All posts by dlcarey

Quit Claim Deeds and Judgments

Why you need a Title Search for every Property

I often see people offering Quit Claim deeds for very low prices. Often there are back taxes owed on these properties, Most people know to check for them. However, too many people have skipped the Title Company and Title Search, paid a few grand to the seller for a property, and recorded the deed themselves. It’s later when they may receive some unpleasant surprises. Any recorded valid judgments against the current or previous property owner(s) stay with the property even AFTER it transfers.

If you take the deed, the judgments against the previous owner stay with the property!

After putting 10s or 100s of thousands of dollars into a purchase and rehab, you could lose it all to a judgment holder.

What I’m going to show you is NOT a substitute for a complete Title Search. I do this for properties that are behind in property taxes or have been vacant for a while. It only takes me a few minutes and helps me identify potential issues early on, before I send a purchase agreement to the Title Company for a complete Title Search (I use Performance Title in Kettering).

It IS an excellent example of why looking up the property taxes and paying for a Quit Claim deed is a bad idea. It’s why I ALWAYS close with a Title Co and get a complete Title Search for ALL previous owners, transfers, and any other potential issues.

Here’s how to do a quick check on the property. The steps should be similar for any county, although the details and websites will differ. This example is for a property in Dayton, Ohio located in Montgomery County, Ohio.

FIND THE PROPERTY OWNER

First, Go to the County Auditors page search for the property by address. http://www.mcrealestate.org/search/commonsearch.aspx?mode=address

Montgomery County Auditor Search
Montgomery County Auditor Search

Note: You can put in partial information, and it’ll give you everything that matches. It can be great way to find a property when you have incomplete information.

Click on the search button, and it’ll give you all the results.

Montgomery County Auditor Search Result
Montgomery County Auditor Search Result

Click on the result you want, and it will bring you to the property information page. It’ll give you the property owner of record and show you the basic property details. Make sure you look in the transfers section, NOT the current mailing address. The Tax Year in the upper right corner shows the current Tax Year by default, not the Calendar Year, and it matches the mailing address to the owner of record for the Tax Year shown.

Montgomery County Auditor Owner Name
Montgomery County Auditor Owner Name

In this case, the owner is SCOTT HUTCHISON PROPERTIES INC. That’s the information we’ll need for the next step. We can also see that he bought it from HUD in Jan 2005. Scroll down the page, and you can see the property taxes due. You can go to the Treasurers page for more details.

Montgomery County Auditor Taxes due
Montgomery County Auditor Taxes due

WARNING: If a the property tax lien has been sold, the total will NOT include the balance owed on the tax lien.

Now, let’s take the name we found, and move on to the second step.

GET THE COURT RECORDS

Go the County Clerk of Courts page. Dayton is in Montgomery County, the website is http://www.clerk.co.montgomery.oh.us/pro/

On the left, Enter the company name and the three letter code, then click “Search”.

Be careful, there are often similar names to the one you’re searching for. Sometimes it’s very difficult to determine which apply. The Title Company can sort them out with a full title search.

You get a list with 12 results, 3 closed, 9 are open. In this example, they are exact matches, and are all judgments. You can open each one and look at them. When you click through on one, Use “Hit List” in the upper right to go back to the list.

Montgomery County Clerk Search
Montgomery County Clerk Search

We’ll have to open and review each file on the list. After reviewing the individual files, we can see the first three 2014 filings are renewing the 2009 judgments. They are renewals, not separate judgments, so we don’t count the three from 2009. After opening and reading the second set of three in 2014, we can see they were transferred from another county to Montgomery County. They appear to be duplicates of the first three in 2014, so for this example, we will ignore them.

That leaves us at least 3 unique judgments, the first three listed for 2014. Reading each judgment gives us the numbers we need. The judgments are all from 9 years ago, so I’ll do the basic interest calculation to get the total as of 7/10/18.

  • The first one, 2014 CJ 193949 is for $41,205.29 at 15% interest since 7/10/09. The total for that one is $96,832.43.
  • The second one 2014 CJ 193950 is for $51,623.93 at 13.5% interest since 7/10/09. The total for that one is $114,347.00.
  • The third one 2014 CJ 193951 is for $51,623.93 at 13.5% interest since 7/10/09. The total for that one is $86,511.00.

In total there is over $300,000 worth of judgments attached to this property, in addition to the $16,000 in past due property taxes.

If you take the Quit Claim deed for the property, the $300,000 in judgments remain with the property.

To get clear title, the liens have to be released from the property. There are several ways to do that, all take time and effort, and sometimes dollars.

That’s the quick check for you. It’s precisely why I use a Title Company, and never accept a deed without a Title Search.

November Real Estate Networking

Hi Everyone,

Please join us at TJ Chumps in Fairborn on Monday, November 13, 2017, 6:00 pm-ish for an informal networking meeting.  Real estate investors, realtors, brokers, buyers, sellers and contractors will munch (on your own) and mingle,  in the private room on the left side of the restaurant.  There is no formal agenda, but there will be an opportunity to introduce yourself, state your wants or needs, and ask and answer questions.

Several of us will be returning from the OREIA Convention, so I’m sure there will be a lot of talk about that.

We’ll have a white board for everyone to list properties and other items for sale or wanted.   We took a count by raised hands at the last meeting, and it was impressive to see the number of solid deals that had begun at our meetings.    Quite often, table neighbors or visitors become valuable resources, or the white board contains a property that is right up your alley.

We are a friendly, diverse group of people who are involved in one of the many facets of real estate.  Above all, we are there to help each other succeed, in a welcoming environment.   You may want to bring business cards, notes, flyers, and deals.   It can only be a win-win when 40-50 people gather with such common interests.

Event details are here if you need them.

We hope to see you Monday evening!

Real Estate Networking, October

REAL ESTATE NETWORKING (10/9/17), 6:00 pm-ish until ???? 

Come get to know local investors and landlords in a casual networking environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

RSVP and we’ll see you Monday in Fairborn

Dayton Real Estate Networking – July 2017

REAL ESTATE NETWORKING (7/10/17), 6:00 pm-ish until ???? 

Come get to know local investors and landlords in a casual networking environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

RSVP and we’ll see you Monday in Fairborn

IS WHOLESALING REAL ESTATE LEGAL?

IS WHOLESALING REAL ESTATE LEGAL?

I’m not going to get too far down into the weeds here. As you know, with any post there are a lot of “What ifs”, ways for people to misinterpret, and look for a way to weasel around what is said.

First, people must stop equating “Assigning the Contract” as everything wholesaling. Assigning is a useful tool, but only one of several ways to wholesale a property. I understand people’s attraction, as it’s always promoted as a way to “invest” with little or no money, and make a nice chunk of change doing it.

The following applies specifically to unlicensed people in Ohio. Most, if not all states are probably very similar.

WHOLESALING BY CONTRACT ASSIGNMENT

The first two are absolutely absolute (redundancy intended). Direct from the Ohio Revised Code and the Division of Real Estate attorneys. There is NO wiggle room.

Assigning a contract is perfectly legal. However, what people are doing to get from contract to assignment is frequently not. Driving to the Beach is legal. Driving 90 miles an hour to get there is not. Assigning a contract simply takes a few sentences to accomplish. Of course, a specific contract can prohibit assignment, but the law clearly allows it.
You cannot advertise a property for sale unless you legally own it. Having it under contract is NOT the same as owning it. And for the weasels, “Equitable Interest” does NOT give you ownership and allow you to advertise the property for sale. You must have legal ownership. There are still questions on precisely where the line for “advertising” is drawn. The Division would not take a solid position on where the line was if you were just advertising “The Contract” for the property.
The next one should be absolute, but there may be a loophole somewhere.

Do not put a property under contract unless you are ready, willing, and able to close on it personally. (For me, this is an absolute.) There are all kinds of issues with entering any contract when you have no intent or ability to perform on the contract. And you’re screwing the seller if you don’t perform. Don’t do it. This is one of the key points for the State to determine if you are acting as an agent.
If you assign multiple deals, but never close on one personally, you’re going to have a hard time saying you’re not acting as an agent.
If you’re putting properties under contract, but have no intent or ability to close, you’re violating contract law, and trying to act as an agent. (Imagine the seller suing you for contract fraud and specific performance.)
If you leave behind a trail of purchase agreements you didn’t close on if you couldn’t assign it, then you’re probably acting as an agent.
Now for the licensees:

Being a licensee allows you to advertise a property you don’t own when you have the owner’s written permission. You can have it under contract and be acting for yourself, and not as an agent. However, consider this. I can easily imagine a seller filing a complaint/lawsuit on how they were taken advantage of by the unscrupulous licensed, skilled professional real estate agent. You know the one who put their home under contract, then assigned the contract for a lot more than a commission. The agent clearly took advantage of the unsophisticated seller, and stole their home for less than it was worth for their own personal gain. Guess who wins that?

Being a licensee MAY hinder you. At the very least, it requires extensive disclosures, and the broker’s approval.

Wholesaling and all real estate activities MUST comply with the three rules above.

In case you’re wondering, I primarily focus on rentals and flips. I do wholesale some properties, which may include assigning the contract.

For additional information, here is a link to the video with Attorney Jeff Watson interviewing the attorneys for the Ohio Division of Real Estate on the specifics of wholesaling legally. https://www.youtube.com/watch?v=9fi54S8nwUA

ASSIGNING THE CONTRACT

So you’ve followed the rules, and successfully assigned the contract. Now, time for the closing and get paid. It’ll be a great day right? What could go wrong? Remember these two points:

When you assign a contract, you are giving ALL your rights to the contract to the buyer. You are removing your name on the purchase agreement replacing it with your buyers. You’re out of the picture on the purchase agreement.
Your assignment agreement is ONLY with the buyer. In exchange for replacing your name on the contract, you agreed to receive a fee.
The buyer and seller both have the right to change the purchase agreement. So, the buyer and seller could legally cancel the existing contract and create a new one. (Remember, you’re no longer the buyer) You could be sitting at the closing table, and you wouldn’t be able to legally stop it. The title co also wouldn’t be able to stop those changes, as the buyer and the seller have the right to change their agreement. A newly written agreement could take the assignment out of play from the title co perspective. The title co is simply a facilitator for the written agreement in the transaction, even when the buyer and seller make a last-minute change.

Ok, so most buyers and sellers wouldn’t do that. But some would and do. You could try to sue the buyer for not paying you, but how do you think that would go, and what would it cost?

Call me a control freak if you want, but I almost ALWAYS double close. It eliminates almost every objection as to whether you were wholesaling legally. Use Transactional Funding if you must, build the cost into the deal.

IN CLOSING

How do you prevent all the questions and problems above? Simple.

  • Find a great deal
  • Buy the property (use a lender or partner as needed)
  • Sell a good deal

Clean, neat, simple. And no argument about whether it’s legal.

Dayton Real Estate Networking 4/10/17

REAL ESTATE NETWORKING (4/10/17), 6:00 pm-ish until ???? 

Woo Hoo!  The private room is so much better. More space, and it’s much quieter and more conducive to our friendly banter,…..er business conversations.  If you didn’t make it last month, the private room is on the left side as you enter the restaurant.

Come get to know local investors and landlords in a casual networking environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

RSVP and we’ll see you Monday

Dayton Real Estate Networking 3/13/2017

REAL ESTATE NETWORKING (3/13/17), 6:00 pm-ish until ???? 

Woo Hoo!  We’re back in the private room, we’ll have more space, and it’s much quieter and more conducive to our friendly bant…er, business conversations.  The private room is on the left side as you enter the restaurant.

Come get to know local investors and landlords in a casual networking environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

RSVP and we’ll see you Monday

Short Sales – What Investors REALLY need to know

Land Trust Frustration
Hello? You What?

Our good friend Kristin will be explaining Short Sales, and cover the Top things Investors NEED to know about short sales.

What kind of discount can you really get?

How long does it really take?

What to watch out for….

Who can REALLY negotiate Short Sales….

Real Deals, Real Examples

And More…..

Come see her at the Cincinnati REIA meeting tonight
(Thurs, 1/19/17). You can get the times and location here. www.CincinnatiReia.com

Tell them Darrin Sent you.

DAYTON REAL ESTATE NETWORKING (1/9, 6:00PM)

Real Estate Networking (1/9, 6:00pm)

Come get to know local investors and landlords in a casual networking environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

SAVE MONEY

Money back in your pocket
Money back in your pocket

We’ve partnered with Community Buying Group (CBG) to save you money with more than 20 real estate-oriented vendors. Save on materials, tool rentals, printing, office supplies, background checks, and more! Many of you have already signed up and are seeing the benefits.

Probably the best deal for most of you is the Lowe’s program – you save 5% on every purchase with an LAR (Lowe’s Accounts Receivable) account. The LAR is a business charge account (not a credit card) that must be paid in full each month. PLUS you get another 2% discount when you pay your bill on time.  Get your contractors on board so they can pass the savings on to you.
The best part? It’s FREE! If you haven’t signed up yet, now is the time. Sign up with CBG using this Direct Link. Do it now, before you forget like I would.
Everybody saves, everybody wins! Just another way we’re helping you to be more successful!

IN BETWEEN EVENTS?

We have a Facebook Group to communicate easily between networking meetings. Ask questions, get a phone number, post deals, and more. Follow the link and click “Join Group” when you get there, you’ll be approved shortly. Dayton Real Estate Investing Network on Facebook As always, this will be a spam free zone.

RSVP and we’ll see you Monday

TJ Chumps
1100 E Dayton Yellow Springs Rd
Fairborn, OH 45324

Dayton Real Estate Networking (12/12, 6:00pm)

Real Estate Networking (12/12, 6:00pm)

Come get to know local investors and landlords in a casual environment. We’re a friendly bunch of people; come hang out with us and talk Real Estate. There are no formal presentations and no specific topics. Ask questions, start and join conversation…
If you’d like to know what to expect at the event click here.

SAVE MONEY

Money back in your pocket
Money back in your pocket

We’ve partnered with Community Buying Group (CBG) to save you money with more than 20 real estate-oriented vendors. Save on materials, tool rentals, printing, office supplies, background checks, and more! Many of you have already signed up and are seeing the benefits.

Probably the best deal for most of you is the Lowe’s program – you save 5% on every purchase with an LAR (Lowe’s Accounts Receivable) account. The LAR is a business charge account (not a credit card) that must be paid in full each month. PLUS you get another 2% discount when you pay your bill on time.  Get your contractors on board so they can pass the savings on to you.
The best part? It’s FREE! If you haven’t signed up yet, now is the time. Sign up with CBG using this Direct Link. Do it now, before you forget like I would.
Everybody saves, everybody wins! Just another way we’re helping you to be more successful!

IN BETWEEN EVENTS?

We have a Facebook Group to communicate easily between networking meetings. Ask questions, get a phone number, post deals, and more. Follow the link and click “Join Group” when you get there, you’ll be approved shortly. Dayton Real Estate Investing Network on Facebook As always, this will be a spam free zone.

RSVP and we’ll see you Monday

TJ Chumps
1100 E Dayton Yellow Springs Rd
Fairborn, OH 45324