Using the BPF to your advantage - Posted by Kristine-CA

Posted by Nike on July 15, 2007 at 17:51:06:

Any case involving rival claimants, whether involving a deed, mortgage, or equitable interest, requires analyzing whether the claimants are BFPs. It’s an important issue notwithstanding your lack of experience with it.

Using the BPF to your advantage - Posted by Kristine-CA

Posted by Kristine-CA on July 11, 2007 at 09:18:43:

Haven’t read Joe’s new Blue Pen Flip course yet. I’m pretty creative with
wholesale deals so I’ll definitely want to see what he’s got in there. I’m
thinking there is valuable stuff in there for me regarding paperwork that locks
up both sides of the deal.

I can’t speak for anyone else’s market but I can assure you I will get a call
from a seller 3 months from now who was approached by one or more
investor using Joe’s ideas. Those investors may or may not use the technique
well–some will be good at what they do and some will make a mess of
explaining what they are doing. My sellers are already getting plenty of
option offers and sub2 offers and all kinds of offers with no commitment to
buy. There are investors everywhere. I know because they call me when I
advertise what I am selling. It’s always interesting, but the bottomline is that
they are not going to buy unless they find a buyer.

The more strategies out there that tell the seller there is no firm commitment
to buy, the better for me. Some sellers may be well served by Blue Pen Flips
and various options–they may get a better price in the end. But there are
always sellers that want the deal done today–no contingencies, no clauses. I
like being the buyer they call after they’ve talked to the other guys. Kristine

“BFP” has old, rich meaning - Posted by John Merchant

Posted by John Merchant on July 11, 2007 at 15:14:09:

Any lawyer seeing the term BFP is going to be immed. curious as to what a layman is doing using it.

It’s an ancient abbreviation for Bona Fide Purchaser and that is a RE purchaser or lender who buys or lends on RE without knowledge of an unrecorded deed or deed of trust or mtg.

Legally, that BFP is then protected by his ignorance and is in a superior position, on the title, to any buyer or lender who’s got a deed or deed of trust or mtg but who hasn’t recorded same.

I’ve known of two or three such situations where the new buyer or lender is offered such a tremendous deal that he’s immed. suspicious that there is a prior, but unrecorded, deed or D/T, but being savvy to “first in time, first in line” he goes ahead and takes the new deed or D/T and quickly records it so he’s ahead of any other, older, unrecorded conveyances.

The new buyer or lender is under NO obligation to check out any unrecorded doc and once his new deed or D/T is recorded, he’s virtually invulnerable to the older grantee, mortgagee, etc.

Re: Using the BPF to your advantage - Posted by Natalie-VA

Posted by Natalie-VA on July 11, 2007 at 13:42:03:

Good post Kristine. Everyone has their niche. Mine is to buy your home fast with no hassles, repairs, commissions, evictions, etc. If I say I’m going to close, I’m going to close and pay off your loan. As a matter of fact, I sold a contract recently to another investor who wanted to postpone closing by a few days and change the settlement agent. She couldn’t understand what the big deal was when I objected. I got this long distance seller comfortable with my settlement agent and told the seller I would close on a certain date. I don’t care if the contract allows extensions; I’m going to do what I said I would do.

By the way, I receive many emails from wholesalers offering really marginal deals (or no deals at all). I wonder if someone else is actually biting on these.

–Natalie

meaning - Posted by Nike

Posted by Nike on July 13, 2007 at 18:08:57:

Recording protects a BFP against subsequent claims. Whether a buyer or lender is a BFP turns on whether they had knowledge (or should’ve known) of a prior unrecorded third-party claim. Notice can be imputed to a party claiming to be a BFP if there are facts such that he should’ve investigated further whether other claims exist.

Re: “BFP” has old, rich meaning - Posted by Kristine-CA

Posted by Kristine-CA on July 11, 2007 at 15:58:46:

John Merchant. Thanks for explaining bona fide purchaser. I always it
assumed it was a buyer with a contract or who had paid consideration
or some such thing. I had no idea about the phrase’s real legal
meaning.

In your experience, what has been the rationale or explanation for not
recording a deed? I’m working a deal now where there is an
unrecorded deed.

Man dies intestate. Probate is completed and court order is recorded.
Wife inherits 1/2 of property and 3 siblings inherit 1/6 each. Siblings
agree to sell their interests. Wife makes payment to each sibling for
their interest. But deed(s) go unrecorded. My research shows there
were personal liens against one of the siblings that predated the
inheritance. I believe they were waiting to clear up the leins in order
not to have the liens attach to the property. But then 25 years go by,
wife dies, her only heir dies, the siblings die, docs are lost…no one
knows the story anymore.

What are some other reasons that a deed would go unrecorded?
Kristine

Re: “BFP” has old, rich meaning - Posted by Barry (FL)

Posted by Barry (FL) on July 11, 2007 at 15:53:33:

it’s actually BPF (Blue Pen Flip) not BFP.

Re: Using the BPF to your advantage - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on July 17, 2007 at 22:20:28:

Natalie - I like your post very much.

Personally, I think it would be more accurate to say that what you offer is not a niche [market] but rather the tactical approach that you take in acquiring properties.

In the marketing world, each of your points are comprised to form your own U.S.P. or unique selling proposition and I’ll bet you do a great job of communicating that in all your marketing efforts.

However, I think most of us would still think of a niche as a certain collection of characteristics of a market segment rather than how you approach it. I like to think of niches as what I want to find on the end of my fishing line or in my net(s).

If this comment isn’t helpful then just throw it back in the water and maybe someone else will catch it.

Re: Using the BPF to your advantage - Posted by Chad (MD)

Posted by Chad (MD) on July 11, 2007 at 17:32:27:

Great post, Natalie. When I make an offer I stress that financing is not a problem. I tell them we have access to hard money, and our offer is all cash with no contingencies. Since my offer is so much lower than they were expecting, it helps for them to know it’s a strong offer that won’t fall through.

Or … just Blue Pen Flip it!

Re: Using the BPF to your advantage - Posted by Max-VA

Posted by Max-VA on July 11, 2007 at 15:20:07:

Natalie,
This is what sets you apart from the rest.
"I’m going to do what I said I would do"
I wish there were more people that would follow your example. Investor and other professions would have a much better reputation if everyone just do what they say they will.

Re: Using the BPF to your advantage - Posted by Kristine-CA

Posted by Kristine-CA on July 11, 2007 at 14:56:42:

Hi Natalie. I see a lot of marginal wholesale deals on craigslist and the
MLS. They are deals I wasn’t able to get from the seller and now there
is opportunity to pay more! It might make sense if this was an
appreciating market, but no longer.

I think many wholesalers are working with lots of volume. It makes
sense for them to sign up lots of marginal deals. Those are agent
wages to me. Commissions pay well if you do high volume (or are
successful in a high priced area). I’m not working volume so when I get
a contract it gets special attention. Kristine

Be interesting to brief decisions on this - Posted by John Merchant

Posted by John Merchant on July 13, 2007 at 18:45:23:

I’m too tight to brief this w Lexis (the legal online briefing program, not the car ;)but next time I’m at the law library I think I will check it on Am Jur or Corpus Jur and see what BFP decisions have been reported.

You’re right in that the buyer of record might very well have known or had plenty of reason to suspect a prior, but unrecorded, conveyance…and boy howdy, what a rip roaring battle that would be in trial court re the admissible evidence on same.

The recorded deed holder would be yelling “Objection, hear-say” about any oral statements, and the prior deed holder desperately hunting for and pushing whatever exceptions he might think would permit that testimony.

And of course if the #2 recorded deed holder had put anything in writing about knowing or suspecting such a prior but unrecorded deed, that would be deadly evidence against #2 that he’d be trying frantically to keep out of evidence.

It’d be fun to watch wouldn’t it?

Keepin’ it private - Posted by John Merchant

Posted by John Merchant on July 11, 2007 at 17:14:19:

One I recall where I’d sold a man a small residential parcel but then I kept getting tax bills.

I called the buyer two or three times and reminded him of his need to record but to my knowledge he never did so; I guessed he trusted me not to sell it again.

I’m confident he didn’t want his ex W to know about the property and maybe he had even perjured himself on the stand in his divorce case. Clearly not a divorce case I could have handled with my knowing the truth.

The usual reason is the grantee wants to keep his ownership very quiet.

A big hazard in doing this is even if you have trusted the Seller not go deliberately resell the RE, you can’t be sure that his heirs know about this, so when he dies they might think he still owns it and then resell it themselves for his estate.

Re: “BFP” has old, rich meaning - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on July 11, 2007 at 16:43:19:

Just because a deed is not recorded does not mean that an interest hasn’t been transferred.

Refer back to ‘Acceptance and Delivery’ and test to see if the transfer took place. Test for any restrictive clause(s) that conditioned the transfer upon some other event or performance.

First Tuesday online has a great little article that discusses this at length.

Also, I was somewhat relieved at the clarification of BFP and that was not a BFD. That would be different.

Re: Using the BPF to your advantage - Posted by Natalie-VA

Posted by Natalie-VA on July 18, 2007 at 08:53:11:

Hi Rick,

I agree with your comments. It seems to be more of the way I do business rather than a niche.

Now I just need to find a niche!

–Natalie

this - Posted by Nike

Posted by Nike on July 14, 2007 at 05:23:45:

While you’re in the law library look up actual/implied notice. Notice may be inferred based on facts in the case. No need to prove he had notice rather he will demonstrate that the facts were such that he should’ve known or should’ve investigated further.

Re: “BFP” has old, rich meaning - Posted by Barry (FL)

Posted by Barry (FL) on July 15, 2007 at 09:01:40:

LOL! Truly another kettle of fish. What’s really funny was the original question was about a BPF.

How’ve you been Rick?

“Niches for Natalie” - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on July 18, 2007 at 21:37:33:

I’ll bet that you are just surrounded by them. The real question becomes, “Which nich makes you itch?” Hopefully, the answer is that there are multiple niches that appeal to you.

My favorites have to do with properties that the owners don’t want, other investors don’t know about, and have “perfect storm” type problems that need to be solved, which, I hope, are your specialty at solving.

Yes, this is a bit of a puzzling riddle, but the answer(s) may both surprise you and make you very rich (or richer) as may be the case.

Good, you’ve identified the issue - Posted by John Merchant

Posted by John Merchant on July 14, 2007 at 07:12:46:

Thanks counselor, but I know the ultimate factual issue is whether there was notice, actual or implied…and glad to see you’ve also recognized it.

I’ll give you points and credit for “spotting the issue” in this first year law class question.

As I said earlier, the real battle in one of these cases would be the evidentiary one where the unrecorded deed holder would have to prove his claim of “implied notice, or should-have-known”.

issue - Posted by Nike

Posted by Nike on July 14, 2007 at 12:58:07:

You sounded confused when you seemed to suggest that recording protects a buyer from prior claims–that’s wrong. Whether a buyer is a BFP has nothing to do with his recordng the deed or mortgage—recording protects a BFP from subsequent claims.

I don’t understand why you think that this type of legal dispute is unique–and why it presents uniquely difficult evidentiary hurdles for the plaintiff. By the way–didn’t you take Evidence your first year?