All Forum Posts by: Account Closed

Originally posted by Tim B:

I've used attorney title opinions instead of title insurance in the past - however buying a foreclosure I'm MORE concerned about undiscovered liens or clouds on the tile.

In Minnesota an opinion is a fraction of the cost of insurance.

Anyone else used attorney's opinions - what clouds on title could they miss?

Almost anything. The reason it is cheaper is the liability to the one giving the opinion is nill.

Title insurance, like all insurance, is never considered expensive when you need to file a claim.

I always buy title insurance. No exceptions.

Originally posted by Jeff Fairchild:

Ok, so I want to offer to buy from tired landlords. First off, I've heard advice to offer to least option from them. Is this the best strategy or should I simply ask if they are interested in selling and make a terms and a cash offer for them to choose? How do you do it?

In the last few months I've done multiple master leases on apartments with an option to buy. With landlords who are just tired of being landlords, a lease is a very good way to solve their immediate problem. With the option in place, you can turn the property around and exercise it if it makes sense.

I usually get the seller to carry a few months of payments while I get the turn around started.

Originally posted by Klyde Waggsdale:

I am looking at a property that has a negative cash flow, but the tax savings through deducting my losses and depreciation more than make up for the negative cash flow.

That is almost never the case. Tax deductions mean you take a $1 and turn it into 35 cents. Not a good deal. If you are including depreciation in there, that has to be recaptured when you sell. If it has negative cash flow then the discount is not deep enough. That is a bad strategy. Selling at 10% over what you paid is less than a 2% gross per year return. You will have costs to sell and they will eat up most of what you think you will gross. Your tax savings won't make up for the negative cash flow because every $ of negative cash you put in will come back to you dressed up like 35 cents at best. Then you will have to recapture the depreciation and NO ONE knows what the recapture rate will be in 5 years. It might be MORE than you are getting back in saved taxes today.

Couple that with the spike in inflation we are going to see later this year lasting well into 2011 and you are really losing money.

You should pass on this deal. There are some really great opportunities out there but this is just not one of them.

I predict if you buy this you will be in very dire straights within 6 to 9 months.

I second that along with Fisher, Geltner, Freshman and Morse.

Originally posted by No Name:

If I bought a house "subject to", leaving the original mortgage in place, and getting the deed signed over to me, can I then re-list the property and sell it ? If so, will my purchase price be disclosed to the new buyer ?

Not unless you disclose it or they check the tax stamps in the public record.

Originally posted by Jason F:

They will get notice because they are named insured. Will they care, especially right now, probably not.

On the sub-2's that I've done I've never changed the insurance. Mainly because it was a quick rehab and not a long-term hold. But then again, I really dislike insurance to begin with.

Once you take title, even for a "short" period of time if you just leave the old policy in place you are not insured. The insurer can and will deny the claim because the policy does not reflect the risk. They sold the owner an owner occupied policy. Once the property is sold, it no longer meets that condition.

You might do this 1000 times with no problems but if/when you need to file a claim on that policy it will be denied if the adjuster does even a minimal investigation.

When that happens you are likely to be sued by both the seller and the lender. And they will win.

Get a new policy reflecting your ownership as a non-owner occupied policy, either landlord or for rehab and resell. It doesn't cost much more and in this environment lenders are loathed to call a loan due if the payments are being made.

I do send the letter John was talking about and in the past it has successfully stopped a lender calling the note.

BTW, on the trust issue with the original owner having a minimal ownership interest giving some kind of magical protection -- Just not the case and there are some cases winding through the courts clarifying that fact. If you use a trust, there isn't really a need to keep the owner involved as a beneficiary at all.

I've already given my opinion.

As others have mentioned, that's a lot of money just to join a REI group.

From what you have written you have a great starting position. The library is a great place to start. This site and others are great places to start. The point is when you are starting, there is something to be learned from anything you come across related to real estate investing.

The only thing keeping us ever more dependent of "foreign oil" are the left-wing whackos.

The US has known oil reserves exceeding the identified reserves in Saudi Arabia. It is suspected we have oil reserves matching the reserves on the Arabian peninsula. Yet, we aren't allowed to tap our reserves in the Gulf of Mexico, off the California coast and in Alaska.

We have the largest known reserves of natural gas in the world but are limited in our ability to tap them because of purely political reasons like we have with oil.

We aren't allowed to expand our use of nuclear power either. Never mind that no one in this country has ever even been made mildly sick due to a nuclear reactor accident. The whackos who don't understand it stand in the way of using the best alternative to fossil fuels currently known to mankind.

But, the energy source we have in the most abundance is coal and we have the technology to use it without polluting the atmosphere. Yet, we aren't allowed to do so and Obama the Chosen One wants to bankrupt the coal industry to encourage renewable alternatives.

We are in very interesting times indeed.

Originally posted by Robert S.:

there is a comercial building that was appraised 18 months ago for approx. 780K. due to a distressed situation it is available to be purchased for 300K. it currently has 4 tenants which generate 4,200 per month and there is on vacancy. taxes insurance and utilities are paid for by the owner and are approx. 30K. what is the amount of mortgage that this building could support and what is the formula used to determine that?

The owner is paying the taxes, insurance and utilities? and those total $30K a year?