just a question - Posted by Kenneth Graham

Posted by Stacy (AZ) on May 12, 2000 at 12:12:50:

Kenn-

I mean this to be an encouraging reply, but it will be up to you to decide to take it as I intend it.

Your last paragraph should be the “mantra” for 99% of the people that get interested in real estate investing, and ultimately quit. It seems you have found a possible deal, and are trying to make it work without educating yourself, first.

This forum is fantastic for asking questions, I agree. And I hope you will continue to ask questions here. But my advice is to buy a course or two to learn about the subject of your interest instead of attempting to wing it. Knowledge will give you power and confidence in your dealings, at a very cheap cost.

Some will disagree with my advice. Some may encourage you to jump in and learn by doing. All I can say to this is, after investing for only about three years myself, I continue to find out how much I still don’t know. There’s a saying, “you don’t yet know what you don’t know”. After all, this isn’t a game. These deals all have real-life legal ramifications.

To summarize, I hope you don’t get discouraged and “say nuts and contiue working at my Job for 30 years”. I would encourage you to take a little time to get some initial education, and you’ll be light-years ahead.

Stacy

just a question - Posted by Kenneth Graham

Posted by Kenneth Graham on May 11, 2000 at 11:22:27:

The seller does not want me to record this contract on the house I am buying. Not a problem but how do I protect my investment $500 down plus fix up costs things like that no closing costs. I read something about a lien but don’t know if this will work since house is not in my name yet. Any help will be welcome. Maybe I am missing something. thanks Kenn

Re: just a question - Posted by MDonovan

Posted by MDonovan on May 11, 2000 at 17:49:40:

The problem with not recording is that he may encumber the property. You can sue for performance, but you will just end up with a judgement, and legal fees to pay. You must record a memorandum of contract or a performance mortgage in order to protect the deed.

What your seller doesn’t realise is that he has to foreclose a land contract regardless of whether it is recorded or not. The recording does not help or hinder his remedies if you default.

That said, the best way to give him what he really wants is a straight option (when option expires, you are out) or a lease option (no rent gets you evicted). In other words, no foreclosure.

That does you no good though, since he can still encumber the property. So once again, you must record the option, or a memorandum of option. Its not really necessary to record unless the seller seems flaky, but this guy is specifically asking for no recording, so that would raise enough suspicion in my mind to do the recording.

The best way to protect both interests is to form a land trust. You become co-beneficiaries. Its the best way to go. Ask Bill Gatten.

Re: just a question - Posted by kenneth graham

Posted by kenneth graham on May 11, 2000 at 15:50:39:

I was looking over the legal section the other day and saw Bill’s answer to Jim Schrienk where he says a land contract “need not be recorded to be a valid transfer of ownership” thats where I got the no problem part at.

Maybe I am doing this wrong but I have an investor realitor who is working with me on this and I trust him. (So no negetive comments on realitors please) Again any help on this would be welcome.

Thank you all for the help I have gotten over the last few months, Kenn

Re: just a question - Posted by Eduardo (OR)

Posted by Eduardo (OR) on May 11, 2000 at 12:40:45:

Kenn–

A deed transfers title. However, the first deed recorded is in first position. So if you don’t record the deed, the seller can go get a new loan or sell to a new buyer and they will be in a superior position to you. But you use the word “contract.” What is this? A land sale contract? Then you record, at the least, a memorandum of contract. Is it an earnest money contract? They are never recorded. So we don’t know where you are at. However, realize this: When the seller doesn’t want you to record a deed or land sale contract (contract FOR a deed), then this is a red flag that something is wrong. Usually it means that the seller is trying to put one over on you and/or a lender. I have seen hundreds of transactions. Your prudent choices are: 1. Find WHY the seller doesn’t want what ever it is recorded. 2. Having found out, and still wanting to do the deal, record it anyway. 3. Failing the above, run away from this deal. You say, “not a problem.” It sounds like the seller is calling the shots. I’ve been a successful investor for 30 years–no seller EVER calls the shots with me! --Eduardo

Re: just a question - Posted by Kenneth G.

Posted by Kenneth G. on May 11, 2000 at 18:30:53:

Thanks for the answers. Maybe should just walk away from this one. No one has signed anything yet! If anyone has any ideas how to do this I’ll try them out.

Lease options are they pretty standard? I have some I have gleaned from books (that I paid for) and law offices. Assume they work across country.I am almost to the point to say "nuts"
and contiue working at my Job for 30 years Thanks for all the help.
Kenn

Re: just a question - Posted by Kenneth Graham

Posted by Kenneth Graham on May 11, 2000 at 15:23:08:

Okay let me splain the whole deal then you can tell me to run. Out of state don’t wanter been burnt on contract before. Will sell on contract for 6 months Then I refinace and pay him off or resale or flip or whatever . He doesn’t want it recorded so our lawyer puts this in contract. I know this sounds strange, says cause it is He is afraid I won’t come thruogh and he would have to go through a forclosure. I just need a way to protect myself. The contract says he can’t go out and refi or mortage the place. The money for this is a small But a $10,000 doller profit so would like to make this work any more questions that I can aswer please help me. This is my first deal. What am I doing wrong.