landlords, how long to get rid of squatters

[look 171]

Originally Posted by john70t

What occured between John and his uncle should be irrelevant to any 'outside purchaser'.
It's whos name on the title, and whos right to sell which matters.
A copy of Judgement taken to the Title co. could clear this up.

Caveate:
If the uncle 'plans to sell to you' despite listing on an MLS, this is no longer and 'arms-length transaction'. It sounds like fraud,
(Not an attny, just IMO.)

Explain that will ya, when you get a chance?

[john70t]

(Not an attny. There are a lot better RE minds here, and the concensus is pretty strong against...)

First, any property transfer ideally should be a clean break.
Doing a title search first to ensure no easements, encumberances, land-use rights, etc. exist so you can call the property your own at conclusion of the sale. All kinds of skeletons can pop out out of the closet, and have, and everybody ends up geting a laywer.

California uses the weaker Grant Deed, instead of the Warentee Deed used elsewhere, so if there exists a problem with a claim of Title, the buyer could be on the hook as well as the seller.
More here: Property Deeds - Warranty, Grant, Quitclaim

The Uncle could say "everything's gravy look here's the judgement!", but a higher court or another unknown factor or document could surface later on.
Cali has strong renters rights, especially for the poor and disabled and...

As a financial prospector removed from the situation, you might not want to get too deeply involved in family affairs.


Second, any property transfer ideally should be an "Arms-Length" transaction.
It's been listed on the MLS, the buyer and seller are strangers, and everyone gets a chance to bid.
The selling price is what the fair market will bear.

That means no selling to your cousin (or your contractor) for $50K, who then claims "fair market value" for the purpose of reducing property assessment and transfer taxes to that valuation.
Selling below market value won't work.
Period.
Every new sale will have a bank appraisal and/or by the city, and them boyz loooove to catch those tax cheats. Yessuh.

[look 171]

Originally Posted by john70t

(Not an attny. There are a lot better RE minds here, and the concensus is pretty strong against...)

First, any property transfer ideally should be a clean break.
Doing a title search first to ensure no easements, encumberances, land-use rights, etc. exist so you can call the property your own at conclusion of the sale. All kinds of skeletons can pop out out of the closet, and have, and everybody ends up geting a laywer.

Title search for sure.

The Uncle could say "everything's gravy look here's the judgement!", but a higher court or another unknown factor or document could surface later on.
Cali has strong renters rights, especially for the poor and disabled and...

This could happen with every real estate transaction, right? I worry about this the most.

As a financial prospector removed from the situation, you might not want to get too deeply involved in family affairs.

No, I never got involve with that. I know better.


Second, any property transfer ideally should be an "Arms-Length" transaction.
It's been listed on the MLS, the buyer and seller are strangers, and everyone gets a chance to bid.
The selling price is what the fair market will bear.

That means no selling to your cousin (or your contractor) for $50K, who then claims "fair market value" for the purpose of reducing property assessment and transfer taxes to that valuation.
Selling below market value won't work.
Period.

Why can a property owner dump their property due to financial issues for a quick sale (just a question, not the case here)?

I am not sure if I understand? being the contractor on the property 1 1/2 year ago, and have had previous business dealings with an owner, I just screw myself out of a legit purchase of the home at asking, or at a price he's dumping?

Let just say the market value is 700k and it list for 570 due to the amount of work needed to make it habitable. If you offer 570k and get it, then that's fine. But if I but it at that price, I can get into trouble later should something surface because I have had business dealing with them?


Every new sale will have a bank appraisal and/or by the city, and them boyz loooove to catch those tax cheats. Yessuh.

What happens to all those depress / destroy properties people buy at a fraction of market value and fixes them for profit, rent, or live in themselves. The IRS or who ever can get at them for back taxes?

BTY, thanks for the quick answers.

[john70t]

Not sure. I believe the former distressed owner/corp is stuck with the accumulating taxes until the bank resells, then the title is washed through foreclosure proceedings. I could be entirely wrong.

An advertised FSBO might be considered 'arms-length', but it could get very dicey when brought to court.
Also, an independant appraisal or two should be done to prove that 570 valid.

This is all speculative and just thoughts.
There is a lot missing here, and it sounds like this John guy may have still have some legal and moral claim in the situation. That is all.
Caveate/CYA/etc.

[look 171]

Originally Posted by john70t

This is all speculative and just thoughts.
There is a lot missing here, and it sounds like this John guy may have still have some legal and moral claim in the situation. That is all.
Caveate/CYA/etc.

This worries me most. I hope a good lawyer should be able to tell me that.

[dad911]

Originally Posted by look 171

What happens to all those depress / destroy properties people buy at a fraction of market value and fixes them for profit, rent, or live in themselves. The IRS or who ever can get at them for back taxes?

BTY, thanks for the quick answers.

It's sort of double (income) taxed. Bank might issue a 1099 to the prior owner for a forgiven/renegotiated dept, and new owner has a low basis, so will pay more if sold for a profit.

Property taxes almost always get paid eventually.

[dad911]

I'd be surprised if the prior legal action was silent about eviction, or if the uncle was unable to do so.

Also be interesting to see if a title insurance company would issue a policy knowing the situation.

[fintstone]

Originally Posted by look 171

...Why can a property owner dump their property due to financial issues for a quick sale (just a question, not the case here)?

I am not sure if I understand? being the contractor on the property 1 1/2 year ago, and have had previous business dealings with an owner, I just screw myself out of a legit purchase of the home at asking, or at a price he's dumping?....

The problem here is that the judge allowing the uncle to sell did not make the uncle the owner. Both still own the property. That is why you must have an "at arm's length" sale unless both sellers are in agreement. The seller still has to get the most possible fro the property and divide the amount after expenses. If the nephew realizes that you have previous arrangement/interest, he can easily sue either or both of you for fraud and tie this up forever. All he would need is an independent appraisal that shows the property is worth more than you paid (which is what you have already told us)

"At arms length" is important for tax purposes and also for inheritances.

I own a house that I bought from my mother. I paid $175K which, I believe was market value due to some known (by both of us) repairs. The appraisal came it at $200K and the appraiser put on the appraisal "this is not an at arms length sale." It did not matter to me as all my brothers had already turned down the purchase and were happy for me to buy the home. Otherwise, it could have been a problem. Especially since my mother told everyone what a good deal I was getting (to be a big shot) and that it was "my inheritance."

I have since bought another home and offered to sell it back to her for what I paid (after some repairs) and she declined...but changed her tune.

[look 171]

Originally Posted by dad911

I'd be surprised if the prior legal action was silent about eviction, or if the uncle was unable to do so.

Also be interesting to see if a title insurance company would issue a policy knowing the situation.

The situation, you mean half ownership?

[look 171]

The property is not on the market. They are working on all the details and getting it listed with an agent. The estimation for the remaining work is needed for the vale of the home. They are looking at another month or so to get it on the market. Just so you guys know, I do not or have not made offers on it yet.

[RennSport911rsa]

Originally Posted by look 171

Uncle's and JOhn's name are both on the deed. the judge had given the Uncle the right to sell the home to recoup his money even if John refuses. Uncle was able to proof to the court that John has no job, no income for the past 10 years, and he is unable to pay the monthly mortgage and utilities. The bank will foreclose on the house and auction it off at what's owe to the bank. Much, much lower then what it will sell for. Uncle will not recoup his money if foreclose upon. Ever. I am not sure how will the court deal with the actual cost of the property. More then a few major issues must be repair for the home to be inhabitable. Especially the back house where John stays. Real estate agent suggest it must be sold at below market value due to its current condition.

What does it matter how I come to find out about the sale according to your quote? I pay the same asking price as the next guy.

if this is all so wrapped up in a nice package with a bow, why hasn't the uncle legally removed the nephews name from the deed?

listing the house, MLS, all that jazz is inconsequential till it comes time to transfer title

BTW, you paying cash for this? Because no bank on the planet I know of is going to write a mortgage unless either 1. both sellers sign off or 2. nephew is removed from the title.

how good of a deal could this possibly be if it's so convoluted? is it worth all the extra time and cost you're likely to put in?

[john70t]

Buying the cheapest house in the nicest neighborhood is always a very safe strategy in any market.
Your general thinking is good.
Even minor decorative improvements($500 in a front garden) increases the resale value, and unless the whole neighborhood tanks hard you'll still be able to recover purchase+materials.

FWIW, 'Arms Length' can be a protection for the buyer as well:
Some area property tax valuations are based on actual fair market and not the sale price.
It's always good to have a copy of the city/state regs.
For example, you buy a $200K dump in a wealthy $1M area, and want your taxes based upon that, but the city assessor says "Everything else is a mil so that's what you'll be assessed on".
Huh? you say.
Since the purchase was truely 'arms length' and on the MLS a period of time, it bolsters any legal claim before a tax review board that $200K is the actual 'fair market value'. Not five times that.
Knowing comps, recent sales, and having a presentable and defendable position goes a long way.

A city assessor actually said to my mother "you paid too little for your house" and tried to double her new taxes.

[look 171]

Originally Posted by RennSport911rsa

if this is all so wrapped up in a nice package with a bow, why hasn't the uncle legally removed the nephews name from the deed?

listing the house, MLS, all that jazz is inconsequential till it comes time to transfer title

BTW, you paying cash for this? Because no bank on the planet I know of is going to write a mortgage unless either 1. both sellers sign off or 2. nephew is removed from the title.

how good of a deal could this possibly be if it's so convoluted? is it worth all the extra time and cost you're likely to put in?

No bank involve in this transaction.

I am wondering if nephew has been remove from the title. Can the court do that?

Convoluted? The issues here is between the uncle and nephew. My only mistake was to have previous business dealings with the uncle and done work on this house. there is nothing shady about it. Its what my company do to make a living. I am just having a hard time see it as fraud.

I have not spend anytime on this other then lunch with the uncle.

[RennSport911rsa]

I would "imagine" that by a certain court order, yes, the title can be amended to remove the nephew. I'd be checking town hall asap if I were you, as well as confirming that what they have on file is what the title company has on file..and what the bank has on file.

Yes, convoluted. To the point that regardless of the upside, I'd walk away. But that's me. There are still tons and tons of excellent deals with far more straightforward terms than this, at least on the outset.

You spent the lunch, you spent this thread, you spend time outside of this thread, you're going to spend it on the above title searches, court records, time with a lawyer(s), legal fees. All depends what your time is worth to you, and whether you have it to spare. Not a knock on you BTW, everyone does this stuff differently.

[Zeke]

@rennsport, you don't seem to know the market here. It's very hard to buy a fixer anymore. And I know look's MO. He likes to work within a few miles of his shop. That's understandable given L.A.'s traffic. So, he doesn't pursue deals in the valleys or down at the beach.

[look 171]

Originally Posted by Zeke

@rennsport, you don't seem to know the market here. It's very hard to buy a fixer anymore. And I know look's MO. He likes to work within a few miles of his shop. That's understandable given L.A.'s traffic. So, he doesn't pursue deals in the valleys or down at the beach.

Milt,

Not the valley, I hate the valley(my shop's in N. Hollyweird), but the beachs, yes. At a matter of fact, I was looking at Long Beach a few months ago. Those run down 2/1 bungalows outside of Downtown near the Blue Line. Market it to the singles that work Downtown LA. But it was gone by the end of the day before we even had a chance to write an offer.

[look 171]

Originally Posted by RennSport911rsa

I would "imagine" that by a certain court order, yes, the title can be amended to remove the nephew. I'd be checking town hall asap if I were you, as well as confirming that what they have on file is what the title company has on file..and what the bank has on file.

Yes, convoluted. To the point that regardless of the upside, I'd walk away. But that's me. There are still tons and tons of excellent deals with far more straightforward terms than this, at least on the outset.

You spent the lunch, you spent this thread, you spend time outside of this thread, you're going to spend it on the above title searches, court records, time with a lawyer(s), legal fees. All depends what your time is worth to you, and whether you have it to spare. Not a knock on you BTW, everyone does this stuff differently.

At the end of the day, its just good old fashion hard work. Thanks for your advice and I need all the advice I can get from everyone so I don't walk into a land mine.

[RennSport911rsa]

Originally Posted by Zeke

@rennsport, you don't seem to know the market here. It's very hard to buy a fixer anymore. And I know look's MO. He likes to work within a few miles of his shop. That's understandable given L.A.'s traffic. So, he doesn't pursue deals in the valleys or down at the beach.

completely right, I was talking in more of a very generalized thing...but what you're saying makes sense. Opposite side of the country from me, so I've never looked beyond casually at investment properties in CA.

If its what you guys do for a living, then absolutely, makes a ton of sense. I can't speak to the arms length side of things, as there are still some details missing to make that determination. But the questions I posted would be a really good place to start on your own tomorrow morning. This way you can find out what Town Hall shows, and how that jives with what the uncle has told you. Then see what court records are available to you and have your attorney go through them thoroughly. Is the uncle represented by counsel yet?

As an aside, and if you answered this already I apologize. If you've done business with the uncle, he knows you, you know him. You're not getting a mortgate, so you're paying cash. Why is it going through a listing agent in the first place? Was that something the court decided?

[look 171]

going through an agent would make things fair to all buyers, so it look a lot less like "fraud" or us. Exactly what many mentioned here in early posts. No back door deals, everything needs to be legit. There's a lot of money we are playing with here.

[RennSport911rsa]

That's kinda my point and why you need to see everything the court has published with respect to this property

If the court has given him the right to sell...and you're a cash buyer, why on earth would he want to lose any $ to an agent, particularly on a distressed property that you're presumably buying well under market rate in the first place? That might be a logical step for him, as a seller, if the cash sale with you fell through.