All Forum Posts by: Ivan Correa

I have 2 deals I'm looking at

1 is a 2 family and 1is a 3 family. The 3 family is in a rough neighborhood prime section 8 real estate, 2 apartments vacant 1 occupied. The 2 family is in the best part of town both units are occupied.

The 2 family is asking for 74k with a current offer of 80k, tenants won't allow access and were not sure if they're paying rent, home needs about 10-15k from what we could see and its worth about 130k. Unit mix is 1 2 bedroom and 1 1 bed

Rents are currently 750 for the 2 bed

And 500 for the 1 bed.

Should be 800 for the 2

And 600 for the 1 bed

The 3 family is asking 74k and would accept 67.5k

The one apartment has a tenant that has not paid for a year and the moratorium dosent expire until the 10th of June . The Unit mix is 2 2bedrooms and 1 1 bedroom.Needs about 20-25k and thats adding a big cushion to be rent ready ARV is 100k .

Rents should be

2 bedrooms 750

1 bedroom 600

I don't know how to get these tenants out if I inherit them any advice would be great. Hard money is willing to lend on these loan 80/100 at 9.5% 3.5 points on each 20% down .

Income once stabilized should be $3450 month

Net income saving for Capex, management etc is

$20,700

Money out of pocket is $22.4k for the 2 family

For the 3 is $18.9k total is $41.3k

Arv 130 k + 100k

Refi would be 70% arv

Full loan would be 146.2k

Cash out is 70% is $161k

Cash left in the deal would be $26.5k

COC =75%

Fear is the issues with inherited tenants and the moritaroum. Is this a deal I should do any advice I would greatly appreciate anything I should ask or forgot to mention please let me know.

Originally posted by @Natalie Schanne:

@Ivan Correa - sorry to hear about your situation. Are you able to rent / Airbnb it furnished / staged while you file the claim? Or do a lease to own type plan? (Remember to disclose fully).

Will the title company pay your legal fees as part of your claim? If so, I would hire the respected attorney. I’m under the assumption that if you buy a property with title insurance and when you go to sell it, you don’t have marketable title, then you can sue title company 1, which should have alerted you of these issues and/or resolved them before allowing the deal to go through.

I have a friend who got a sheriffs sale property with unmarketable title and while he works out the problems, he is renting it for a good cash flow.

 That would work but it hasn't been rehabbed and its inhabitable in its current condition. 

Originally posted by @Jay Hinrichs:

Originally posted by @Natalie Schanne:

@Ivan Correa - sorry to hear about your situation. Are you able to rent / Airbnb it furnished / staged while you file the claim? Or do a lease to own type plan? (Remember to disclose fully).

Will the title company pay your legal fees as part of your claim? If so, I would hire the respected attorney. I’m under the assumption that if you buy a property with title insurance and when you go to sell it, you don’t have marketable title, then you can sue title company 1, which should have alerted you of these issues and/or resolved them before allowing the deal to go through.

I have a friend who got a sheriffs sale property with unmarketable title and while he works out the problems, he is renting it for a good cash flow.

Natalie yes that's what title insurance is for to insure your title for things they missed.. and YES they pay all the attorneys fees.  The only time you would hirer your own attorney is if the title company refuses to defend your title and you think they are wrong. 

I just had a landlocked one go almost 3 years  neighbor fighting us state of Oregon fighting us.. and the attorney worked it out but it took a Looong time.. and the legal bill had I had to do this I am sure would have exceeded 50k..   But really title claims are fairly rare. having done well over 3K transactions as a lender / buyer over the years and its probably higher than that never kept count.  We have made I think less than 5 title claims..  2 I know were for access title company missed that we were landlocked..  both times they worked it out.  I had one in INdy last year were the house had a red tag to be demo'd and the title company missed it..  They paid us off  .  

I think one issue is these things that do get missed are going to be more prevalent for the buyer who simply takes the attorneys word for it and does not review the title commitment themselves or have a good realtor review it for them. Out in the West here we don't use attorneys per se we use escrow officers and title officers and we are provided the title commitment usually within 3 to 5 days of opening escrow we read it and we also have to initial that we read it as part of the settlement procedure/ closing procedure.. So when I am doing my east coast stuff I sometimes shock them when I tell them I need to see the written title commitment before I am going to close or fund.. 

Every investor or buyer should do this.. Investors just so they get familiar with what these title commitments are what to look for etc. 

there could be exceptions in their that the attorney thinks is fine but you say hey wait a minute I am not closing with that exception.

Also keep in mind certain parts of the country have far more of this buggered up title issues than others.. especially in areas were wholesalers and suspect sellers are trying to jam things through. 

So unless those title defects were listed as an exception on the title policy when the OP bought the property and paid for title insurance they are going to be covered you simply make a claim.. And remember its not the attorney insuring these its the big insurance company that they are an agent for.. this gets shoved up the flag pole to their underwriter and someone at Fidelity or First American or Ticor or one of the big insurers will deal with it..  

This is the back end of real estate that if you become proficient at you can learn how to work these deals and make some whopper deals for yourself and or keep yourself out of trouble.

Yeah my assumption was that paying my attorney he had my best interest covered but he didnt .How long does a tittle claim process last ? So I can just do this directly with the tittle company that insured it ? 

Originally posted by @Joshua Gorsky:

@Ivan Correa

Wow. What an issue. I’m currently helping a client purchase a property from a private lender who took ownership of the property via a deed in lieu.

There’s no easy answer to your questions, but from your hypothetical, one or more parties involved may have some liability.

Your hunch is right that in order to sell the Property at its maximum value, you’ll need to do your best to sort through the mess.

I’m glad to chat more about it offline to see if I could guide you in the right direction.

Where is the property located?

 I sent you  a PM thank you . 

@joshuagorsky would like to connect I have send you a PM 

Looking to see if someone can assist with an issue on a property I purchased in 2020.

I bought a Heavy reno 1 family 25X100 property in NJ . Late February early March was when I closed. This was the second property we had closed on in the same period with the same attorney . This property was getting a lot of action I ran the numbers it would be a good flip so I offered below asking, cash, no contingencies, close in 10 days. It came down to three people I was told I could win this if I used the then owners tittle company so I said sure. Tittle was ran etc. My attorney at no point in time mentioned any tittle issues didn't mention any red flags said everything was ok so we closed. The world closed down I got covid some other family members as well so time passed by and I didn't get back to it until September- October (taxes were paid, lawn mowed etc.) We secured financing for the reno , in the refinancing portion of this when tittle was re-ran the lenders tittle company said they do no feel comfortable moving forward until these issues were taken care of. My attorney reached out to the tittle company that had insured it and he was told they would re-insure it no problem. I didn't feel comfortable doing all this work just to have a potential buyer's tittle company tell me this or force a potential buyer to use this company I don't know and obviously is not good. My attorney told me to file a tittle claim and he said it would take months , I tried to place it limitedly off market at a discount and cut my losses but no bites. A close friend with colleagues at a tittle company looked a the tittle search and said the following.

(my)llc =my company

PREVIOUS LLC = the company that owned before me

THE LENDER TO PREVIOUS LLC Inc.= The name of the fund that transacted with the previous owner and seem to have some sort of personal relation to each other.

NAME = the owner of PREVIOUS LLC

Looking to see if someone can assist with an issue on a property I purchased in 2020.

I bought a Heavy reno 1 family 25X100 property in NJ . Late February early March was when I closed. This was the second property we had closed on in the same period with the same attorney . This property was getting a lot of action I ran the numbers it would be a good flip so I offered below asking, cash, no contingencies, close in 10 days. It came down to three people I was told I could win this if I used the then owners tittle company so I said sure. Tittle was ran etc. My attorney at no point in time mentioned any tittle issues didn't mention any red flags said everything was ok so we closed. The world closed down I got covid some other family members as well so time passed by and I didn't get back to it until September- October (taxes were paid, lawn mowed etc.) We secured financing for the reno , in the refinancing portion of this when tittle was re-ran the lenders tittle company said they do no feel comfortable moving forward until these issues were taken care of. My attorney reached out to the tittle company that had insured it and he was told they would re-insure it no problem. I didn't feel comfortable doing all this work just to have a potential buyer's tittle company tell me this or force a potential buyer to use this company I don't know and obviously is not good. My attorney told me to file a tittle claim and he said it would take months , I tried to place it limitedly off market at a discount and cut my losses but no bites. A close friend with colleagues at a tittle company looked a the tittle search and said the following.

(my)llc =my company

PREVIOUS LLC = the company that owned before me

THE LENDER TO PREVIOUS LLC Inc.= The name of the fund that transacted with the previous owner and seem to have some sort of personal relation to each other.

NAME = the owner of PREVIOUS LLC

Looking to see if someone can assist with an issue on a property I purchased in 2020.

I bought a Heavy reno 1 family 25X100 property in NJ . Late February early March was when I closed. This was the second property we had closed on in the same period with the same attorney . This property was getting a lot of action I ran the numbers it would be a good flip so I offered below asking, cash, no contingencies, close in 10 days. It came down to three people I was told I could win this if I used the then owners tittle company so I said sure. Tittle was ran etc. My attorney at no point in time mentioned any tittle issues didn't mention any red flags said everything was ok so we closed. The world closed down I got covid some other family members as well so time passed by and I didn't get back to it until September- October (taxes were paid, lawn mowed etc.) We secured financing for the reno , in the refinancing portion of this when tittle was re-ran the lenders tittle company said they do no feel comfortable moving forward until these issues were taken care of. My attorney reached out to the tittle company that had insured it and he was told they would re-insure it no problem. I didn't feel comfortable doing all this work just to have a potential buyer's tittle company tell me this or force a potential buyer to use this company I don't know and obviously is not good. My attorney told me to file a tittle claim and he said it would take months , I tried to place it limitedly off market at a discount and cut my losses but no bites. A close friend with colleagues at a tittle company looked a the tittle search and said the following. 

(my)llc =my company

PREVIOUS LLC = the company that owned before me

THE LENDER TO PREVIOUS LLC Inc.= The name of the fund that transacted with the previous owner and seem to have some sort of personal relation to each other. 

NAME = the owner of PREVIOUS LLC

"Upon review, I agree with most of the issues raised by the other underwriters.

The Deed in Lieu of Foreclosure and the Power of Attorney appear to have been made contemporaneously with the mortgage, and would affect the borrower’s right of redemption, and is often held to be unenforceable.

The Power of Attorney does not appear to have been used by the mortgagee to convey the property. The POA looks like it was only used to sign the Seller's Residency Certification, the Affidavit of Consideration, and the Estoppel Certificate. However, The DIL was executed by NAME as Member of PREVIOUS LLC.

There is also a break in the chain of title. The PREVIOUS LLC took title via the DIL. However, THE LENDER TO PREVIOUS LLC Inc. conveyed title to (MY) LLC. Further information would be needed as to how these entities are connected.

We would also require a deed (or multiple deeds) out of PREVIOUS LLC and The
THE LENDER TO PREVIOUS LLC Inc. to (MY)LLC. The deed from PREVIOUS LLC could not use the POA to execute it. A copy of the original mortgage from PREVIOUS LLC to the THE LENDER TO PREVIOUS LLC Inc. should also be obtained for review to confirm that there are no further issues.

Would an attorney be able to clear these up???

I reached out to my attorney and was told ;

"I would be happy to assist you in resolving this if your new title company has a new plan of action to resolve title. However, further involvement on my part is beyond the scope of my original representation and we will need a new retainer agreement for this work and a deposit on said retainer. As a courtesy to you, I have already expended significant time assisting you in attempting to resolve this issue so it is only fair that I am paid for work moving forward. I will require a $1,500 retainer and bill @ $250.00/hr plus any costs against this retainer. Any unused retainer will be returned to you."

What I am looking for is assistance in creating an action plan or being pointed in the right direction to resolve this issue so that I can clear tittle and either sell it or finish the project . Who is at fault here for me not being warned about tittle ( Attorney, tittle, me)? Has anyone ever done a tittle claim? How long does it take ? Do I have a good chance of wining the claim? 

If you have been in a similar situation or you're an attorney or work in tittle please do no hesitate to reach out I appreciate any help!

There is an empty boarded up houses on my Block which I asked the guys who boarded it who owned it they let me know it is the bank now. I want this house I’ve wanted it since I bought my home. Where can I go to find out who owns and it and what I can do to buy it ?

thank you guys I appreciated @Odie Ayaga @Stu Basham @Alexis Manco @Watson Hilaire