Motivated Seller's Get Out Of Jail Card!
Interesting and effective Motivated Seller angle I recently have been working and thought you need to be aware of. Well, that is if you’re seeking a system of truly motivated sellers contacting YOU!
I had an issue come up on a deal that peaked my interest from a previous closing. I was having a big problem getting clear title on a short notice for a deal I was wholesaling.
Come to find out there was a cloud on the title and that was all separating me from a check with my name on it. The sellers knew nothing about the cloud previously but we ended up resolving it….but not without some legwork involved.
See, these sellers definitely fit my mold of being motivated but in the game of buying/selling houses if you don’t have clear and conveyable title then your deal can come to a screeching halt!
The seller of the house had his father quit claim deed the house to him (the son) years earlier. The only problem now is that there is a cloud on the title keep us from closing. The kicker in the whole deal to resolve is that the cloud on the title was recorded by a BAIL BOND company!
Some of the questions obviously are:
1) How in the world did AAA Bail Bonds get a
cloud on this title?
2) How do I get this cloud resolved?
3) Is this possibly a “back door” approach in
locating other motivated sellers?
With a bit of research it was determined... that the bail bond company had recorded a lien on the property years earlier. Why? Well, the seller’s father had allowed this property to be security on a legal matter concerning a bail bond.
Once I found out the “why’s” it was easy to get the cloud cleared. See, in these types of matters bail bond companies are very good at recording their interest on a property in case someone never pays. However, they can be very BAD at making sure the lien gets released after someone fulfills their financial obligation to the bail bond company.
So for me it wasn’t all that big of a deal getting the title cleared to get my big $$$ paycheck. Now it started me really thinking after that which is where my research has led me right here to reveal to you this secret: START CONTACTING BAIL BOND COMPANIES!!!
Now doesn’t that speak volumes to the power of real estate? I mean you even have bail bond companies keenly aware on the financial leverage power of real estate!
I’m going to take a timeout right here and state that you can take many different approaches to find truly motivated sellers. My primary philosophy is quit looking for properties and concentrate on the people
with problems and this is one angle that definitely fits that approach.
Bail bond companies will secure interests just like I’ve mentioned and sometimes the person will default on their obligation. Now, how many bail bond companies are in the real estate business? Let me answer that and say not very many. They need their cash and
to move on and as an investor you’re the answer!
In networking with some of these bail bond companies I found some interesting things that a few were doing. In order to secure the working capital some bail bond companies obtained a secured line of credit with a bank and property as collateral. In addition, some bail bond companies occasionally need to sell a property to raise working capital in meeting their cashflow needs.
This is starting to get interesting isn’t it? Well, this isn’t a get me a 100 deals a month technique but it is VERY effective in locating some deals in places you’d never have thought of before.
Take the time to send some letters and network with bail bond companies simply asking, “I’m John/Jane Doe a real estate investor. Do you have a property you need to sell or have a lien on with any of your
customers that needs to be liquidated?”
Yes, when you get on the phone with some they will think you’ve lost your marbles. Just be prepared to simply state how you can be of beneficial interest to them as they are NOT in the game of real estate and this can definitely work to your advantage.
In the end, its all about creating win-win situations and the deal has to stand on its on merit making prudent financial sense for you as an investor. Just take a minute to think and act “outside the box” here and pick up some quality deals working the bail bond system.
Here’s to your success and good hunting as luck has absolutely nothing to do with it!
First of all, I like your motivation Scott, it's exciting! Thanks for the article. I was very interested b/c you started talking about cloud on title, this is my present dilemma and the article was a good one.
Although, I have to agree with $Cash$ I have come across some training material and talked with a few bail bonds people, when I was investigating the note business and found out that bail bondsman are a good resource for "distress owners" and maybe an excellent referral resource while prospecting wholesale deals, but they are mainly interested in liquidating their position.
I like the idea of networking with them, I've heard the idea before and did not really start an ad campaign with them, but it's good to be reminded!
Thanks for the Article!
Scott,
Being a licensed Bail Bond Surety Agent by the Division of Insurance in Nevada and owning my own Bail Bond Company 24/7 Bail Bonds plus being a private investor, I guess the secret is out now.
One problem with your plan. First we collateralize the Bail Bond with a lien and note on the bailee's property. This is so if the bailee skips we have recourse.
However, even if we foreclose on the property we can only receive the bond amount, in other words if the property is worth $100K, the balance is $50K and our bond is for $10K then if we foreclose the maximum amount we would recieve is $10K. The rest of the money would go to the person who put the property up for collateral. This is done to protect the consumer.
Every Bail owner I know would rather sell the note and lien on the property to a "note buyer" than go through a forclosure process to get some money out of the house.
I believe the state regulating division that regulates bondsmen might get a wee bit upset if the bondsmen doesn't release the lien when the bond is exonerated.
Not saying it does not happen, it is very difficult to get licensed as a bondmen plus in my case posting a 1/2 million dollar surety bond, so there is a lot of liability concerned.
So the majority of bondsmen adhere to the rules and regulations set forth by the regulating state body.
Note buyers would do better with bondsmen in my opinion, of course I have been there and done that.
John $Cash$ Locke
Surely there must be those times when there is no bid at the auction. In that case, wouldn't the bondsman receive title to the property and become responsible for the senior liens? And how much of a discount should be offered to purchase the defaulted note from the bondsman?