the banks.

Does that seem right or fair? It certainly doesn't to me.

Banks should foreclose on defaulting homeowners. But if the bank can't show original ownership documents then the property goes into a trust. Until the bank finds them or follows federal guidelines to replace them the right way.

That way nobody is rewarded for their undesireable actions.

Keith

Paul, I'm not insulted, but its not like the banks haven't given us sufficient reason for the "banks are bad" feelings.

They screw millions of americans out of hundereds of billions of dollars. Then take hundreds of millions in tax payer bailouts to save their asses from going out of business. Now a 750 credit score, and 20% down is not enough to qualify for a loan at any interest rate.

Now to top it off.

In all the confusion of packaging, buying and selling thousands of mortgages in bulk. Then repackaging them just to buy and sell to someone else, and so on. Totally ignoring the federal guidelines to properly transfer the official documents, each time the properties ownership was changed. (Because it would slow down the process of buying and selling mortgages.) Banks have lost or misplaced the original ownership documentation.

Banks are now overwelmed by the huge number of loans in default. Home Owners in default are asking the banks to provide documentation to prove the bank foreclosing on them is infact the rightful owner of said property. Having the right to foreclose on said property. So now, the banks realize they don't have the OFFICIAL ownership documentation. It has been lost, misplaced or possibly they aren't even the rightful owner. For what ever reason, they don't have the official documentation.

So what is the banks solution?

We'll just manufacture bogus "OFFICIAL" documentation instead of once again following federal guidelines that I'm sure are setup to deal with replacing missing or misplaced official ownership documentation.

Why would they do that, you may ask?

Because, once again that would take to long. Its more important that they clear the books than follow the federal guidelines.

So no Paul, I am not caught up in the "banks are bad" Mantra. I am caught up in the "Banks are Bad' Truth, with facts to back it up.

Whether the bank actually owns the property or not is secondary to my point. It's the fact that they think that forging official documents is ok. Just so they can continue to do what they were doing before the crash. Move real estate off their books on onto someone elses.

Lets face facts, do you really think every single loan that was packaged with other loans, sold, resold, repackeged and sold and repackaged again and again is now in the hands of the bank that actually owns it?

If you do I got a nice bridge in brooklyn to sell ya, CHEAP!

The reason they don't follow the guidelines is simple. It would be too expensive and time consuming to track down the pedigree of each loan document missing or misplaced. To re-establish the official path of ownership. Possibly even coming to the conclusion they don't own the property and maybe never did.

So instead they hire a third party company to manufacture bogus documents "PROVING" the bank owns the property in question. And why not? It's cheaper, faster and affords the bank protection from liabilty.

"It must have been that pesky third party company we hired that did it, we're innocent victims just like all those people whose houses we foreclosed on thinking we owned the property legally" Said the bank president.

LOOK!, here is how I see it and can sum it up. "Right is right and wrong is wrong". And what the banks are doing is WRONG.

Don't get me wrong I'm not saying banks should not foreclose on homes in default. I'm just saying they should have the Offical Original Documents or Official Replacement Documents to prove they own it before they foreclose.

If you don't agree that's ok. We can respectfully disagree with one another on this subject.

Keith

The story is more about the big banks forging ownership documents at a rate of approx. 3500 bogus documents a day per employee.

The use of the "Show me the documents" stratagy is old news as you said.

Here is the story I saw last night. See for youself then tell me what you think.

http://www.cbsnews.com/stories/2011/08/07/60minutes/main20086862.shtml?tag=contentMain;cbsCarousel

Here is my main concern. I don't want to get caught up in the middle of all the banks BS. And end up paying the price because of mistakes they made 3 years ago.

View the story and tell me how we as investors can protect ourselves, our properties and our profits with so many fraudulent ownership documents be produced by large banks?

Correct me if I misunderstood you.

If I was to find a property, that lets say, fell through the cracks in all the confusion of the housing crash. And the ownership paperwork was "misplaced". I find this property that nobody seems to own.

I could create bogus ownership documentation just like the banks are doing. Claiming it as my own, even though I have no proof of it ever being mine. Then sell it to an unsuspecting buyer for a profit. As long as I have bogus paperwork that looks like its real?

Then say 2 years later someone finds the actual ownership documentation. Maybe it "fell behind the filing cabinet" or something. That person lays riteful claim to the property, Right?

The buyer is covered because of the title insurance. The title company takes a loss without a fight and no investigation. The riteful owner gets the property. And all is right with the world? No Harm, No foul, No State or Federal Charges filed? Everyone is happy? It's like it was a dream, Right?

Lets just say for arguements sake, that's how it works.

That's an REO property. Do you really think that theres not just as many properties that are NOT in default that the banks have lost paperwork on? Do you think when Joe Homeowner pays off his home after 30 years and gets bogus ownership paperwork from the bank. Nobody will ever be the wiser?

And if Joe Homeowner tries to sell his home, because he wants to move to florida. No Title insurance company will ever know the ownership documents are fake or will ever come into question?

From what I can see, the cat is already out of the bag. Its just a matter of time before this thing blows up. The only question is how bad is it going to get?

Now that its out that the banks have been forging documents. How long do you think it will take to be a HUGE issue to every person that is holding or has held a mortgage in the past 5 years?

The origin of this story was on "60 minutes". Not someones blog, or some no name newspaper or some realestate talk radio show. Do you really think given the current state of the realestate market and millions of people grasping at straws to keep their home are not going to be asking for proof of ownership paperwork from the banks, and verifying the validity of the paperwork from now on?

Not to mention all those who have already lost their homes filing suits against the banks for misconduct, forgery, not to mention breaking several state and federal laws. Do you really think this is just going to go away? Do you think Obama is not going to take this chance to try to institute even more oversite and regulations on the banks?

Did you even see the 60 minutes story? More than a few of these "Official" documents had "Insert Bogus Address Here" or the space for the address of the property was left blank.

In other documents, the bank had been foreclosing on properties for months. When asked to supply the ownership documents the date the bank acquired the property was 2-3 months after they had started foreclosure. In other words, they started to foreclose on properties they wouldn't even own for 2-3 months.

In my opinion its not a matter if we are going to get screwed by the banks again its how hard this time?

I am trying to state my case respectfully with the facts as I know them. None of what I have stated in intended to insult or attack anyone.

I am new to RE Investing but not uneducated I have been studying the RE markets and Investing in general for several years now. I am by no means proporting to be an expert.

What I am looking for are solutions to a worst case senario. If this does go down as I suggest. What do we do as investors to protect ourselves and our properties?

For everyones sake I hope I am 100% wrong.

Any solutions anyone?

Keith

Scott, you obviously have alot more RE experience than I do. But I have to disagree.

I don't see how this ISN'T a big problem. Even if the bank does have ownership of the properties in question. The Ownership document they have provided to prove their ownership is 100% bogus. It's not even signed by any real bank personel or title agents. Its signed by some high school kid making $10/hr. Signing 350 and hour more bogus ownership documents just like this one. How is that NOT a HUGE PROBLEM?

There is NO proof of ownership. That is the whole reason for having these documents.To prove who owns the property. If you don't have the official proof of ownership then how can you assume ownership?

What they are producing is akin to "I own this property, signed bogus BIG BANK President, Vice President, etc." on the back of a bar napkin and expecting it to be legal and prove their ownership. I mean come on... you gotta see this is a major issue? Especially with millions of people already foreclosed on and millions more in the process.

Even if you are correct in saying that only thousands and not millions are potentially effected by this. What exactly is the number of people will need to be effected before YOU think its a problem? 600,000 or 800,000 maybe over 1 million? For most people it only takes 1, them.

Not to mention, the reprecussions that will result when and if the REAL ownership documents do surface. And knowing how banks seem to do business. It would be no suprise to find out the banks foreclose and sold properties that they didn't even own. And in all liklyhood it will NOT be a few thousand. With all the banks that went under after the crash. Whose to say they didn't shred the original documents. So what is there to prove the bank really is the owner of the property and not some defunked bank that doesn't even exist anymore. Then what happens to the property in question?

Moving forward, what about all the properties that are NOT in foreclosure? What if the bank you are faithfully sending your check to every month doesn't even own the property you have been paying for all this time? Do you really think the bank is only forging ownership documents on foreclosed properties?

The more I think about this, the more I am convinced this could be bigger than the bail outs, the market bubble and the RE bubble combined.

but,like you said. This is just my opinion... I could be wrong as well, but the recent past of the banks seems to favor my opinion.

Keith

Just saw a story on 60 minutes about several very large banks manufacturing ownership documents. All related to mortgage forclosures in the past several years. It appears they can not come up with the real title of ownership documents due to all the selling and reselling of mortgages prior to the market crash in 2008.

Citi Bank, Wells Fargo, Bank of America as well as several other well known banks have outsourced this deception to a third party company which would hire anyone that could hold a pen and sign a name. The forgers would sign the name of non existant bank presidents, vice presidents and other key official at the rate of 350 bogas mortgages an hour per each forger.

You can catch the whole story on 60 minutes website im sure for all the dirty details. One question I have for all of you that deal in preforclosure, foreclosure and reo properties.

How are you going to protect yourself now that you know the ownership paper you may be buying on that great deal you just secured is in fact real? or is it just forgery that most likely will come back to bite you in the butt?

I know you are all thinking, thats what title insurance is for, right? But what happens when millions of bogus ownership documents hit the street all at the same time and the title insurance companies can't pay? Then what?

One more thing, and maybe some of the realestate legal experts can answer this. What if any repercussions may come to pass on all the previous properies already purchased and sold with ownership documentation that are found to be forgeries?

I am new to investing and don't want to be chicken little. But given the track record of banks in the not so distant past. Who do you think is going to be left holding the bag? Not the banks.