All Forum Posts by: Rick H.

Maybe @K.Marie Poe will catch this thread and post. She indicates that she has lots of experience clearing this type of title matter.

Also, you might think outside the box regarding your intentions, that is, how you intend to benefit from possession of the land parcel next to the one you've already acquired. Do you, absolutely, positively have to have clear title? For example, if you intend to use it as a parking lot, your need for clear title might be less than if you wish to build on it with permits, insured bank loans, etc.

You might also discuss with your title officer what they would accept in order to insure and pass title. Maybe they would accept a QC Deed or release from officer of defunct corporation (a defunct corporate officer), as to no claim of interest upon title. This will give you the parameters for your task at hand.

Lastly, it may just come down to economics (no surprise here!). Most always, a $10,000 dent on a $500 car means a trip to the scrap yard. However, I've watched historically important cars (vintage racing Ferraris, for example) be restored from a heap of burnt tubing, with a good serial number, to a gleaming jewel worthy of exhibiting or historic racing...at a cost of $1MM +.

@Brian Pyle - Is the bene on the 2nd a private party? If so, you'll probably want to use Accurint, Merlin ir similar software to locate your party or a professional skip tracer.

Then incorporate a different negotiation strategy than you might for an institutional lender. If so, the loan was probably 'real money' from their checkbook and they'll likely respond better to an offer to give them something more than a game show host's goodbye (a lovely parting gift).

An alternative to foreclosing on the 2nd is to file a QTA (Quiet Title Action lawsuit). I'm not familiar with Alabama statutes however, in my state, CA, I can clean up title for $5-10K, if the respondent defaults (i.e., 2nd bene does not show up to court).

Keep us in the loop by posting an update or or two this forum please!

OK, the real story on Zaca Ranch. @Brian P. is right that's I have no cattle. It's actually a preserve and retreat. Was formerly owned by entrepreneur and founder of the Sizzler restaurant chain, Jim Collins. I bought it because I feel unusually strong creative energy whenever I'm there (no kidding, I can't explain it).

Unlike most ranches, it's used as a meeting place for my private conferences and mastermind groups. We've also had parties there after the Foreclosure Forum reunions.

Shanequa J. - This was in 1986 or 87. Interest rates were still high for the time but coming down lower than they had been. I had acquired the property, recorded the deed perhaps 6 months prior and was then using the property as my residence.

I received the dreaded letter: "...It has come to our attention...). Now, as a lender myself, I know that letter to be called a 'breach' letter, and specifically, a 30 day Notice of Intent to Foreclose. I tried refinancing with a bonehead mortgage broker who could not perform (that was terrifying) and called the bank (American Savings, forerunner to WaMu) who was delightful to both work with and gave me a better rate!

After a few years of being around this stuff, one gets desensitized to the threats and recognizes that what sometimes seems like bad news can be good.

@Jake Kycheck - I don't disagree with your comment about wholesaling being an example of the inefficiency of the market, however, that's really not a bad thing. Would a more efficient market require ALL real estate sales to be brokered? How about eliminating brokerages? And what about trustee sales? Auctions? Other forced sales?

I think a good example of a situation where wholesaling makes sense is when a seller has two many issues or the asset that they wish to sell has multiple problems or the required timeline to liquidate is too short. Or the seller has had real or perceived negative experiences with real estate agents and prefers to work with/through someone who understands that "as-is" means as it is now with no room for grinding.

My probate liquidity business flourished into what it has become because, in part, I recognized that part of the market doesn't want to, or know how to, deal with the mainstream of agents. Despite having a CA brokers license for 20+ years, I've never used it to list and sell a property, either my own or clients. No have I been a wholesaler, but I've used the services of wholesaler friends to liquidate my estate properties, when appropriate. I'm glad there's a role for wholesalers and a profit spread to match the value added.

@Andrew Mackey - yes, you have an opportunity; probably many opportunities, if effectively exploited. I'm surprised more people haven't inundated you with offers to "be your best friend" by now.

I don't know what conflicts of interest you might have with your employer(s) so I'll leave that for you to address/navigate.

You are essentially one of the best poised 'cat seat' folks as a field rep. You are aware of the assets, the problems with the properties, occupancy status and even to some extent the motivation/desperation of the lenders, servicers and asset managers who put pressure on you to get reports to them.

You're also linked to other field reps./associates who similarly know their respective areas.

How to best monetize? Become a rehabber? A lead generator/bird dog? Central info point for other field inspectors? Conduit for real estate investors and agents to connect with asset managers? I think the opportunities are extensive. You have a valuable commodity (early information) so I would be very careful how and who you share it with.

@Tara Brown - yes, you've caught me! My marketing to attorneys has historically been to provide liquidity services for their probate and trust clients, not real estate services, per se.

@Sean D - I've purchased many, many subject-to deals over the years and if your concern is about getting sued later, it might as well go in the category of 'things that go bump in the night.'

If I take a chance and try to read between the lines, can I guess you're really asking:
"What is the primary risk in buying a subject-to deal?".

If so, unless you become a rent-skimmer under a Government insured loan (collecting rent but not paying the mortgage) you have little to be concerned about.

I think your true worst case scenario, besides making a poor deal, is the loose-end possibility that that the lender or servicer may call the loan under a due-on-sale clause. There is no due-on-sale jail, however a lender could demand the loan be paid off. Unlikely in this market, but it has happened in the past. Talk to seasoned investors of 20+ years and you'll find a few who've had to refi or pay off loans called by their lenders. It happened to me and, although initially terrified at the prospects of foreclosure, the bank ultimately refi'd their loan...at a better rate!

If your real concern is due-on-sale, getting sued by the former owner is not a risk to be concerned with. You can always disclose in your purchase and sale agreement the risks associated with a subject-to and the remedy.

@Cameron - The real estate investment community is very strong in San Diego county. I suggest you attend and join one or more of several real estate investment clubs.

The largest (and oldest) is SDCIA which meets once a month at the Scottish Rites center. It's not unusual to see 300 - 500+ in attendance. Great group lead by my friend Bill Tan.

Another group is North San Diego Real Estate Investor Association, which also meets monthly, in the Vista/Oceanside area.

You can be reassured that neither group is a "pitch feast" and I try to attend when I'm in the area staying at my North County ranch.

Both groups have traditions of a large number of folks having dinner at a nearby restaurant before the meeting. I enjoy many friendships of people that I've met at both groups.

@Kelly P. - not sure about your logic as to why a secured lender would want to discount their mortgage, given the numbers in your example. Probably why you walked.

An active probate wil not, in most states, hamper a foreclosure. Therefore, a mortgage lender without a breach (payment default, etc.) who is well secured with a marketable property has a number of profitable options that don't require discounting.