Posted by Stacy (AZ) on April 14, 2000 at 19:38:22:
“Sometimes a little toughness, a little hard ball is just the ticket. Some people only respond to toughness.”
I agree, Jim. I found this out years ago on my job, and keep it in my hip pocket when the occasion calls for it. But, learning to chose the battle comes from experience as well. It’s important, in my mind, not to use the big stick too easily, or it loses its effectiveness.
Good post-
Stacy
This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by Dan Kelley
Posted by Dan Kelley on April 14, 2000 at 14:09:58:
Yes I want some cheese with my whine.Take a look at these last 3 deals and tell me what I could of done differently. 1.Bank foreclosure fmv.$60,000… asking $38,000…$5000 rehab…I offer $34,000 my realtor says it looks good.I ride by the house a few days later and there Is another Invester looking at the house.He works with the realtor who has the listing from the bank.He offers $34,500 and gets It.I found this out later. 2.Put Contract on 6-unit.Real tired landloard.She lives 100+ miles away and wants to buy a house.but wants all cash,no terms.Price $55,000…Gross rents $30,000…N0I $17,500…My mortgage broker says It wont appraise out.The banks are not looking at the cash-flow,There looking at the age 1921.Buts In fair cond In a hot area.What gives? 3.This one made me mad.My realtor found a rehab special.FMV.$55,000…asking price $29,900…
Rehab $12,000.Offer take over non qualifying assumable loan of $7000 plus $7000 cash =$14,000 total.He wants $9000 cash =$16,000 and to close In 9 days and to live In the house for 30 days after closing.This Is the only way he will do the deal.So we sign the contracts through his realtor.Here Is where It gets real strange.His name Is not on the deed.The womens name on the deed Is a friend of his that will sign anything that he tells her to and for me not to worry.This coming from his realtor.I don’t like this,I have a signed contract by a guy who Isnt on the deed.It gets better…I go down to the court house and find out that the lady that the deeds name Is In, was given the house In 1990 by a women In a life estate and she Is still alive.S0 I tell my realtor that this women has to sign off on this.His realtor calls my realtor and says the women that gave the life estate Is old and I s
Re: This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by Bill (OH)
Posted by Bill (OH) on April 16, 2000 at 03:51:51:
You need to find better realtors to work with. Find one that has either an MBA or JD, or at the least a BSBA. The realtors that you are working with seem to be dummies at best and crooks at worst. For working Realtors, education really counts for something. The office I work for is ranked number ten in transactions closed in an area with about two million people. We do this with about twelve active agents—who have either graduate level degrees, or have been sucessful owners of other businesses and have retired from them. Ask the realtors you use what degrees they have and don’t be satisfied with a ‘CRI’ or ‘ABI’…if they don’t have a college degree, consider using someone else.
And on that deal with the man signing on the contract who dosen’t even show up on the title—sorry, but you don’t have a binding contract. The way a life estate works is that the individual who is given the estate possess the property for as long as they live. Once they die, the property reverts to the former owner or the estate of the former owner. So, I think you can see that it would be best to leave this one alone!
Still beats the heck out of the Stock Market - Posted by Laure
Posted by Laure on April 15, 2000 at 07:59:10:
And, I do drink, from time to time ! LOL
Laure 
Be STRONG Dan, you can do it!!!(nt) - Posted by Ben Buckley
Posted by Ben Buckley on April 15, 2000 at 02:26:49:
…
Re: This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by T Jent
Posted by T Jent on April 15, 2000 at 24:44:33:
Re deal no. 2, the part about “banks don’t care about the cash flow” seems strange and just wrong. Cash flow is the primary source of an INCOME property’s value. Bank’s know this; that’s how they figure the borrower is going to pay THEM. The cash flow you represented sounds excellent. As for the building’s age, it is not insignificant, but certainly should not preclude a conventional loan. I own several properties built in the 20s and I’ve never had a problem getting financed. In Los Angeles half the city was built in the twenties, and it’s still standing. With old buildings, the real issue is the plumbing. Sooner or later those old galvanized pipes all go and need replacement. Shop around for lenders. Don’t let the RE broker steer you to their special loan broker. And if you’re interested in apartment buildings make sure the RE broker knows commercial and commercial finance. A lot of them just show houses and know nothing of investment though they will never tell you this.
Re: This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by Paul_NY
Posted by Paul_NY on April 14, 2000 at 23:03:20:
Use a different funding source for #2. There’s more than one branch on the money tree.
Paul
Re: This could lead me to drink - Posted by JPiper
Posted by JPiper on April 14, 2000 at 17:02:16:
Personally, I wouldn’t be walking away from that deal#3 quite so quickly.
Chances are your contract requires the seller to provide good, marketable title. Chances are also high that the Realtor has NOT got a valid listing agreement signed by all parties, and therefore is in violation of state law.
I’d be tempted to record my contract…and then play a little hard ball. I’d be tempted to inform the Realtor that you have a valid contract, that if the Realtor didn’t have all the owners sign the listing agreement, and have all the owners sign the sales contract, that this nevertheless does not invalidate your contract. I’d be tempted to point out that if the Realtor is trying to sell property without a valid listing agreement that the state Real Estate Commission might be VERY interested. That if the Realtor doesn’t now see to it that the seller PERFORMS according to his agreement, that you will be suing the sellers AND the Realtor.
Call me cantankerous. It just might do the trick though. You can always walk away later.
JPiper
Re: This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by David Alexander
Posted by David Alexander on April 14, 2000 at 15:12:18:
Get more deals in the pipeline. That will give you more control until you are able to get a higher percentage of deals that work, or work for you. I remember when I would concentrate so heavily on one deal thinking this is the one, gotta make this one happen and alot of times “before” it was even a deal. It was still just a possibility.
Now I know, get a lot of deals in the pipeline and sort through what will work best for me, what is most worth my time, what is really a deal, what is really a deal I can put together.
The first deal you posted sounds like the other Investor is already on the inside and you were probably used.
The second one sounds like a deal to me to, but take that with a grain of salt until you post all the numbers.
The third deal, I wouldnt have even went out the door on unless I knew that the person had a POA to sign or some interest in the property, or the lady was present.
David Alexander
Happens daily - Posted by PBoone
Posted by PBoone on April 14, 2000 at 14:44:40:
Always keep in mind ANYONE can write a book on theory, hypothesis, and deals, but FEW ACTUALLY write deals.
Pat
Re: This could lead me to drink…How do you guys deal with the roller coaster of REI? - Posted by Dan kelley
Posted by Dan kelley on April 14, 2000 at 14:30:59:
I got cut Off…His realtor calls my realtor and says the women that gave the life estate Is old and that I should not make her have to sign this and that he Is going to find another all cash buyer who wont care.I think his realtor Is crazy and so Is he.I just found out today that they have another all cash contract on It. I think I,m going to run from this one.Thanks for letting me vent…Dan
My responses… - Posted by Mark (SDCA)
Posted by Mark (SDCA) on April 14, 2000 at 14:28:24:
#1. It happens. I made an offer on a property the day my realtor sent me the MLS sheet. It had sold at trustee sale the day before. I made an offer on another property the day the realtor gave me the MLS sheet. Seller had accepted an offer the night before. Sometimes you have good timing, sometimes you dont.
#2. I think your mortgage broker is wrong. Just based on what you presented here, it seems like it would work. Get more opinions. Call other brokers. Call lenders.
#3. I wouldn’t worry about it too much. Just make sure you get title insurance. The worst thing that happens is you waste some time and the other party cannot deliver the property.
Mark
Small Correction - Posted by Vic
Posted by Vic on April 16, 2000 at 04:37:02:
The life estate may or may not be on that person’s life. The life estate might be on the owner’s life, in which case when the owner dies, the estate would be terminated.
Vic
Re: This could lead me to drink - Posted by Jim_Socal
Posted by Jim_Socal on April 14, 2000 at 20:35:20:
Deal number two sounds possible. Just because a realtor says appraisers/banks only look at age is nonsense. Im an appraiser and we use three approaches to value. With income property, units, its even more important. Call a local appraiser for his opion on this property before you let the realtor sell it to somebody else.
Re: This could lead me to drink - Posted by Vic
Posted by Vic on April 14, 2000 at 18:03:41:
Jim,
What would you hope to gain by going after the realtor? What if the realtor didn’t know the situation? How would going after the realtor help solve the problem? Just curious, I don’t understand what you hope to gain by going after realtor. If the guy wanted to pursue it, shouldn’t he go after the guy that wasn’t on the deed? Wouldn’t he be the one that’s guilty of fraud or whatever, being that he was selling something he didn’t own?
Thanks,
Vic
Re: This could lead me to drink - Posted by JPiper
Posted by JPiper on April 14, 2000 at 19:30:04:
Here?s how I see this:
In my state the Realtor would have violated at least these two sections of the license law:
Either of these actions are grounds for suspension or revocation of a license in my state.
Any Realtor as a part of the business of listing a property has an obligation to verify ownership. To not do so in my mind would be ?gross incompetence?. Further, there may well be rules in the MLS that would cover listing a property which, in effect, cannot be sold under the terms in which it is listed.
In addition, any Realtor is charged with the responsibility of DISCLOSING material facts. Certainly one material fact is the ownership of the property. Realtors have no excuse just because they ?didn?t know?, when they have the obligation and ability ?to know?. Beyond this, one wonders whether the Realtor is now tortiously interfering with an existing contract, by entering into a new contract.
What would I hope to gain? I would hope to turn up the heat sufficiently with the Realtor that he would get the things done that need to be done to make my contract effective.
The fact that some of the owners of this property didn?t enter into the contract doesn?t just create a problem for the Realtor. The parties who DID enter into the contract now have a responsibility to perform?.except they can?t. Does this sound like a ?breach? to you?
And now, the Realtor is out selling this to someone else, when if we believe the original post, all that exists may be a life estate.
I don?t speak just theoretically about this. I had something similar happen one time. I entered into a contract with a seller represented by a Re/Max agent. The sellers were the heirs of a property?.six of them. They all signed the contract. A short while later, I sold the property to a second buyer. Now I get a call from a lawyer. He asks ?Are you the guy that?s wheeling and dealing with this property over on XXX street.? I say that I?m the guy with a contract?.yes. He informs me that his client?.the SEVENTH HEIR?.has not agreed to the sale of the property, did not sign the listing agreement, and that this whole thing looks like fraud to him.
It took me about 2 seconds to call that Re/Max agent with more threats than Carter has pills. See, I had spent some money on due diligence, and further, I had now entered into a contract with another buyer myself (fortunately mine was subject to receiving title). Nevertheless, I later put my threats in writing. When the date of closing arrived, the SEVENTH HEIR was there, with everyone prevailing on him to sign. He tried to hold me up for some additional money?.I refused. And I believe to this day out of fear, the Re/Max agent buckled, and threw his commission into the deal to buy off the SEVENTH HEIR.
Sometimes a little toughness, a little hard ball is just the ticket. Some people only respond to toughness. One thing for sure, if you?re always walking away, then your reputation will ultimately precede you. My attitude is that I am willing to adhere to my obligations under a contract. I expect others to adhere to there?s. And I don?t have a whole lot of room for Realtor incompetence.
JPiper