All Forum Posts by: Mark Gonzales

Originally posted by @Account Closed:

Sounds like you hit the jackpot. There has been a material change in your property . I would read over your sales contract very carefully Are their inspections, appraisal loan contingencies? Whatever the results might be contact an attorney and inform escrow that you are canceling the agreement. 

It is up to the buyer to due proper due diligence  when purchasing a property   so the answer to question #2 is probably no . Contact an attorney asap Good luck you have a 4 plex.

Thank you for the insight Steven, 

Is there any negative repercussions for breaching the sales contract with the prospective buyer and cancelling the agreement as the circumstances have changed? As of right now, I think that's what I'm worried about most. A lot of research still needs to be done about the so called surprise duplex and identifying what needs to be done in order to move forward. One step at a time... :)

SO I guess I should start at the beginning when I purchased this property back in 2017. 

I am located in Southern CA and at the time was looking to expand my out of state real estate ventures when I purchased this duplex from a turn-key provider (which will remain nameless at the moment). It was an overall smooth experience but there were some things that were left out in the process as they claim to provide EVERYTHING which included financing, along with property, and property management, etc. 

2 years go by, and everything seems smooth. It is now present day and I decide to sell the property. 1 side of the duplex is vacant and the other is occupied. I received interest from multiple prospective buyers. I receive another offer 9/1/19 and decide to accept. 9/2/19 It is made aware that there is a second duplex on the same parcel that I appear to own. I was completely unaware of this. I have no idea who owns the 2nd duplex, or who is receiving rents from these tenants. I contacted title and it looks like I do own this second building, which caught me by surprise as the appraisal, lender, and all other documents disclose one duplex-until I pulled the property profile with the title company. Both buildings were built in the early 1900's and it seems as the parcel was intended to be split but the proper paperwork was never completed, therefore both duplexes still sit on the same parcel in 2019 which I legally own. See below photo:

Questions - 

1. What are my options, as far as breaching the contract, 3 days after signed agreement? I was told I could get sued for breach of contract. 

2. Who would be liable in selling me a property that was not properly described at the time of purchase? I mean, there is a 2nd duplex that I was completely unaware of? Would this be an error that lies on the turn-key provider? Title Company? Someone else? 

Im currently seeking legal counsel to see what my options are in order to move forward. I had my property management knock on the door of the second duplex, to see where the rents are going. The tenant on 1 side of the duplex claims he sends payments to a P.O., but did not provide much information. We asked them to provide a Lease agreement so I can backtrack and see who "THINKS" they own the property. Not sure if the other side of the duplex is occupied. For all I know this could be a squatter situation.

Im not sure where to go from here, but I appreciate any advice. If you are someone associated with Real Estate Law in Indiana, I would love to hear from you. 

Thank you, 

Mark

@Shawn Ackerman I've started analyzing several deals in southern California where I'm more familiar with the market. I'm mainly interested in cash flow/Rents/ROI as well, and also with the intention of selling a few years down the road in order to grow. I've been finding deals that can generate a 13-15% ROI, and a couple properties that are looking like 20% ROI . Of course this is just a rough estimate and with 20% down I'm looking at approximately 70k. What I've been researching is if it would be more beneficial to invest in a cheaper market so i can increase the quantity of properties. Ill have to keep researching.

Thank you For the advice @Rebecca Knox :) Im looking forward to the process.

Shawn Ackerman thanks for the Info. I actually just started the UBG after hearing about it on the BP podcast. I'm definitely interested in the mid west market. I was actually thinking Idaho or maybe Colorado. I need to do a little more research for where I exactly since I would be starting from scratch as far as building relationships there. Do you have any advice for someone who is dealing with their first long distance purchase and management of their property?

Good Evening BP!

My Name is Mark. I am currently living in Downey California and will be moving to Spanaway Washington in the next few weeks. Im 30 years of age and Im pretty new to REI. I have been learning as i go as I'm sure most of us do. I stumbled into this world on accident by purchasing a completely outdated 1bd/1bath SFH (1935'ish) for 127k with the intent of holding on to it just for the write off. It was just my luck that the tenant turned squatter immediately after purchase. When things went south i put 65k in to the rehab and ended up selling for 405k. I was extremely satisfied with the sale and used the 1031 exchange process to purchase my first 4plex which I have owned for about 4 months now.

Through this process I've developed a passion for real estate and I've committed myself to learning as much as possible about REI and increasing my ROI with the goal of increasing passive income and growing my portfolio.

Im currently interested in finding multi family properties and also networking in order to invest outside California. 

Thank you and I look forward to spending lots of time diving through he wealth of information here at BP. 

-Mark