Rogue Investor Stole My Deal! - Posted by F Dixon

Posted by Randy on September 22, 2003 at 12:40:18:


Rogue Investor Stole My Deal! - Posted by F Dixon

Posted by F Dixon on September 21, 2003 at 17:44:16:

Hello all,

I found a great deal a month ago with a ton of equity.

I got the desparate owner of the property to sign a notarized quit-claim deed to me in exchange for cash when they moved out. I never recorded this deed.

The property needed a little TLC, which I didn’t want to bother with, so I agreed to have another investor take over and pay me a finder’s fee after closing. This agreement was secured by a promissory note between me and the investor.

This investor qualified for a low $ down mortgage and closed directly with the owner of the property. He purchased it for the appraised value. The seller agreed to sign their equtiy check over to him. The liens were paid off and a small sum was paid to the seller, and the investor pocketed the rest.

After closing, he gave me a personal check for the finder’s fee. But he put a stop payment on the check 3 days later.

He won’t return my calls now. I actually did get to speak once with him since, and based on that conversation, he doesn’t intend to pay me now. I don’t think he ever intended to pay me. His attitude was, “Oh well, I guess I’ll see you in court”.

For privacy reasons, I left out the amount of the finder’s fee. Lets just say it is in the 5 figures.

Would some of you please comment on the two courses of action below:

  1. Sue for breach of contract of the promissory note

  2. Record my quit claim deed and try to reclaim the property


Re: Rogue Investor Stole My Deal! - Posted by michaela-ATL

Posted by michaela-ATL on September 23, 2003 at 07:44:39:

I’m not an attorney, so, this is not legal advice.

In Georgia you don’t need a lawyer to file a lawsuit. Why don’t you research some lawsuits on the net and see how it needs to be set up, then write all the claims etc and file it. That allows you to file a ‘lis pendens’, which would make it impossible for the investor to refinance or sell the property until it’s come to trial. That may actually take a year or longer in which time the other investor may want to settle with you to be able to do something with the house.


Re: Rogue Investor Stole My Deal! - Posted by luke-NC

Posted by luke-NC on September 22, 2003 at 07:33:36:

I would have my lawyer contact the title insurance company that the buyer’s lender now has on the home and inform them of your intent to file a civil action in order to be paid for your assignment( show them your agreement and notarized deed), they may give you some of your money to make you go away.

This may or may not work, but it could be worth a try.

Re: Rogue Investor Stole My Deal! - Posted by Jay Compton (AL)

Posted by Jay Compton (AL) on September 21, 2003 at 22:16:50:

I’ve seen some very good arguments and advice concerning your case, so I really can’t add much more to this than what has already been said. However, as an investor here in Alabama, we all live by an unwritten creed. If this guy cheated you out of several thousand dollars or or even ten cents, pick up the phone and call the investors that you know locally and tell them your position on this. They need to know so they won’t get taken by this guy also.

I have had some deals in the past that I wish I had paid less to another investor, but because I do this everyday (and have been for the last 12 years) the people I deal with have to know they can trust me…If they can’t, then I lose…

Remember, I’m not saying to go out and slander him, or set yourself up for some defamation of character suit, but do let you colleagues know what has happened.

Jay Compton
Birmingham, AL

Re: Rogue Investor Stole My Deal! - Posted by SuperCat (IL, KY)

Posted by SuperCat (IL, KY) on September 21, 2003 at 19:45:50:

Stopping payment on a 5 figure check would most definitely be a felony in Kentucky. You could file charges with the county attorney. I would assume there are similar charges in your state. You can prove you brought the deal to them and assigned the contract to them. If you just played a broker and didn’t assign the contract, then you are opening yourself up for a charge of acting as a real estate agent without a license.

So you may want to follow up on a criminal charge, or drop it.

One other possibility is if you still have the check, is that most banks the stop payment has to be renewed in 90, 120 days, etc. So you can re-deposit it after that time frame and it might sail through and you get your money.

For the newbies, this is why you want to assign the contract and always record the deed. An unrecorded deed is worthless as a lien or another deed can trump it.

Court may be your option here… - Posted by JT-IN

Posted by JT-IN on September 21, 2003 at 19:17:58:

Recording of a Deed will not help you here… since the seller also executed a Deed to the other investor, which they did record. Most states, (which you didn’t mention which state you are located), utilize race state rules… this means that if two or more deeds are executed from a property owner to numerous grantee’s, then the first one to record is the legitimate owner. So that would leave you out here… oplus you agreed to have the other investor be the buyer…

Depending upon how strong your contract is between you nad the other investor, will determine if you could prevail legally. If you prepared all the agreements, odds could by good that you may have a problem here… since you may not have covered ALL contingencies. (just a hunch).

In order to file suit here, you would be better served to acquire an Atty to represent you. See if you can get an Atty to take the case on a contingency basis. If not, odds might be good that you have a weak case to enforce. The best evidence you have going for you is the check which the other investor stopped payment on… That should be worth something… as the fact that he originally wrote the check, means that he felt that he owed you the funds…

Wish you luck in prevailing. In addition to what this cost you,in loss of the fee, hopefully you hae gained some valuable knowledge of what you would do “next time”, if the same deal presented itself tomorrow…


Re: Rogue Investor Stole My Deal! - Posted by Boyd (MA)

Posted by Boyd (MA) on September 21, 2003 at 18:04:50:

First off - I AM NOT a lawyer. This IS NOT legal advise.

I am not sure of the specifics of your state, but it is my understanding that a deed DOES NOT have to be recorded for it to be legal. If I am reading your post correctly, you received a notorized deed from the seller before this other investor did. Therefore YOU are the owner of the house and the seller (now former owner) isn’t. And if you are the owner of the house then the investor could not have bought it from the “seller”, it’s your house.

Somebody please correct me if I am wrong. Either way, I suggest you talk to a lawyer.

Boyd (MA)

Re: Court may be your option here… - Posted by Brenda Whittaker

Posted by Brenda Whittaker on September 24, 2003 at 03:31:03:

This might be one of those expensive “seminars”. Most of us have been through a few of those.

Re: Court may be your option here… - Posted by tom

Posted by tom on September 21, 2003 at 21:03:22:

checks over $1000 that is serious fraud. call your local police department. where i live over 1k puts you in front of court, and potentially in jail for check fraud. they keep a list of such offenders as well, making business more difficult for the offender. i would personally pursue thecollections route.


Not Bad - Posted by Walt Carey

Posted by Walt Carey on September 21, 2003 at 20:57:39:

Where’d you go to law school, JT? LOL

How’s things with you, my friend.


Source of my confusion - Posted by Boyd (MA)

Posted by Boyd (MA) on September 22, 2003 at 15:00:48:

The source of my confusion:

As per the Massachusetts Pre-Licensing Course Booklet for 2002:

“The validity of the deed does NOT require the following: Witnesses, Signature of grantee, Date, Seal, Acknowledgment and Recording.”


“A deed not recorded is only valid between the parties who have actual notice of the transfer, such as the seller and buyer. All others believe the seller owns the property because that is what the public records indicate. Thus, if the same seller fraudulently sells again and the new owner records, then the new owner is the only owner of record and the first buyer has nothing.”

Moral of the story? RECORD THOSE DEEDS !!!

Boyd (MA)

Re: Rogue Investor Stole My Deal! - Posted by Nate(DC)

Posted by Nate(DC) on September 22, 2003 at 12:03:42:

This is a perfect example of why you shouldn’t take legal advice from non-lawyers!


More Civil than Criminal here… maybe - Posted by JT-IN

Posted by JT-IN on September 21, 2003 at 21:44:30:

In an instance like this deal that the investor has described above, we certainly do not have but a few details. However, if for some legitimate reason, the investor who stopped payment on the check in question, had learned that he may not truly owe the funds that were written in the check, then there may be NO criminal activity at all. This is considerably different than if the check was not honored at the Makers bank…

What the Payee on the check will have to first do is prove in civil court that he was entitled to the funds, as detailed in the contract agreement. It is my take that it may be a 50/50 odds, maybe less… that there was not some important i’s un-dotted and t’s un-crossed, that may eliviate some or all of the check makers obligation to pay… Again, all this is highly speculative, based on having No facts, but it is easy to side with the original poster… and I am at least leaving open the fact that there could be defensible reasons why the stop payment order was issued… Hence, NO entitlement to funds…

Just the way that I view things…


Law School @ Sidewalk U… - Posted by JT-IN

Posted by JT-IN on September 21, 2003 at 21:13:18:


Walt: Things are really good here. How is the SW of FL treating you…? Are you settling in OK…? Hope so, and look forward to visiting you there by year end…