"The Truth About Getting Around Due-On-Sale Clauses" by John T. Reed??? - Posted by Jay S.

Posted by chris on January 18, 2000 at 08:52:27:

Don’t worry about it. Have your sense of humor ready for DOS post 1138 and counting…

:wink:

-Chris

“The Truth About Getting Around Due-On-Sale Clauses” by John T. Reed??? - Posted by Jay S.

Posted by Jay S. on January 17, 2000 at 23:43:19:

Would appreciate some feed back from the pros on this guy’s site: www.Johntreed.com/dueonsale.html. Somehow, trying to read anything I can find related to investing, I ended up on Mr. Reed’s site. WOW! I was getting pretty hyped up about lease options…until I read his article! It seems as a newbie, (According to him), I would be flipping a coin as to whether the bank would enforce the due on sale clause. If they don’t Great!, but if they did…could be a short investing career! Mr. Reed was NOT very keen about Mr. Bronchick’s Lease Option techniques (to say the least)! I’ve read lots of deals on this site using L/O’s! Is Mr. Reed’s information accurate? Is using a Lease Option a roll of the dice…could be good…could be bad?

Thanks for any feedback…Jay S

How or why would a bank enforce due on sale? - Posted by George

Posted by George on January 18, 2000 at 18:55:51:

Banks have no intrest in enforcing due on sale clauses unless:

  1. There is a large increase in interest rates.
  2. There is an efficient way to discover which properties are L/O. In NYC I see no way to use the registars computers to do this, maybe things are different elsewhere.

The REAL truth . . . - Posted by Bronchick

Posted by Bronchick on January 18, 2000 at 13:23:25:

Reed’s article is BS with a capital BS. Sure, his opinion is is opinion and everyone is entitled to it.

BUT, he cites case law that is inapplicable, bar association rules that have been ruled on in our favor and ethics rules about brokers that have no applicability.

You want the REAL truth? Read my article at www.legalwiz.com/dueonsale.htm.

Over 100 hours of legal research and 10 years of personal experience went into my article.

John Reed didn’t go to law school and hasn’t bought a property in a decade . . . who are you going to believe?

Re:Lets clear the air… - Posted by Ed Garcia

Posted by Ed Garcia on January 18, 2000 at 10:05:46:

Jay,

DOS has been a topic that has gotten more conversation than it deserves.
So lets clear the air.

  1. When you purchase a property, you should be doing it with a game plan.
    That game plan should be, either to buy it, fix it up and sell it.
    Or buy it, to keep.

  2. If you buy it to fixit up and sell it. You don’t have to worry about a DOS,
    because by the time the lender could do anything to you, the property
    will have already been sold.

  3. If you buy it to keep. The worst case scenario, is that the lender can call the
    loan. Which could take them an easy year, before it becames serious.
    If they call the loan, then of course you would have to refinance it. (Big Deal)
    Now you have to refinance it.

In this business we take risks. To me a DOS is one of the least problems I have dealt with
in my 30 years of being in this business. I have experienced more talk right here on this
web site about DOS, than I have in that 30 years.

The real Pro’s, like Jim Piper, are not a least bit concerned about a DOS. Piper, posted a cute
Posting just for fun, indicating that.

This seems to be a question form the newbie’s. Personally I think Jim Piper should write an
Article covering this subject, so we could put it in the How-To Articles for the future newbie’s.
The reason I pick on Piper, is because he has answered this question at least 1137 times, so I
know he has the answer down pat.

Bill Broncheck, has already told us that there is no DOS jail.
Bill Gatten, loves this conversation, because then it becomes, PACT-trust time.
As for me, I have been in this business for 30 years, owned my own Mortgage Co. for 20 years.
And to this day, have only seen 1 that was executed, and that was because the borrower got
behind on their payments.

This web site is, with out a doubt the most active web site involving real estate, on the net today.
I have been answering questions on this site for 2 years. On this very site where I have seen this
Question asked time and time again, I have yet to see anybody mention being a victim to a DOS.

So I say, if there are any victims to a DOS out there. Will they please come forward.
If not, Piper write your Article.

(smile)

Ed Garcia

I wonder if Reed has ever checked out his own material (nt) - Posted by Bassman

Posted by Bassman on January 18, 2000 at 08:29:46:

.

A Change in Attitude… - Posted by JPiper

Posted by JPiper on January 18, 2000 at 07:13:25:

Eventhough I have been in this business for the entire time since the passage of the Garn St. Germaine Act…and eventhough I have NEVER seen a DOS clause enforced where the payment was current…

I’m changing my opinion. I think it would BEHOOVE everyone to quit these DANG lease/options, subject to assumptions, and land trust deals. They’re TOO risky.

JPiper

PS. Who needs the competition?

I challenge ANYONE to document a DOS enforcement on a L/O - Posted by Russ Sims

Posted by Russ Sims on January 18, 2000 at 01:45:40:

I agree, Jay. Reading Mr. Reeds comments about the dangers of L/Os would be enough to scare many away. But for those of us doing L/Os, the reality is NO LENDING INSTITUTION HAS EVER EVEN THREATENED TO ENFORCE THE D.O.S. Now I know there are a TON of investors who frequent this site who put together L/Os every week. I’d love to hear from any of them that have run into the “D.O.S. problem”.This is not to say it couldn’t happen, but if it does I’m confident I’ll negotiate my way out of it.
Russ

John T. Reed is my Hero! - Posted by Jacob

Posted by Jacob on January 17, 2000 at 23:53:34:

Just kidding, though I’m sure I’ll get some crap for that. He does kind of make a fool of himself on some topics, but I find a lot of what he says to be pretty accurate. One thing you will learn is not to dare question sainted authorities on different subjects. At least, not on this site. Loads of people will pop out of the woodwork just to prove how wrong you are.

Obviously, Reed is not some big “guru” and seems to save his best attacks for those that don’t kiss his duff. IN spite of that, he makes some really good arguements. Bottom line, there are two sides to every coin, yada yada yada…
Jacob

He is an idiot who does not like anyone but himself. (nt) - Posted by Jim IL

Posted by Jim IL on January 17, 2000 at 23:49:08:

nt

Re: Geez…we need a DOS FAQ on this site!!! - Posted by Stacy (AZ)

Posted by Stacy (AZ) on January 17, 2000 at 23:48:12:

Nothing against you, Jay. You’re new, and just trying to find answers. Exactly as you should do.

But, for those that have been through this a bazillion times, don’t you think an FAQ of some of the prior posts would be a good idea???

Stacy

Re:Lets clear the air… - Posted by BRnBA

Posted by BRnBA on January 18, 2000 at 11:53:45:

Now Ed, you know that Bill Gatten has had numerous DOS violations come across his desk (none that a PacTrust wouldn’t have prevented). He even posted one back in the sixties. If you’ll just be patient I’m sure he’ll post another before hell freezes over.

Re:Lets clear the air… - Posted by chris

Posted by chris on January 18, 2000 at 10:48:15:

Excellent post Sir.

But isn’t more fun for the DOS clause to remain mysterious?

:slight_smile:

-Chris

Re:Lets clear the air… - Posted by Jim LaVerdi

Posted by Jim LaVerdi on January 18, 2000 at 10:28:33:

Great post Ed! I feel a lot better just by reading this! I have not seen any post at all from anyone claiming to have a note called due to this! Thanks for the post and I’m sure you put many minds at ease with this DOS. You have mine.

Thanks
Jim LaVerdi (Phoenix Arizona Investor)

I wonder if Reed ever did any of the techniques in his own books.(nt) - Posted by Rob FL

Posted by Rob FL on January 18, 2000 at 08:32:43:

nt

Oops…My Apologies - Posted by JPiper

Posted by JPiper on January 18, 2000 at 08:29:37:

The above post was made in jest…I guess I’m as weary of the DOS clause posts as the next guy. I think I must have answered 1137 DOS posts. (I’m kidding…I don’t have a clue…but it’s a bunch).

I’ve already had a couple of emails wondering why I’m giving up on lease/options, etc. so I guess my little attempt at frivolity didn’t work.

I’m not giving up on the deals folks. It was just my sarcastic attempt at answering one more post on the DOS clause.

JPiper

We do have a search function on NG II for John Reed. (nt) - Posted by Jeanne

Posted by Jeanne on January 18, 2000 at 24:28:41:

nt

Wannabe reporter/journalist - Posted by Matthew Chan

Posted by Matthew Chan on January 18, 2000 at 14:22:37:

It seems he depends on a lot on his “friends” for his information. He is quoting people left and right in his books. More a glorified reporter than a writer of his own content. His “own” content is about slamming people and pounding people into the dirt.