All Forum Posts by: Max Gradowitz

Why is this surprising? The agent probably listed it far below market to get a lot of offers, they got a decently amount more than asking, and the overall amount is high. So? The ARV is probably 2 million. Whoever got this house is buying for the location, not the piece of sh*t home on there.

Plus, there might be some valuable junk included!  The prior owner of this house was probably rich as hell and left valuable junk!

Let's just get a few things out of the way, because I see some statements that I disagree with:

1. Is the CAR purchase agreement is assignable?  From what I understand, yes, both legally by it's own terms and in everyday practice.  There is a specific paragraph in the standard CAR purchase agreement, as @Bryan Zuetel correctly stated, that provides that any assignment must be consented to by the seller via a separate written agreement.  CAR even has their own assignment agreement you can include with the CAR purchase agreement, and this is what a escrow company generally needs to do an assignment.  Some escrow companies prefer to use their own assignment form, and it's always signed by the seller because the escrow companies are used to the CAR purchase agreement that requires seller consent.  The CAR purchase agreement is assignable, and CAR even has their own assignment agreement to do this.  The assignment-friendly escrow companies I know of do assignment escrows all the time with these CAR forms.

2. Is wholesaling illegal in CA?  As other lawyers have stated, it's complicated and it depends.  You should consult with an attorney familiar with the legalities of wholesaling, what the B&P prohibits specifically, best practices, etc.  There are certain practices that should keep you from being under the CBRE/DRE's radar and you should strictly follow them, but there are always risks no matter what.  You want to reduce the risks as much as possible by using certain contractual terms in your agreement, being transparent to all parties about the assignment and what that means, how you structure the transaction, etc.

The 60 days starts running on the day the tenant is served the notice.  Then you count down 60 days from that day.  On the 61st day from when the tenant was served, if the tenant is not out, you should proceed with the eviction.

Also, you should at least attempt to serve the tenant personally or by a substitute (other adult at the home or business) before doing the mailing option.  Consult a lawyer with experience on evictions for more details on the 60 day notice, how to properly serve it, etc because it can be quite detailed.

Here's a tip: I've been doing evictions for quite a while now.  The best way to serve a tenant, if your local sheriff offers this service, is to have the local sheriff department (usually called a "civil division" or something similar) do it.  At least here in my area of Central CA, they do it really cheap and they have a uniformed officer serve it on the tenant.  They mail you a proof of service.  This helps if the tenants are violent or uncooperative (even the worst tenants don't screw around with a uniformed officer in my experience), and additionally a proof of service by the local sheriff holds up well in court later if you have to proceed with eviction.

Feel free to PM me if you have more questions.

You definitely need a title/escrow company to handle the transaction.  Find one in the County where the property is located and they will simply mail you everything to sign during escrow.  It's also good to have a real estate lawyer draft and review/advise you on the purchase agreement before submitting it to the title/escrow company.  Doing this will generally save a lot on what would otherwise be spent on agent commissions, but remember that the lawyer is not your agent so once they draft it and advise you on how to proceed, it's basically up to you to complete the transaction by negotiating with the seller during the escrow, giving the escrow company the forms they need to proceed with everything, etc.  Agent's make a relatively large commission because handling all the headaches of the two competing parties during an escrow oftentimes amounts to a full time job, especially with a cash sale where everything usually moves very quickly.

Good luck with your deal!

Wholesaling in SoCal is a tough gig right now.  Finding an advertising/lead niche is pretty much the only option realistically, because you are competing against so many well-established high-volume wholesalers already advertising in that area.  They've figured it out over many years, what lists work well, which lists don't work, which neighborhoods work well and which don't, etc.  Starting from the bottom is tough, practically speaking.

As far as attorneys, I've noticed a surprising amount of RE attorneys don't know anything about wholesaling.  Your typical "big box" law firm attorney will oftentimes have no experience with wholesaling, so it's important to ask and get a feel for them.  Asking upfront "how many clients of yours actively wholesale and do oversee/advised clients on how to legally wholesale real estate?" should filter them out.  If they sound confused, move on.  If they can give you answers relating to the dangers of violating the B&P Code, how to mitigate these dangers as much as possible through the way the contract is drafted, how to find a wholesale-friendly escrow company, what contracts are required for a wholesale, etc... then you found the right one.

Whether you are legally required to disclose that specific thing may vary from state to state.  I'm pretty sure in CA that the standard CAR disclosure forms specifically asks if repairs were made, so you may be required to (check your disclosure forms carefully).

Whether it's smart to do so or not is unambiguous and doesn't matter what state you are in. Disclose it. It keeps you from being sued later for nondisclosure of a material fact. If you are in a hot market, it shouldn't effect the sale. In fact, if you think it's a big issue, just include a statement in the "agent only" portion of the MLS listing that briefly explains the repaired issue. That way any agent that shows the property will mention it to their buyer and if it's a deal killer it will filter out those buyers right away.

I've seen this done with a property where the homeowners were murdered 5 years prior. In CA you only have to disclose deaths for 3 years, but they disclosed anyway because they were smart (you could easily Google the address and find details of the murder, so yeah it was a smart move on their part). My buyer was smart too, because he didn't care about the death at all and got the home for a nearly 20% reduction in the listing price, then BRRRRed it.

Disclose!  The more disclosure the better.  It's very purpose is to protect you legally.

Well, title companies will probably not provide you with an escrow, nor issue you a title insurance policy, if it's an auction.  That makes sense.  But I am pretty sure they will do a title search for you for a small fee.  I would ask about this specifically.

If not, welcome to the risks of buying at auction.  I've heard nothing but horror stories, personally.

Serve a 60 day notice to them.  You don't have to have "cause" to do so, as others have mentioned.  But, I would not recommend the 3 day notice to vacate (which requires good cause) because courts in California have high standards for what meets "good cause" other than non-payment of rent.  Basically, if they are "materially damaging" the property or blatantly violating a specific term of the lease (such as if the lease says no drug use but they are using the property for regular drug parties for the entire neighborhood).  Hording sucks, but its not the same as material damage.  A 3 day notice will likely not be deemed proper by a court anyway and you'll have to start back over with the 60 day notice anyway.  Don't waste the time, just serve the 60 day notice and if they are still there after 61 days, have an attorney file an unlawful detainer suit against the tenant.

Legally, child support trumps virtually all other debts/liens on a property, so it must be paid.  Talk to a local title company and they should be able to help you figure out everything about this lien.

I've seen people have success with purchasing distressed mobile home parks and renovating them.  However, whenever someone looks into developing a new mobile home park, the costs of zoning, applying, developing, constructing, etc tends to far outweigh any profit potential.  It may be possible to make money with development, but I haven't seen it personally.