Just Bought My First Subject To House!!!
This afternoon I bought my first Subject to house, took me two hours, because I knew the people selling it, they are tenants of a booth in my daughter's fleamarket. They were so happy it was me buying their house!
I had put flyers on the counter of the fleamarket and that is how they called me.
They had recently refinanced the house, and their equity is only 1500.00 that is what I bought it for, with $ 1.00 deposit!
It is a nice 3 bedroom, 2 bathroom house, about 1300 sq.ft, painted inside and out about 1 month ago, a 2-car garage and a 2-car brandnew metal carport, central heat and air, a 10000 gallon septic, a brandnew 24 x 24 feet workshop on a concrete slab, with sort of a front porch, nice flower beds, a 16 x 16 feet garden, 2 sheds, it sits on 2 1/2 acre and it has a big pond with fish and ducks, it is wooded and has wildlife. On a busy highway out in the country, about 5 miles from town, an elementary school at about 3 miles distance from the house.
The appraisal, done recently, is for 94,500.00, they wanted 86,000. I bought it for 1500. Houses in that area are very much wanted.
They will be leaving about the 1st of Sept. They need to downgrade to a smaller house closer to hospitals etc. They are in their late 60's, and had a lot of questions which I answered for them.
When I left they felt very happy and relieved. A young man had been to see them a couple of months ago and was going to do a lease/purchase with them and sell it to a buyer, but he never again showed up and they were anxious to have the sale done in summer, so they could move with "good" weather and not in winter.
Anyway, sorry for the long winded story, but I wanted to share this first Subject to with y'all.
Ladybug[ Edited by Ladybug on Date 07/11/2003 ]
Congratulations! Its always good to see deals happening...
If you don't mind me asking, are you planning to find a buyer for this property or keep it? I wonder because although I'd rather buy and hold (for the monthly cash flow), it seems 'easier' to buy and sell. I mean, my goal for this business is to put me out of a job and eventually have my assets working for me... Anyway...
Any thoughts on buy/hold vs. buy/sell?
Again, congratulations! Your marketing is working!
Thank you, JFWilson!
I plan on selling as soon as possible, after the couple moved out probably. I will check with John Locke when is the appropiate time to put my ad in the paper to sell.
Ladybug
Ladybug,
Very proud of you, the first one is down the rest get easier, I will help you with the selling proceedure when you are ready.
John $Cash$ Locke
Thank you, John!
Thank you for teaching me Subject to, what a great strategy! You bet that is what I am going to stick to!
I didn't find it difficult, it went nice and smooth, and I enjoyed doing it, and knowing I was helping this couple out of a real problem. Now, my only question is: when do I sell? when they have moved out? They will be out of the house around the 1st of September, they need to find a new house now, and I don't have anything for them (yet).
Thank you again, John. You are a blessing!
Ladybug
P.S. I am going to sleep now, got a busy day tomorrow, have to catch up on bookkeeping, have been concentrating completely on Subject to, which I enjoy.
In a few weeks please post the end of the story. Tell us about how you got rid of it, what you sold it for, how you sold it (or rented it) and your thoughts after the deal is done.
Good Work! No go out and do another one!
Congrats! I too have been very fortunate to have clients who have been very appreciative of my services.
Keep up the great work!
Derek
Congratulations. Just curious....how did you get it for only 1500? And what were your "subject to" agreements?
-Carney the "Newbie"
Ladybug,
Great job! You're on your way...
Tanya
Thank y'all for your good wishes. It is so nice to be able to share with friends who rejoice with one when good things happen!
Carney, I bought it Subject to the deed of trust staying alive, the way John Locke teaches. I bought it for 1500 because the couple had a tiny little bit of equity: $ 680.00, I offered 1000.00 first, and then they said for 1500 they would sell it to me, because they needed 1200 for downpayment on a dubble wide mobile home, a used one (that is what they think they will need, they haven't looked for one yet) and 300 for moving expenses. Because they are older people I agreed and I think I did a good purchase because the house is in very good condition. I may be able to help them get what they want, because of the friends who have that abandoned brand new dubble wide. Also, I know this couple, they have been renting a booth in my daughter's fleamarket, and I like to treat people good and a bit of service goes a long way.....
And anything may show up between now and September 1st.
Thank y'all again, and good luck to y'all!
Ladybug
My daughter just called me and told me that the couple came in this morning and told her how happy they are that they sold the house to me (they also said they think I am sweet - that was just their lucky day! LOL). It is nice to know that they are even happier the next day!
Makes things more solid!
Ladybug
Way to go Ladybug,
To your massive success.
Clif
WOW! I love to see that deals are being made all the time and I love to hear those stories! I am very new to real estate and was wondering what Subject To is? Is there a book I can get on it or an article online? Any information would be great. I need a way to break into the business and this sounds great!
Thx,
The Ghini
Ghini,
Glad to meet you.
Here is a link that will give you some information on Subject To investing.
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=146
Welcome on board this board, this should give you some info to help you get started.
John $Cash$ Locke[ Edited by JohnLocke on Date 07/13/2003 ]
Lady Bug, way to go , What one person does , another can do. What you do, will be done again, easly. Like John said.
Thank y'all!
I just got a call and it appears that two other Subject to deals are going to come through! I had worked on them already about a week ago. The people involved are a police officer and his girl friend, they each have a house, and they want to buy a new house together, so I will buy their present houses (2) and right now they are getting pre-approved for the new house.
I will keep you posted.
Subject to is a great way to do REI!
John, in my book you are a genious!
Ladybug
P.S. I may be able to achieve my goal of 10 houses per month, or come close to it!
I'll certainly do my very best![ Edited by joel on Date 01/23/2004 ]
Congrads LadyBug,
Thank you for inspiring us to acheive even more!
Jesse
Good Job ladybug. Im waiting on john's manual right now I'm overseas in the military but I will be back in about a year to get started. Im glad to see you are succeding. Do you have any potential buyers for any of the houses yet. Please keep us posted I like the motivation. [ Edited by JohnJr on Date 07/14/2003 ]
Hey LadyBug,
Congrats on the deals! How did everything turn out on these 3 deals for you? I saw your other 2 for 1 house post as well, but want more info on these. I am waiting on John's book as well. I may have to move back to OK and do some deals in my home town!
Thanks, and Congrats!
Ryan
Quote:
On 2003-07-12 14:32, Ladybug wrote:
Thank y'all for your good wishes. It is so nice to be able to share with friends who rejoice with one when good things happen!
Carney, I bought it Subject to the deed of trust staying alive, the way John Locke teaches. I bought it for 1500 because the couple had a tiny little bit of equity: $ 680.00, I offered 1000.00 first, and then they said for 1500 they would sell it to me, because they needed 1200 for downpayment on a dubble wide mobile home, a used one (that is what they think they will need, they haven't looked for one yet) and 300 for moving expenses. Because they are older people I agreed and I think I did a good purchase because the house is in very good condition. I may be able to help them get what they want, because of the friends who have that abandoned brand new dubble wide. Also, I know this couple, they have been renting a booth in my daughter's fleamarket, and I like to treat people good and a bit of service goes a long way.....
And anything may show up between now and September 1st.
Thank y'all again, and good luck to y'all!
Ladybug
Congratulations Lady bug. VERY Nice.
Ok so you say you bought it for $1500 how much are the loans on the property since you said the owners had just refinanced.
Thanks
The loan on the property is $ 80,000.00 for 15 years, balloon payment, monthly payments are interest only.
Ladybug
Ryno-n-AZ,
Going over the postings, I became aware how things change in the course of weeks.
You said you read the post on the 2 in 1 house. This one IS the house in question. Like you see, the sellers were supposed to have left by Sept. 1; they didn't, called me that they needed another month, OK, no problem. Oct 1 came and they still were busy moving out, so we settled on Oct. 6. When I saw all the trash on Oct 1, I asked them what they were going to do about it, they said they would have it removed or burn it.
Yeah, right. It was even more when I got to the house on Oct 7. Anyway, y'all know I got it all cleaned up, took me and my son-in-law and a very good friend 3 weeks! Then the property line problem arose, so still not able to sell it, although it was, and still is, squeeky clean. Then we had the abstract problem, hope to have it resolved by Wednesday the 10th of Dec. In the meantime I have made 2 mortgage payments - one payment was supposed to have been made by the sellers covering September -, insurance payment, taxes coming up, and Dec payment coming up.
I also will have to pay for their abstract, that they had updated for their mortgage in 2001!.
Now, when all is done, I will have my attorney request them to refund me the money for their abstract done in 2001, the September payment and 9/12 of the taxes.
Maybe, in hindsight, the deal went too smoothly in the beginning. It taught me to be more careful and to add some more paperwork to cover all these "little" surprises that may or may not surface.
The other two houses: the one from the Police man: he still hasn't moved; the other one was from his girlfriend, they broke up and she will stay in her house.
We will see.
The loghouse I bought recently: I was supposed to hand him his U-Haul money today, this afternoon. He can not get out from under his Realtor listing contract till January 2004, the realtor told him today that she sold his house, he is going to check if that is true. We will meet anyway, because he wants to return my deposit to me. I have an ad in the paper for this house, starting tomorrow. I'll just say it sold, and take names and phone numbers and tell them about the other house (the one with the abstract).
A lot happened since my very first deal, I learned a whole lot, saw quite a few other houses, but none really qualified, too many repairs, or unreasonable people demanding too much money where there was no equity at all, etc.
I am off to the next one: I will mail postcards today and just go on!
It is hard to get me down, I think the only thing that will really get me down is when I die, nothing I can do about that!! LOL
Y'all have great success!!
Ladybug
Quote:It is hard to get me down, I think the only thing that will really get me down is when I die, nothing I can do about that!! LOL
I like your determination Ladybug!
However, a good swift kick from sellers to m'crotch has never failed to get me down.
The only way to defend against that is to simutanously place John's manual as a defence mechanism after the presentation.
Hehe
_________________
With the proper motivation, the right amount of drive, and a pack of Mentos (R), you can accomplish anything.
[ Edited by Ichabod on Date 12/01/2003 ]
Not to poop on the parade from above but help me with the math...your gonna be "in" this house 92 % of FMV with just what you paid for it plus a sale commission (when you sell it) for a house you worked 3 weeks to clear trash and still have a dispute to settle and attorneys fees!!! where is the Profit in this deal when it is over? its been 5 months it should be over right? how did it turn out? Or is this a property you are going to keep for rental? or divide the 2 lots? then i would undertand and wouldnt be asking
wheelin'[ Edited by WheelerDealer on Date 12/01/2003 ]
I~m also confused...
Why would anyone want to do a subject to rather that just sell the home and get alot more $$ of of their equity.
In a years time here in Illinois home prices rise very quickly making it hard for someone not to have equity in their home.
Secondly, (this is just the way I see things).. as far as the new buyer is concerned...who is going to agree to pay higher interest rates for you to pocket? (plenty of mortgage brokers that will charge higher interest on a 'normal' equity making home loan)
Also who would agree to pay on a home for 2 years without being able to build equity?
My guess is the buyers on a subject to would be people with credit /foreclosure problems.. losers and scum who probably destroy the property and most likely will eventually skip town leaving a disaster behind.
I think my neighbor tried this with his second home and the people skipped town.. eventually ended up just renting the place out..
Guess I`ll have to wait for that Mercedes since I can`t imagine trying to find anyone with any kind of decent credit or character to go for this 'subject to'
Of course I could be WAY off too.
i~d love to hear how $$$ was made on this deal.
Yes, Stiffler, you are WAY off!!
Anyway, I'd like to share that today I got the Abstract!!, it took them only 5 days to update it, instead of the 7-10 days, they took into account that I had lost 15 days with the othet abstract office. That was really nice of them and I said so too.
I paid the $ 245.00 the sellers left unpaid in 2001, and $ 215.00 for my update.
The surveyor,a friend and I are meeting with the attorney next week.
The abstract contains all the paperwork that I already had, and it also includes the $ 10,000.00 mortgage the son secured with "my" property, his house is my property too!
It is clearly defined that I really own two houses.
Now, I would like some suggestions what y'all would do in this situation. Of course, I will discuss this with the attorney, however, any one of you may come up with a suggestion that is better than the ones I have thought of:
- 1 Evict the guy
- 2 Compromise and sell him part of the land, and record that for the future
- 3 Have him buy his house + land and have him make his own driveway
I am not a callous person, and I also keep in mind that my sellers did not intend to sell his son's house; they may have had some family agreements on the property but none of that has ever been recorded. The son is a guy with a very agressive attitude, probably very insecure. The mother and stepdad left some bills unpaid that I had to pick up and pay in order to continue with my deal and honoring my word.
I plan on putting an ad in the paper tomorrow, so it will appear on Tuesday and get this house sold.
Ladybug
Quote:
On 2003-12-01 22:05, WheelerDealer wrote:
Not to poop on the parade from above but help me with the math...your gonna be "in" this house 92 % of FMV with just what you paid for it plus a sale commission (when you sell it) for a house you worked 3 weeks to clear trash and still have a dispute to settle and attorneys fees!!! where is the Profit in this deal when it is over? its been 5 months it should be over right? how did it turn out? Or is this a property you are going to keep for rental? or divide the 2 lots? then i would undertand and wouldnt be asking
wheelin'
<font size=-1>[ Edited by WheelerDealer on Date 12/01/2003 ]</font>
There was no FMV ever stated.
It was said that it appraised for $94,500 so the FMV may be higher or lower or exactly $94,500.
In my experience when getting a loan on a house there are MANY appraisers who will value a house at 15 - 25% ABOVE FMV.
They do this so the mortg brokers will continue to use them. In 20 plus years of real estate investments I have NEVER seen an appraisal for what I would have considered FMV>
Not saying it doesn't happen just saying what my experience has been.
Quote:
On 2003-07-13 07:58, JohnLocke wrote:
Ghini,
Glad to meet you.
Here is a link that will give you some information on Subject To investing.
<!-- BBCode auto-link start --><a href="http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=146" target="_blank">http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=146</a><!-- BBCode auto-link end -->
Welcome on board this board, this should give you some info to help you get started.
John $Cash$ Locke
<font size=-1>[ Edited by JohnLocke on Date 07/13/2003 ]</font>
John, I just wanted to say that I am impressed with your support on this board, and for that reason alone, I am probably going to buy some of your products. I am sick and tired of paying money for real estate information products that are not backed up with support. Most of them say they will support you and then your first email you send asking a question , is never answered. I have yet to close my first deal, partly out of fear, partly because I dont want to come across as an amateur, and partly because I dont think I understand the process fully. There is two houses in the area I was considering making a subject too offer on. Anyway, thanks for being there for us newbies.
Little update on the house with the abstract now:
Today I had a brief conversation with my attorney; he said that the only legal way to resolve the issue of the son's house was to have him Quit Claim it to me, the Sheriff could take care of that and serve notice that he should vacate in 30 days, at the same time he can have a Court order to do a preliminary inspection of the house, to make sure that when the son leaves he will leave the central heat and air, etc.
The mortgage the son has in the amount of $ 10,000.00 is of no concern to me, it has been fraudulently obtained and the Bank will have to deal with him.
The official RE attorney has the abstract now, to give a title opinion and I will most likely take title insurance on this house because of all the foregoing issues.
The house appraised at $ 80,000.00 so far; the surveyor has already prepared a separation between the houses, so each can be sold independently from each other. The son's house will have 0.7 acres and the original one the remainder of 2.5+ acres, there will be an easement for the driveway, that way we exclude any future problems.
I also got a landlord's insurance on the son's house today, to cover any possible vandalism on his part when he has to vacate.
Ladybug[ Edited by Ladybug on Date 12/05/2003 ]
Keep going ladybug, being right across the border, like it or not you will be my inspiration, however this turns out , at least you are getting out there.
Dear Ladybug,
My deepest congratulations, you did not make a downpayment on that house you put down a Mordito. Way to go.
Exuberantly Lucio er Lucius
Today I received the RE Attorney's opinion.
It states, and I copy only the pertinent parts:
"From such examination, I am of the opinion that fee simple title in and to the captioned property is vested of record in Ladybug, less the mineral rights......, as shown by the Deed at Page......etc, etc"
Page 2 shows the whole back and forth of the Deed between the Mother + Stepdad and the Son and his wife.
"At Page 99 of Abstract...... there appears an unreleased Real Estate Mortgage in the original principal sum of $ 10,000.00 from R.C to CF Bank (O,N) dated October 26, 2002, and recorded in Book...."
"Requirement: This Mortgage must be released of record and the release shown in the Abstract"
"Requirement: You should obtain and file a Quit-Claim Deed from R.C and D.C, husband and wife, to Ladybug"
"(3) The Year 2003 ad valorem real property taxes are due and owing"
"Requirement: These taxes must be paid and you should be furnished with proof of their payment"
Tomorrow afternoon at 4 I have an appointment with my attorney, the surveyor will be present too at my request, and I will ask the attorney to take care of this matter.
We will have the son sign the Quit Claim Deed and give him notice to vacate within the appropriate time frame as stated by law.
This house really got a long tail, and I sure hope it helps someone else who may find a problem like I found.
In talking this afternoon with the RE Attorney, he said that when we buy a house, what we are really buying is the land, the house is an improvement on the land, and when we acquire a property=land it comes with whatever is built ON it. That is why the son's house became my property, it sits on my land.
Ladybug
quote: by mr mike
There was no FMV ever stated.
It was said that it appraised for $94,500 so the FMV may be higher or lower or exactly $94,500.
_________________________________
mr mike. Your splitting hairs on page 2 .
your right, "Might be". however it is a good meadian for an EXAMPLE. using lady bugs figure
[addsig]
Quote:
On 2003-12-10 01:16, WheelerDealer wrote:
quote: by mr mike
There was no FMV ever stated.
It was said that it appraised for $94,500 so the FMV may be higher or lower or exactly $94,500.
_________________________________
mr mike. Your splitting hairs on page 2 .
your right, "Might be". however it is a good meadian for an EXAMPLE. using lady bugs figure
Wheeler I do not believe appraised value and FMV are about equal
I have a house appraises at $115K
Even on SPECIAL it would not sell for 85K
[ Edited by MrMike on Date 12/16/2003 ]
Will you two, please, go outside and pick a fight there? We don't want broken furniture inside!!
FMV is 95000.00!!
Appraisal in 2000 was 94500.00!!
Balloon mortgage is 80000.00
I am selling for 100500.00, to sell it fast!
I need the money to go on and fill up the gaps I made going with the extra very unexpected expenses.
I was going to sell for 105000.00 but now I reduced it a bit to sell fast.
BTW, the other house is mine too now, so I will be able to sell it after the guy leaves, for about 85000.00. I will have it appraised just to make sure.
Ladybug
Thank you Lady Bug.
mr mike. try contibuting some usefullness to these threads will you??[ Edited by WheelerDealer on Date 12/11/2003 ]
I am a new member of TCI and I just wanted to first of all say thank you to John for the opportunity, and to everyone else for their posts. I have been involved in, and studying investing in several niches for about five years and am just learning "subject to". This whole discussion has been both enlightening and interesting, not to mention comical at times.
Ladybug I sympathize with you as I have had similar situations go bad for me in this business. Just hang in there Girl. Life's just a bunch of learning lessons. Thanks for sharing all of it with us so we can learn. And thanks again John for the forum and the invitation to it. I am really enjoying it. It helps emmensely to talk to people who understand what you are trying to accomplish and that will help you along the road.
Happy Holidays to everyone
and God Bless,
Karen
OK, I saw my RE attorney today; we spent 3 hours together, and also went to see the property in question.
He had never heard of Sub-2 till I told him; I explained it to him in a few simple words and he fully grasped the whole thing in less than a second! He thinks it is a great way of RE investing and told me that the only thing he has to worry about is not to trigger the DOS clause. Yes, he got it!
While we were looking at the property, from inside his truck, the son came out (curious, of course) and asked if we needed help.
The attorney said that with a new law in OK it will be easier for me to get that 2nd house, and clean up my clouded title.
He will write a letter to the son, telling him that he needs to Quit-Claim the house to me, and if he does not do so, we will file suit for a Quiet Title.
When I was leaving him at 5PM he was talking to the surveyor about defining the property line between the 2 houses, and when that is done, we will file the new plat with the County. That should clean up the whole mess.
Talking about his fees, he said not to worry, first get things done, and when I am making money off of my properties we can talk about paying him, my word and honor were good enough for him. He would then not charge me more than $ 125.00/hour, and he may need me with clients who don't speak English, and I can translate for him at the same fee, which may even out whatever I may owe him! Remember, he is the husband of a former ADA with whom I have worked a lot in Court, translating mostly for Mexicans with DUIs; his wife and I have become friends over the years.
It was refreshing to hear him so enthused about Sub-2, he looked over my paperwork, and found it all correct - I had adapted all the forms, comparing to recorded paperwork at the Court House - and very complete, and he also encouraged me to get more properties and he especially liked the way we sell them no qual.
He will call me after defining the new property line between the houses with the surveyor, he needs to do a little research to get everything air tight before sending off the letter to the son.
Ladybug
ladybug, let me join the "congrats" party. you did very well. let me also say a big THANK YOU for taking the time to share intimate details of your transaction.
this is what helps people. you've run into enough probs with these places that a lot more people will be able to learn from your documentation of it - and be prepared!
excellent.
Im sure the original owners of the house didnt forsee you kicking their son out and taking his house as part of the deal. Not sure if I should be happy for you or sad for him.
Jackman, thanks for the kind words. I am glad if my experience helped anybody out there.
As for "kicking out the son", of course that was not the intention of the sellers, neither was it mine, and I am not feeling happy about it at all. However.....
Just to recap" the son was the one who got this whole ball rolling by wanting to deny me and my future buyers the use of the driveway, demanding that I have the electric pole moved to another location, and all in all being very aggressive.
This prompted me to get the plat to verify his claims, and if he was proven right I would have had to build a new driveway, and would have done so, also I would have had the electric pole put in a different location.
As y'all know it turned out very different: he was and is on my property.
Now, I discussed with the attorney if we could do things different and not kick him out. His advise was, that that would create a whole lot of problems, taking into consideration the son's very uncooperative behaviour, and we could end up in years of costly and lengthy legal battle, which would not benefit anyone but the lawyers; he could make life miserable for my buyers, for instance, like he was starting to do to me from the very first time I was there to assess all we had to do to clean up the place.
His advise was to simply follow the legal rules and get rid of the problem once and for all. Less costly and time consuming.
Ladybug
Here's an update on my 2 for 1 deal:
I have a potential and very interested buyer.
They want to buy both houses on the property, which would serve their purposes really well.
BTW, the son got the letter from my attorney to sign a QuitClaim Deed and to vacate the house in 30 days. We'll have to wait that period of time anyway.
My buyers want to have a re-zoning to commercial because they will have a pet orphanage in one house, have one of their people live in the other and get a storefront for the husband's business in the metal building. This takes about 6 weeks and costs about $ 400.00.
I have informed my buyers about the problems I have and have had with the property and that I am in the process of solving them, and how I am solving them. They have no problem with that.
Also, they own a house in another place, about 60 miles from here that they were going to sell (the tenant is the person who will be occupying one of the houses on my property). They don't want a realtor and asked me if I would consider trading. I said I will consider that and they gave me the figures.
This would be the outline, for now.
Their house:
FMV: 98,000.00
Owe: approx. 57,000.
My property with both houses:
according to my friend the appraiser:
175,000.00
mortgage: 80,000.00
My appraiser said that if I were to trade, I should offer 85% of the FMV of their house to them.
They would refinance in two years.
Any suggestions or opinions?
Ladybug
Just want to add my voice to the growing cacaphony of appreciative followers of his saga. I just emailed the link to myself with a note to keep checking up on your progress, Ladybug! Thanks for sharing so much. Your now 6 month saga has been very informative regarding the nuts and bolts of Sub2 transactions, not to mention a testimonial to your steady determination and patience. I like how you educated your lawyer along the way, since I'll have to be doing the same myself. Now it sounds like you're close to folding one deal into another--just be sure you're not left cash poor in the process--and picking up new "clients" along the way. Bravo!
Well, here is another little update:
My serious prospective buyers decided not to go ahead because of the problems with the son (neighbor). I cannot blame them.
Monday I had a meeting with my attorney and he said that for the time being I better rent out the house to stop the "bleeding", because the Quiet Title file could take some time, and the QuitClaim to be signed by the son probably will not happen, under the circumstances it will be difficult to evict the son.
Also, he advised me to form an LLC, which I have now done. I sent it to be filed by the Secretary of State of OK. As soon as it comes back, I will Deed the property to the LLC. This should protect me in case the son would start a lawsuit against me, because he is money deprived, and has been for a long time, and may see this as an opportunity to get some green cash.
My attorney has not sent the letter yet to the son, because he wanted me to be "safe" first; there are a lot of people who know this guy and since my attorney did some investigations of his own about him, he decided to play it safe. This house has cost me a lot already.
Anyway, I put a "For Rent" sign on the house, and will lease it for 6 months or a year. At least that should cover my payments on the house.
Ladybug
So how much have you made or lost from the deal?
I lost quite a lot so far, moneywise and timewise.
Nevertheless, this morning I awoke with the solution to my problem: I am going to make my problem a money maker, big time!
Since I have to wait for the slow court process I am going to do the following (also, because in the near future, maybe just a couple of years from now, the gov. will buy my property to stretch the highway that runs there):
First: the property I have is 3.5 acres, less about 0.7 acres on which the son's house sits, is about 2.5 acres.
I have my mobile home back and I have to move it. I will move it onto the property, on the left back side of the land, I will place another MH or a small manufactured house that I can get real cheap, next to a metal workshop, and another one in the back of the property. I will put in 3 septic tanks. The electric co. will place the necessary poles and meters, so will the water district, for free, they are getting more customers!
I will put in 2 driveways, one leading to the back of the land, ending in a parking place, one to the house next to the metal shop. Also, off of one of them one will lead to the 2-car garage of the original house (no war with the neighbor, for now). I will put up 4 ft chain link fences to separate the 4 dwellings, and each will have a nice, big yard around their house.
I will rent them all out, to securely screened, credit checked tenants. My attorney will assist me in this.
I have applied for a refi of the loan, which at present is a 80,000.00 balloon payment in 2015, at 10%, monthly payments of 712.07 interest only.
My refi will be 89,000.00, interest of 5.75, payments of 519.38/mo.
The 9,000.00 cash out will pay for the improvements.
The house will rent for 750.00, the MH for 450.00, the other two for 550.00/each.
This way I will recoup first what I have invested in mortgage payments, cleaning up, etc.
Since this is outside city limits I can do this, I am not restricted.
I am absolutely not a fan for renting, but in this case, with carefully screened tenants and well drawn up contracts, it is the only way I can survive the problem, and turn a negative into a positive.
------
As a side comment:
I have a very trusted friend who helps me with everything, keeps an eye on the house, etc. He was there this morning checking on the "for rent" signs, to see if they were still up. The son comes out and starts talking to him. He said that if he, my friend, saw me to tell me that he wanted to talk to me, he wants to make a deal.
OK, so my friend and I go to the place in the afternoon, we look around the place, deciding the setting of the 3 additional homes, etc., and just before leaving I approach the neighbor's house, out comes his wife, all nervous, wringing her hands, and trembling (no kidding!), she says her husband is at the back of the house and he wants to talk to me.
Out comes the husband and says: "Can I help you?"
I say: "No, but I heard you wanted to talk to me?"
He asked how much I want for the house, he is willing to make a deal with me. All the time he is wringing his hands too (must run in that family) and his voice shakes.
I told him, no I am not selling anymore.
He insists that he wants to make a deal. I tell him, no I am not interested.
All arrogant he tells me that he is going to put a gate on the driveway and fence his place off from mine, because his dogs come onto my property (supposedly). I just listened to him, and refrained from answering or acknowledging what he said, and when he was done, I bid him a good afternoon and left.
I would not know how he would be able to buy since he doesn't work, his wife doesn't work, and he knows how much I was asking. He told all my prospective buyers how much I was asking and how much I paid for the property.
Anyway, just an update and how I am going to resolve my problem, because selling is not an option right now anyway.
Ladybug
Sounds like you've got a pretty good plan for the property. Again, thinking outside the box may make a bad deal turn good again.
The only thing that I would have done is here the son out. If he has, or thought he could find a way to get financed (not thru you), what difference would it have made to you if he isn't working? Was he just wanting to buy his current house, or the whole thing?
I think you might have dropped the ball a little there. If he couldn't get financed, you'd be just where you are now, and if he could, you could've possibly sold off half of this deal and still had another house to see free and clear.
Roger
I know it is no business of mine wether he is working or not.
He was wanting to buy my house, the one his mother sold me.
I don't think he is aware of the fact that his house also belongs to me. So he wasn't talking about that one.
This family, the mother and the son, apparently like to con people. In the last couple of months I have heard some weird stories about them. Of course, that has nothing to do with me, and is of no concern to me.
What I do know is that the mother hasn't been truthful to me: she said they had paid the last month that they were staying in the house, to the mortgage and they hadn't; they were going to clean up the trash and they didn't, and some more things.
The son saw the "for sale" sign and talked all prospective buyers out of buying, and suddenly, when I put up a "for Rent" sign, he wants to buy?, the very next day, after I put up the new sign?
I smell a fat, nasty rat!
No, I think I have resolved my situation and will leave it at that, for now..... till the highway comes, then I will sell.
Thanks for your reply.
Ladybug
maybe you would be kind to recap a few things for me.
1 i understand that you found out by accident that you own both houses. Was this because the property was never properly divided?
2. If you do own both propertys then how does the son continue to right of posession?
3. If you do own ALL the land AND the sons house which was a so called "bonus" for lack of better word, the why would he have to sign a quitclaim deed? Isnt he tresspassing?
4. does he have any squatters rights?
The only thing I can compare this to is when I was using a 5000 sft. wharehouse that sat on my parents 10 acres. When they sold the place I had to move. I cant imagine that if i refused to go that things would have gone so well for me as they have for this guy!!
Wait a minute!!
On 2004-01-23 23:41, Ladybug wrote:
"...........I don't think he is aware of the fact that his house also belongs to me........"
You mean it has been 6 months and the son still does NOT know you own HIS house too??? Does he have his own adress? mailbox? utilitys?
I think I agree with Raj. There has got to be ball that been dropped here.[ Edited by WheelerDealer on Date 01/23/2004 ]
WheelerDeeler, the son has no squatters rights.
My attorney said that we cannot use the word trespassing, because the guy "may be under the impression that he owns the land his house sits on", and in order to have a solid case, he is wording it in the clearest way, so we can file a Quiet Title suit. The son, because of is volatile nature, could set fire to the whole place, if approached directly, and although he would go to jail for that, that would not remedy the situation.
Also, we keep in mind that his mother may not have known that her son's house is part of the property, although the stepfather thinks differently. The stepfather and the stepson do not like each other, which gives for a very biased opinion.
I don't like the pussyfooting around the guy, I like the direct approach, but my lawyer says, no, we do it all the legal way, have air tight proof that what we say is true, substantiated by the different documentation we have.
So, things take time, you know, the legal oars move slowly, or whatever the saying is.
And... I still hate the idea of "kicking" somebody out of "his" house, and I am looking for a little sweetener to do so. I am trying not to be mean because he is such an arrogant and unkind person. I am trying to be as objective as possible.
Since I put the case in the hands of my attorney, I will let him direct the course of action that is best suited in this situation, which is quite unique.
Yes, it has been six months. We have been working on this since mid-October. His mother and stepdad lived in it for another 3 months, before I got the keys.
Then, because he made such trouble about the driveway, we began to pull plats, etc. We have been working hard to make sure that what apparently seemed to be true, is true.
He has the same address, only labeled "unit B", separate utilities.
We are still doing a re-double-check that it is true that both houses belong to me.
It is a very uncomfortable situation.
Ladybug
That clears things up.
You found out you might own everything by accident and are keeping it to yourself untill you are for sure.
Something just occured to me. You said that they are shady folks and you thought that the mother is a con.
Maybe the one who got the con was the son. maybe the mother lead the son to beleive she was giving or gave this house and land it sits on to him. Or also, maybe the mother didnt know she needed to make the property seperate before she sold to you. After all, the mother didnt tell you that the sons house and land was part of the deal right? I mean the mother represented that the property line was much much smaller area than what you found it to be. In that case there is no con, just ignorance on their part.
If this is the case, one peice of property, the son is no different than i was in using my parents property. He HAS got to go! or does he?
If you have insurance it might be best if he burns the place down. (joke)
I dont know anything about sub2 deals. Does john locke teach or reccomend that an inspection and a survey be done before you take posession?
Would you do these 2 items before you buy another one?
I always do each so im curious.
I do want to ad that i think it is great that you have shared your experience in such great detail. There is a lot all can learn. This has been the most educational thread on this site.
ONE LAST QUESTION:
-In the beginning you thought you bought one house.
-In the beginning you thought the son was just a pesky neighbor that you didnt like.
-In the beginning you thought all you had to settle was who owned the driveway.
If it was the intent of the mother to have given this house and small peice of land to her son because that part of the property was not disclosed to you as being part of the deal, are you going to take advantage of the situation or are you going to do the right thing?
_________________
B.G. & Wheeler D. LLc Inc. and Trust
(A division of: Half Vast Enterprises)
"Most american millionairs today (about 80%) are first generation rich"
[ Edited by WheelerDealer on Date 01/24/2004 ]
Hi, WheelerDeeler,
Thank you for your questions, I like the interaction of questions on your, and everybody's part. It opens other perspectives thay may have eluded me.
I am glad you find this an educational thread; it was and is my intent to keep it that way, others may learn from these experiences or help them avoid the problems that I have found.
Now, to your questions:
"ONE LAST QUESTION:
-In the beginning you thought you bought one house.
-In the beginning you thought the son was just a pesky neighbor that you didnt like.
-In the beginning you thought all you had to settle was who owned the driveway. "
This is correct. I found it beneath me to fight over a dumb driveway, and my initial (inside) reaction was, well, I just put in another driveway, so be it.
The very next day, the stepfather showed up at my daughter's store to pick up some very old and irreplaceable pictures that I had found, and had left there for them to pick up, and I asked him about the driveway, he said it belonged to me and not to listen to his stepson.... he was going to say more when his wife came into the store. That is when I decided to pull the plat, and the rest is history.
"I dont know anything about sub2 deals. Does john locke teach or reccomend that an inspection and a survey be done before you take posession? "
John Locke recommends to do a title search, in ordinary cases there is no need to do a survey. I do do the title search, and do them quite thorough, first because as a beginner, you don't want to make mistakes, second, it is my nature. I got help at the PR office, and therefore I know it was complete. Normally you don't do a title search on the neighbor's property.
Now, when I pulled the plat, and did a title search on the son, two things of interest show up, comparing with the one of the house I bought:
1.- the back and forth of the deed is the same, mentioning the "East 370 feet, etc"
On the assessor's record (My house)it shows that the "East 370 feet, etc " with the land value and improvements (house) value on it.
2.- On the assessor's record of the son it shows: (and this is the exact text) PT NW NE NE, lying N of Hwy LESS E 370 " thereof", then the land value but also improvement value, which means a house!
The value of the land on my seller's record says: 8244, improvement 31014
On the son's record: land 18499, improvement 17328
On the very first Deed, when an aunt of my sellers deeded the whole shebang it was all of the land, later, they separated the East 370 feet, etc, so the rest of the land on the West side of the son's property is his, there is no building on it, just trees and grass.
"If it was the intent of the mother to have given this house and small peice of land to her son because that part of the property was not disclosed to you as being part of the deal, are you going to take advantage of the situation or are you going to do the right thing? "
I really don't know for sure the intent of the mother, I assume she just wanted to sell her house.
I do want to do the right thing, because I have to live with me for the rest of my life and thereafter!
That is why it is taking all this time, I do not want to do something that I will regret later, and may be not be able to rectify it.
Now, since we have found one pin (the others appear to have been removed) we will do a new, complete survey of the whole thing, like starting from scratch, and put up visible stakes, to be seen by everybody who cares to look at them. Then put up a fence where it really belongs on both the East and West side of the property. If the son's house still sits on my property, we will have to solve the situation: I am inclined to propose the separation of the two houses, put up a visible line, and "request" he buys his part for a reasonable sum, draw up the necessary paperwork to get the proper recording in the PR . This is only me thinking aloud, others may not agree, however, I am arrogant enough to say, I own it, I decide what to do with it! no matter if my attorney, husband, surveyor, etc say just take it. I do have a big problem with that, even if the guy has been jeopardizing my business all this time, and is a very unpleasant person.
For now, I have found the solution to my "money-bleeding" problem, and will put it in place (maybe he doesn't like to have so many neighbors, and maybe he will just move?), it is hard to stop me.
As I said, I do own the property and I will do what I think is best, under the circumstances.
Thank you, WheelerDeeler, for thinking with me, I appreciate it very much.
Ladybug
[ Edited by Ladybug on Date 01/24/2004 ]
Ladybug,
I hope you keep us all abreast. The breakes in the thread are almost similar to a "to be contnued....." without a release date to the sequal !!
Talk about a can of worms if the son decided to sell his house not knowing the land underneath it is not recorded as his.
Surely the son just wouldnt "walk" away. He has got to think that what he is living in has value. Especially if the intent was for him to own it.
If in fact this a recording error on somebodys part, And he files suit to "correct" what he feels should be his, you might be looking at legal defense that might cost more than what the portion of land under his house is worth.
I do like the part that you are going to divide the rest of the property to bring in some $$
[addsig]
Good afternoon, WheelerDealer!
Yes, we have thought about his "maybe wanting to correct", but according to legal counsel, that won't fly.
Look at this, and tell me your impression:
In the abstract there is a deed which deeded all to the aunt + seller/husband.
April 1, 1989: Aunt + seller+husband make warranty deed to: seller+husband and son+wife.:
All that part of the NE/4 of NE/4 of NE/4 situated North of the land herefore conveyed by Mr z to Rogers County, OK, by Deed, which deed is recorded in Book .. at page .. of the records of the County Clerk of RC, OK, and all that part of the NW/4 of NE/4 of NE/4 lying North of State Highway # 20 in Section .., Township .. North, Range .. East, according to the US gov. survey thereof.
Nov. 27, 1991: my sellers QuitClaim to son & wife: The East 370 feet, etc.
Jan. 11, 1994: my sellers and the son+wife QuitClaim to a widow, Mrs "X":
All that part of the Ne/4 of NE/4 of NE/4 situated North of the land herefore conveyed by Mr Z to Rogers County, OK by Deed, which deed is recorded in Book ... at page ... of the records of the County Clerk of RC, OK in section .., township .. North, range .. East
June 1, 1998 Warranty Deed from son to sellers: The East 370 feet, etc.
June 1, 1998 Warranty Deed, corrected for range only. Son to my sellers the East 370 feet, etc.
June 11, 1999: QuitClaim deed from son+ wife to son himself: The NW/4 NE/4 NE/4 of Sec... township... etc, less and except the East 370 feet thereof.!
June 18, 1999: QuitClaim deed, corrected, from son+wife to son himself:
the NW/4, etc, LESS AND EXCEPT the East 370 feet thereof.
(This deed corrects an error in the legal description decsribed in .... to reflect the proper range)
October 26, 2002: Mortgage with Commercial Federal Bank:
Mortgagor: son
for: $ 10,000.00, maturity date 11/18/2007
Conveyance:.bla..bla..bla......the following described property:
The East 370 feet of the NW/4, etc.!
Ladybug[ Edited by Ladybug on Date 01/24/2004 ]
I continue to follow this saga as well. May I change the subject for a moment? If you're putting in 3 trailers, could it be cheaper to put in one larger septic system (if possible) instead of three separate systems? MIght be worth asking, unless ordinances prohibit...
unless there is some information missing. it looks like the chain of title is, or was filed out of order along with filings of deeds form partys that didnt have interest in the plats! Am i reading this correctally?[ Edited by WheelerDealer on Date 01/24/2004 ]
The paperwork in my possession are copies. The whole chain of title is in the abstract, which I had updated.
I posted this earlier, however here is the title opinion by the RE attorney, independently from each and every party (I only met him after he had done his work):
"From such examination, I am of the opinion that fee simple title in and to the captioned property is vested of record in Ladybug, less the mineral rights......, as shown by the Deed at Page......etc, etc"
The captioned property is: The East 370 feet, etc"
You were, correctly, assuming there could have been an error, or ignorance on the part of the son and/or sellers, however, in his QuitClaim deed it specifies twice, because of the correction, Less and except the East 370 feet, etc. So he sure does know, and so do his parents, the same says on their deed, and the deed they signed and I filed.
The abstract is with my attorney now, but at the time when I had it here I read almost every page of it, it is interesting anyway.
As I said, the one thing I want done again, to exclude any kind of error, misinterpreting, or whatever, is a new survey, with visible stakes or pins or whatever.
Ladybug
P.S. Getting the papers again, I see I made an error in a date, I will correct in the original post by editing it.
Ladybug,
It has been 3 weeks. Any new news?
[addsig]
I must say that this is one fascinating story that everyone should be able to learn from. Thanks for taking the time to keep everryone here informed throughout your situation. One question I have: Is the son paying any property taxes at this time?
Once again great job!
Bob
Thank y'all for your interest in this saga.
A little update:
My attorney has sent a letter, after we re-double checked the property lines, leaving visible stakes this time with the nice colorful ribbons attached.
The stakes were pulled, but the pins are there to stay.
In the letter my attorney informs the son about the whole situation and requests him to sign a QuitClaim Deed and invites him to either call him (the attorney) or visit with him; he also tells him to desist from using any derrogatory information about me, my company or my property to any prospective buyers, immediately.
The letter was sent last Friday, so far no reaction.
The son has paid property taxes on his property, which has a different legal description.
Today I went and met with a prospective buyer at the house, he was with his wife an newborn baby. They liked it very much, and he suggested he wanted to make a 20,000 downpayment if he bought it right now; he also inquired about a lease option with 3,500 option money and 850 rent (I have it up for rent, but I advise my prospect that I am also willing to talk about selling or L/O, I am very flexible). His wife is deaf and he wanted to explain to her the options and will call me back.
He liked the house and the metal building, also the 2.5 acres, which we surveyed for this house.
The son and wife weren't home, so no worries there today, although he wouldn't do anything with me there.
That is it for now.
Ladybug
Ladybug:
First off congrats on your terrific success, $1500.00 for a 2 1/2 acre property just blows me away, what a find!!! How did you get your info on how to proceed with a "subject-to", my problem is that I am in california (southern Cal) and those type deals just do not exist, ever!, things out here are expensive for a small property, how does something like this work in a calif. market?
I bought John Locke's training manual and he himself taught me a lot over the phone and that is how I buy Subject to.
I notice you just looked at the fact that I gave the people $ 1500.00 U-Haul money, the property is worth about 105000, for the 2.5 acres, in 2 years from now. Oklahoma is a lot cheaper than California, that is for sure, but I understand that you can do these deals also in California or anywhere in the USA, the only thing that changes is the numbers.
I bought in a slightly more expensive area a house for $ 10.00, the FMV is 91600 and I am selling it now at 105000, the value it will have in 2 years from now.
This house is in a subdivision on a lot with a large back yard and nice front yard.
You only need motivated sellers to get these deals, on houses with mortgages that are 1-2 years old.
Ladybug
Thanks for your insight. Yor right the ****Must Reach Freshman Investor status before posting URL's***arket is a very different animal, a lot of what I see in other states I wonder if it is possible in calif. Are there others who feel that "subject-to" are do-able in this crazy expensive market? are there other creative models to explore for this part of the country?
Thanks
Ladybug,
I am still confused. Do you really think the son is going to sign a quitclaim on the house and land he thinks he owns, pack up and move?
The abstract shows you own the property by measure, but surely he will be interested in fixing the error in recording as I am sure he beleives so, after all he is paying a tax bill every year.
Even you didn't think you were buying his house either. It was the driveway that was the issue.
He may not be a nice man and you might not like him BUT>>>>
I still am curious. Are you going to take a mans house that was not represented tas part of the deal in the first place??
_________________
B.G. & Wheeler D. LLc Inc. and Trust
(A division of: Half Vast Enterprises)
"Most american millionairs today (about 80%) are first generation rich"[ Edited by WheelerDealer on Date 02/20/2004 ]
WheelerDeeler, I am not going to kick a guy out of his house, not my way of doing business anyway, not with this issue.
The mother called my attorney first on Wednesday and she disputed that her son's house sits on my property, and that she would have to talk to her son. She even claimed that she told me that the driveway was his' and that I would have to make a new one, this is absolutely not true, if I would have known or even guessed or suspected that there were problems about that or anything else I would not have bought that house at all!
I buy a house to help people solve their problem, not to acquire a problem myself (have enough of those without strangers adding to them! LOL), and certainly not to sell a problem to an unsuspecting buyer, that would be stupid and definitely not the way to build a good reputation in RE business, or in any business for that matter.
Today she called my attorney again and she agreed that there is an error in the Deed (-we agree on that-), and that they were willing to come talk with him and settle the matter if we would agree on changing the Deed to where he will have his property on his land and define the property line on the new Deed.
Of course, this is what really would be fair to do, and my attorney and I agree on that. He and I will have a more thorough conversation next week.
The reason we requested he sign the QCD was to really get his attention; we did, though he didn't call, his mother did.
He did quit interfering with my potential clients, which is a plus, now I can proceed to sell the house with a Deed that will have the correct parameters in it.
Ladybug[ Edited by Ladybug on Date 02/20/2004 ]
What was the final result! I cant believe no one is wondering....
Ladybug,
You hang in there and remember that you have a great support team behind you. I have no doubt that 2005 will be a great year for you. Congratulations on your grandbaby on the way and I look forward to reading your post on Jan. 1, 2006 titled "My Comeback In 2005!"
Best of luck
Larry[ Edited by LarryNut on Date 02/08/2005 ]
Thank you, LarryNut!
That was a very nice reply and I appreciate it.
Right now I am putting together a list with 1 - 2 year old mortgages and one of homes for sale by owner to send my post cards to.
Like I said, I am starting all over and I am as excited as when I first started.
At night I am teaching Spanish and also English (to hispanics) to make some money to fund my Sub2 business + I make money translating in Court. I am doing things a lot different than first. You know, If you do the same thing over and over you get the same result. I learned from my mistakes and changed a few things, though NOT in the way to do Sub2, just in my personal life.
I hope you are doing well and having success with Sub2, which is a great method! John Locke has written a great manual.
Success to everybody,
Ladybug