All Forum Posts by: Sherry Norman

@Sylvia B

Re USPS - Have you not heard of Louis DeJoy, the person appointed as Postmaster General in order to slow down and ultimately ruin the mail service so the current administration is not in jeopardy of losing the election through mail-in ballots?  The person ordering the discarding of multi-million dollar mail sorting machines in order to accomplish this?  The person appointed to destroy USPS so (as has already been intimated) that it can be argued that USPS would run so much better if sold to a private individual at a bargain price.  A private person like.......Louis DeJoy!

I know of at least 2 houses in Morris County (one in Wharton, the other in Succasunna) that had more than $50k in oil remediation costs.

As far as reimbursement, last time I looked (recently), there was a 4 yr. backlog in payments.  I.e., you probably won't get paid until 4 yrs. from now.

In NJ the septic system is required to be sized according to the number of bedrooms, not bathrooms.

Kyle answered the questions re the painting of the bathroom tiles, but I thought I'd expand a bit on it for those who rehab in other locations.  I believe that the types of companies and franchises which advertise that they redo old bathtubs to look new (not the companies which reline old tubs, that is a completely different process), will also spray older tiles on the walls if they are soundly adhered.  They spray right over the grouting too, of course, so there is no need to regrout.  But like with the tiles, the old grout needs to be sound and not flaking, etc.  It's probably more expensive to do it through a separate company than to have your GC's guys do it like Kyle did, but pricing it out is the only way to find out.  I'm in a HCOL area, and I was quoted ~$6sf to epoxy paint the wall tiles a few yrs. ago.  Not by a national franchise company, but a long-established local company called "Mr.Ugly".  At the time, I wondered if it might end up costing the same to tear out the old tiles and install new.  Never went ahead with it though, so I didn't get the chance to compare.

Benjamin,

Just wanted to thank you for taking time to answer my questions, and to express my wishes for your little one's good health in the future.  We all know there's nothing more important than that.

Benjamin---great work and congrats!  I went back to flip #1 as you suggested in your OP, which also looks wonderful.  I have a couple of questions about that flip that I didn't want to post on that thread due to its age.  You promised throughout the thread on that one that you'd post your final numbers after it was sold, but maybe you got too busy in the flurry of looking for the 2nd flip? LOL.  How long did it take to sell, and did you get your asking price for it?  Also, I was curious about the windows on that one.  I noticed that someone on the thread had asked if you painted them, but upon reading the entire thread I could see you mentioned buying new windows.  However, conventional wisdom on vinyl windows is that black ones like yours would absorb too much sun and warp, especially in that hot FL sun.  Are they some type of metal  (which I always imagined to be quite expensive), or what?  Thanks for indulging my curiosity on these points, and for posting some great information on your flips.  Also, for all the pics, which are always appreciated!

Tom, with all due respect,  I feel I have to take issue w/ your statement  "and I certainly would not interfere with the bank's future efforts to dump this property".  Go ahead and call me a left winger (I am), but I think we need good regulations which are actually enforced in order to not have the most powerful entities take advantage of individuals.

Yes, I am glad I that in my case I only lost money on the due diligence.  However, that doesn't mean that I think it's okay for this bank to continue to cost people undue amounts of due diligence money indefinitely.

 In my area, institutional sellers are almost all using the online auction process exclusively to sell their REOs. Hopefully, those participating in this process have some experience and have their eyes open.  My original post was titled as another reason that I (and others who have commented on this process) hate it.  

Like I said, the seller in this case appears to be commited to continually reoffering and reselling this property until the ultimate sucker comes along to close on it.  They are legally supposed to disclose what they (apparently) know.

Why would you be in favor of their continuing to flout the law and hurt consumers?

I think some of the responses here are not taking into account the 3 day attorney review mandated by the state of New Jersey, where the property is located.  During this period plus any extensions to it, the attorneys can cancel the contract for any reason.  As far as the deposit, I had not yet paid it.  Yet another reason to hate the auction companies:  I had not yet paid the deposit b/c the auction company insisted on a clause in their contract that said that if the buyer defaulted on the contract, buyer would forfeit their entire deposit as liquidated damages.  If the seller defaulted, however, (get this), because it would be too difficult to determine damages, the buyer would be limited to return of deposit only.  In other words, buyer would get zero if seller defaulted.  Funny that it would be too difficult to determine buyer's damages, but the seller could keep the entire deposit as their damages in the event of default.  You can see why any lawyer would object to this language, as mine did.  At any rate, this explains why I did not yet pay the deposit while the property was in the attorney review period.  Thank goodness for that, since they might have fought to keep it and cost me even more money in the quest to have it returned.

The seller is in fact a bank.  However, in NJ, while seller banks aren't generally held to the same standard of disclosure as other owners, the exception is what the law calls the 3 C's.  If the bank assumes care, custody and control of the property, then a higher standard of disclosure is required.  In this case, Bank of New York Mellon has owned the property for several years, during which time they have performed maintenance, winterizing, etc.  It seems almost certain they knew something about the title problems, because as I mentioned, they had very specific carve outs and odd exceptions to the normal buyer requirement of clear title, which were not standard to their usual boilerplate contract.  And as I mentioned, three sales on the property had already fallen through, probably due to the same title issues.  

My point is really about disclosure.  If the sellers have become aware that there are serious title issues, they should be required to disclose this fact.  Without getting too granular here, these title problems are not minor issues.  A 30' wide lot being 8' or so narrower and eliminating the driveway is big.  And Mike, saying the neighbor's fence is on the property completely mischaracterizes the encroachment problem.  The HOUSE itself is more than an inch on property that it doesn't own.  It is a 2 family grandfathered in on a lot which is not even standard size for a one family in that neighborhood.  Therefore, if push came to shove and the owner of the encroached lot next door demanded removal (far fetched but possible, and the very reason why people demand it be title insurable), the lot could be denied a building permit unless the owner obtained a variance.   As I mentioned before, the issues might be resolvable with enough time and money.  And I would have been willing to take them on at a price that reflected that.

If there had been disclosure of the title issues, the hammer price would have been very different.  While due diligence is always necessary, disclosure of known defects is and should be required.  In this case it would have saved a succession of buyers, and who knows how many future bidders, thousands of dollars.  And maybe it would save the seller bank from a future lawsuit from a bidder who closes and finds the title defects later. 

All this to say, there are good reasons to not participate in online property auctions.  At least in the sheriff's sales, the auctioneer is not engaged in trying to hide things from the buyer.  In this case, the fact that the bank was ready with their very specific title language as soon as the contract was delivered shows some evidence of knowledge they failed to disclose.

Well I was the high bidder on the 2 family property at 46 Harrison St. in Morristown.  While the sale was still in attorney review, the attorneys for the auction house tried to impose a contract with all kinds of odd exceptions and carve outs that they insisted the buyer accept on the title insurance.  Turned out after I pulled preliminary title work, and had my surveyor look at the public records, the driveway that was supposed to be included on the property had apparently been deeded away.  The driveway is crucial to value in this town,  an area where on-street parking is restricted.  Not only that, but my surveyor said it appeared that the house was encroaching on the neighboring property by a couple inches!  None of this covered by title insurance b/c seller won't allow it to be required for close.

Next was the task of trying to talk to someone at the auction company who understands the import these issues have on the value of the property.  The auction process is so far removed from the seller that it seems nobody at the auction company has the authority to discuss a price reduction that reflects the depressed value that these issues represent to the house price.  They are issues that probably could be resolved is some way, given enough time and money.  But the auction company says the seller won't reduce the price at all.

Given that I had already spent around $1000 on preliminary title and survey,  I offered to get full survey and title work done to prove to seller (although it seemed like they already knew b/c 3 deals on this same property had fallen through previously), provided that the seller would agree to pay for it if we couldn't agree on a price reduction after that.  No soap.  So the seller intends to put the property back up on its auction site without disclosing these issues.  And each buyer in turn will spend way more than necessary on due diligence until a sucker who doesn't perform due diligence comes along and buys this property worth way less than it appears.

I'm wondering if the Real Estate Commissions in the involved states (NJ for the property, CA for the auction company) allow this kind of non-disclosure?

@Jay Hinrichs  While I'm sure you mean well in your post, I feel compelled to respond to the manner in which you're dismissive of my deal with your "plenty of deals out there" comment.  It was based on the very few facts I posted describing the deal, I guess.

Yes, there are lots of so-called deals out there, most of which I would not pursue. I see these deals being offered all the time to the naive by the vendors (and pushed by the founders for the fess they're getting) at the area REIA's, and by others looking for buyers who possibly don't know the business or the local RE markets that well. Yes, I'm going to say the following even though it will be regarded as anathema here. The fewer legitimate deals there are, the more what I think of as the "Real Estate Investment Promotion Industry" grows. The old chestnut seems applicable: Those who can, do. Those who can't, teach. Again, this comment will not be well-received, but I am seeing the self-styled gurus and late night commercials of people who are capitalizing on their having been on some HGTV show for 6.5 minutes 10 yrs. ago proliferate in a way that reminds me of the last RE phase before the meltdown. Not saying we're in a bubble, mind you, just that there's a lot of promotion.

Please don't blithely lump my exhaustively researched, less than 50% cost to (a thoroughly documented) ARV (if negotiations w/bank work out, if not then I don't buy) deal in a town known for one of the best school systems in the state, 12 mi. from/ and on a direct train route to NYC, and where well-priced houses are selling in days, with all the other deals out there, many of which I see being financed.

All of which is to say, I guess, that I'm very careful and don't want to be grouped with those who are not.  I realize you don't know me, Jay, and so have no way of knowing whether I am or not.  All the more reason to not automatically lump my deal into the category w/the latter.