All Forum Posts by: Rick H.

Working this backwards, what I see is a 3rd party trying to benefit from another’s house via rental cashflow, 

My only business is 30+ years as probate estate and trust lending in CA. I see many situations where one generation wants to buy out a prior generation or, more typically, siblings. Mom’s estate plan should probably address this separately from you. 

Private (hard) money might help with renovation but will be pricey. Not sure what you’re bringing to the table beyond willingness. Could/would Mom be willing to add you to title and you both sign for a mortgage, once renovations complete? Should your mom pass away before you, the loan could not be called due, 

I started working foreclosures in 1978 after a one-day seminar. There are SO MANY sub-niches to dealing with distress real estate. It’s not for the casual, would-be investor.

However, your BEST investment is always in your own education. Remember, one way or another you’re going to get an education. 😉  Lack of investment capital (money) ought never be the obstacle because if the deal is right, the money will always appear.

Then, you’ll need great data sources both for identifying opportunities and confirming the facts. Most every newbie will stretch the truth by being over-optimistic.

I stopped teaching in 2011. Too many flakes and dream merchants (using my material to teach while stealing your wallet and offering to help you look for it!).

Obviously, the rules will differ from state to state.

The most successful buyers have trusted bidders with cashier’s checks in multiple denominations (for cash sales) and the actual buyers have field runners and people to monitor multiple prospective properties at a given time and check sales status for postponements due to BK, etc.

This is the case in larger metro markets where many properties could go to sale but few do so.

There are often better ways to acquire properties then auctions. Since you will likely buy one at a time, work “upstream” to find problems earlier, sift and sort, then work with the prospects that show promise.

My email feed brought this discussion up, again.

I’m perplexed at how some posters read too many things into other’s posts. 
@Don Konipol has it right!
While there is money in polishing turds, early note investors should focus on solving problems that they have some experience in resolving. 
A non-performing note is unlikely to produce cash flow but profit can be harvested from enough protective equity. However, you’ll need to kill the cow to make the stew. 
Not mentioned, is recognition of other opportunities that a well-secured note may provide strategically, if placed well. Eg., I’ve occasionally foreclosed on notes merely to clear title.

If you’re looking for a reason NOT to take a particular action, you will always finds it 

Although I started investing in foreclosures in ‘78, I didn't buy my first Note (a 2nd DOT) until 1989.
What a wonderful, wild ride that was! 
Could not have anticipated all the problems and I had yet to invest in Note education. 
I would NEVER trade that experience for anything, despite the hassles. 
The toothless homeowner taught me so much about humanity and character as well as what people are will to do and say to keep their house. 
BIG LESSON: Know what borrowers are capable of doing when in fear mode. Be a Boy Scout and Always Be Prepared. 

My probate expertise is limited to the many THOUSANDS of deals that I’ve done in California since 1978. Otherwise, I’m ignorant of other state laws.
However, fact patterns are frequently similar and and become easier to resolve (or run away from).

The property is subject to competing spousal claims. Had a number of these before. Obviously, seek marriage certs and death certs for starters. Are there competing probate petitions?
Wonky Wills?
Are both parties represented by legal counsel?

Also, if I recall Texas law (oops, see above) it’s only state that I think imposes a statutory stay on foreclosures pending probate. That’s a problem if trying to enforce a security position as a lender or Noteholder.

You may gain control but economics will dictate structuring a deal to pay the problem spouse something as a “lovely parting gift.” 

This has been our primary business for well-over thirty (30) years, but in California ONLY.

Few posters here are attorneys, let alone licensed to practice law in Hawaii. Hawaiian real estate law differs from other western states significantly, mostly due to its monarchal heritage and the Bishop Trust influence.

The basics are the same as would be in California; determine the condition of title ownership (individual(s), estate (including conservatorship, if appropriate) OR fiduciary acting for trust.

Use a qualified private money equity lender to make a loan sufficient to buy out the cash-only beneficiary

The legal community in HI and Big Island in particular is small. Attorneys are very tight with title insurance companies so you won’t have to look far. 

Best to structure and treat as if a property management company from the start.

Think like an institutional lender/servicer. Does the request pass the sniff test? 
Lender/servicer will have a policy in place. Your challenge is to make your request seem like it’s part of their regular, bureaucratic tasks. 

Designate someone in your office to be the “Suzy” that talks like a low paid employee who is indifferent to a result and is the one who requests for her mgmt company.

The dangers of relying on getting your generic “what-if” questions answered here is that it has a high chance of being answered by someone (in another state) guessing what would occur.

In CA (my state), mortgages are generally not callable merely on death of borrower. The exception is a reverse mortgage which have breach terms that include death of last debtor on title or a surviving spouse.

From a practical standpoint, mortgage lenders and their loan servicers are not looking for a reason to accelerate (call loan all due) but may be triggered by poor admin practices of sub-2 buyer. If called due (I’ve done several thousand probate deals and it’s happened exactly once because of my early lack of training 40 years ago) you will run the risk of needing to pay of the old loan by refi or selling.

Trying to “take over” a vacant property that appears abandoned is not for the untrained would-be investor. Especially anywhere in California, and particularly Los Angeles county.

Talk to longtime neighbors who might know story and whereabouts of owner, but don’t accept as fact.

I’d start with researching who the record owner is. If you don’t have access to title company services, go to Norwalk recorder’s office and “chain” out the ownership and open mortgages. Check out the property taxes to determine if defaulted and address where bills are sent.

Owner could be alive, living nearby or in a facility (?) or shipped to parts unknown. 
Or deceased. I always check probate courts for estate filings and possible Conservatorship of a senior.

Another possibility is that ownership has already changed and title held by entity, just waiting to take next step to rehab, demo, assemble other ownership, etc.