All Forum Posts by: Tom Gimer

Your tenants will be the youngsters and their child. Your guarantors will be the parents. Good luck.

@Wayne Brooks If wholesaler contracted with the owner of record, who later turns out to have obtained title illegally, it's not so cut and dry.

And further, had the title company followed the (claimed) contract terms and done back to back closings, wholesaler might have title insurance (and counsel) to protect him here.

@Al Pekerman You are right. That is a nightmare. Sorry. Time to hire an attorney.

This is most certainly NOT the title company's responsibility.  It is your responsibility to properly address the insurance proceeds issue in your sales contract.  Consult with/retain a local real estate attorney.

Your question focused on the right entity choice based upon the number of business partners, presumably in a real estate investment business. You got answers concerning tax classification. LLCs are great for real estate investment because they — more than any other entity type — allow for real creativity in management and ownership structure. Partner 1 can put in money and time, partner 2 can put in time and knowledge, partner 3 can put in IT, partner 4 can put in a valuable existing relationship, and so forth... and they can all agree in advance as to management, ownership percentage, voting rights and so forth. Not so easy with many other entity types. If they agree in advance as to the value of what each brings to the table, 7 partners can easily afford to pay an attorney to set an LLC up properly, including its tax classification.

One of the most important responsibilities of the title company is to identify the actual property owner(s) as well as who is/are authorized to execute the deed and other settlement docs. Sounds like somebody on the title side screwed up royally here. Were you dealing with the PR of an estate? Agent of a company? More details please.

I would never use the seller’s title company. That’s a bad reason to have your choice forced upon you. It’s incredibly important for the person/company who conducts the title search to be thorough, accurate and experienced. Unfortunately the industry is full of unqualified people. I would want my own title company — along with the vendors they continuously put their faith in — conducting all aspects of my transaction.

Likely. There is no limit to the number of LLC members.

While there may be some background research in evaluating deals, "clearing title" doesn't happen until the title company is ready to close your transaction. 

Obtaining and reviewing a title search is not the end of clearing title. It may give you a good idea of what's going on with a property, but that's certainly not the end of it. Let's say you identify a target and buy a title search from some online-only search company (ptooey). The title report identifies 2 potential liens -- a mortgage and a judgment. In order to clear title you'll need more than written payoff statements from both lienholders (oh, the seller hasn't paid his mortgage in 6 months -- he didn't mention that!) ... you'll also need a tax cert, water bills and any other payoffs potentially affecting title. Some sellers are clueless as to what they really owe to get out of a property.

The best way to "clear title" as a buyer is to avoid getting yourself in a title mess by wholesaling a deal that can't close. You do this by requiring (as others have mentioned) clear and marketable title from you seller as a prerequisite.  The right contract forms are invaluable in your trade.

Ah -- Florida. A Certificate of Title will be recorded rather than a deed. No warranties. Check the county website for terms of sale.

Real estate Tax IDs are likely those of the entire cooperative rather than the individual units.  The cooperative is billed for the entire amount and tax bills are paid -- to the cooperative -- through monthly maintenance fees. Sounds like you have 2 unit 1As in different buildings.