All Forum Posts by: Trent Dues

It's probably not a good idea to get too tied into a zip code, but instead focus on the actual road the property sits on and the surrounding homes. A lot of townships and small municipalities share zip codes. If you don't live in the area of the home your looking at, it may benefit you a lot to hire a realtor to send you pictures and information before you put earnest money down.

Hi Shatrice, I always like to recommend Scoot Mortgage; I've worked with them on several client deals and have had great experiences. Their main office is in Columbus, but they are licensed in several states. Their website is https://www.scootmortgage.com if you want to look into their services.

Quote from @Mohammadamin Mostaanfar:

Quote from @Trent Dues:

Quote from @Mohammadamin Mostaanfar:

Quote from @Trent Dues:

Wholesaling can have its risks, especially if you enter an agreement without the fine print specifying your liability/ who gets what earnest money in the event of the deal falling through. Have you partnered with or worked for any wholesalers that have had proven success in your area? Learning from those with a proven track record is always the best bet, but if not, just be sure to have an attorney review any contracts prior to having them signed

 Why be so careful with contracts? Any more tips on this?

As an escrow rep, I cannot tell you how many angry calls we've received after a file cancels and both parties feel entitled to the earnest money. The title company if fully liable in court to paying out escrow according to the signed sales agreement, so if the agreement isn't iron-clad on who receives the hand money following a cancellation, then we have to get attorneys involved to settle the dispute. Files don't always cancel from obvious reasons; some times issues come up during the title search or inspection period that can take months to fix, at which point the original contract expires and claims to the EMD can begin to be made.

 Well the nature of the contract can just say give me max a week and if I couldn't fulfill the sale, I'm out right? Though I see now how vital the titles are.

btw, what did u mean by hand money? 

Hand money and earnest money are synonymous, just depends what you choose to call the deposit amount. One example I can give where a legal dispute came up was after the wholesaler and seller signed the contract, the wholesaler found an end buyer who decided to use financing to fund the purchase. At some point in the process, the seller caught wind that their home was likely being wholesaled and they did not like this fact, so they had their attorney re-review the signed contract, and no where in the original A-B contract did it state that the sale was contingent upon financing, so the owners pursued legal action to back out of the A-B contract under the guise of breach of contract, when in reality it was likely due to them no longer feeling they valued their home correctly knowing that a third party would be profiting off of the sale. In this case, both parties made claims for the earnest money. This is just an example, but I'm sure if you contact other long-standing wholesalers, they have all come across scenarios where both parties felt entitled to the deposit on a cancelled sale.

Quote from @Mohammadamin Mostaanfar:

Quote from @Trent Dues:

Wholesaling can have its risks, especially if you enter an agreement without the fine print specifying your liability/ who gets what earnest money in the event of the deal falling through. Have you partnered with or worked for any wholesalers that have had proven success in your area? Learning from those with a proven track record is always the best bet, but if not, just be sure to have an attorney review any contracts prior to having them signed

 Why be so careful with contracts? Any more tips on this?

As an escrow rep, I cannot tell you how many angry calls we've received after a file cancels and both parties feel entitled to the earnest money. The title company if fully liable in court to paying out escrow according to the signed sales agreement, so if the agreement isn't iron-clad on who receives the hand money following a cancellation, then we have to get attorneys involved to settle the dispute. Files don't always cancel from obvious reasons; some times issues come up during the title search or inspection period that can take months to fix, at which point the original contract expires and claims to the EMD can begin to be made.

Cranberry/Wexford are very nice areas to own property in. I don't personally know how a short term rental holds up, but I can try and connect you with some investors that I know own property in northern Allegheny County and Butler County who have better insight.

Two things to keep in mind: 1) There is absolutely no guaranty interest rates will come down; I've seen speculation that they'll keep creeping up for several years even, so as the experts say, the best time to buy was yesterday, the next best time is today. 2)Your $50k profit will need to factor in closing costs for your sale and your purchase, so you can confidently knock around 20% off of your expected profits, unless you're planning to 1031

There is a ton to consider before choosing. Doing a cash out refi followed up by a purchase means double the closing costs. If you are using the same lender/broker/escrow company for both closings, there may be some time and money that can be saved, but you're still looking at origination fees, recording fees, transfer taxes etc for both loans. As @Taylor Dasch mentioned, a Heloc might be the better option for you, depending how much equity can even be drawn from your primary.

If the 1.40 acres is all one parcel of land, you would have to record a subdivision with the local municipality. 

If these properties are to be financed, have a discussion with your lender or broker up front about their requirements. Some lenders, especially hard money, wont lend to individuals, only to business entities, while others such as a traditional lender, may require the property be vested in your individual name. This will likely effect the rate they offer as well. 

On a side bar, each state is different with their tax systems, so be sure to research if transfer taxes will be applicable on a refinance where you quit claim the property into your personal name down the line. In PA, even if you are the sole member of the LLC, you're still paying a minimum of 2% of the assessed value of the home to change the vesting, and depending on the municipality, that could go as high as 5.4% of the assessed. That is not the case in other states, such as Ohio, where you can transfer to your LLC or personal name and only have to pay a recording fee of around $50

I agree with Joseph's statements, the first step if you haven't already done so is to contact your title company and have them check their register to confirm the check wasn't deposited. Depending on which bank/system they use, they should receive regular updates on positive funds in the account so they can follow up on uncashed checks. Unfortunately, once a check is cut from their ledger and mailed, it can be very difficult to follow up on undeposited checks, as the assumption is the check made it to its correct destination and is now in the hands of the other person or company to apply the funds correctly. If you figure each file closed mails out 6-10 checks a piece, to agents, brokers, municipal services, etc, depending on the title companies volume, they might be mailing out 100s if not thousands of checks a week, and if the check isn't returned to their office, the file is marked as closed and unless someone reaches out, no one is going back into the register.  

If the insurance agency confirmed they received the check but they didn't cash it, then that's a whole separate issue that you would need to speak with them directly, or your agent who helped fill out the insurance request to find out what went wrong.