A Lesson On Title
I was down at the beach house when a call came in. The voice on the other line sounded like a person who had given up and was out of options. He told me about his house and how code enforcement had secured the house due to its dilapidated condition. This guy was a landlord who lost control, failed to put any money into the property, and the tenants and weather just destroyed the place.
I made him an offer over the phone which he accepted. I told him I would be out there the next day to have him a sign a contract. After we hung up I couldn't get the feeling that I should pack up and head out to my desert house, then go see the seller.
The next morning I called and reconfirmed I would be out there in the afternoon to sign the contract. He said that would be fine, so we packed up and headed to the desert, about an hour away. once we got settled in the desert house I called again to let him know I'd be there in an hour or so. Again, he said that would be fine and I got my paperwork together and headed to his house.
Upon arrival, I realized he had no electricity, and was in dire need of some cash today. We started going over the contract, but then he wouldn't sign it. Odd. I pressed him and he finally admits that he signed another contract that morning. What?!
He explained that another investor had driven to his house, picked him up, brought him to his vacant rental, they toured the house, he signed a contract with that guy, and that guy gave him some money. Yeah, you could say I was kind of pissed. I had called him that morning and confirmed I'd be out there. I called again once I got to Riverside and reconfirmed I'd be there. He had multiple opportunities to tell me he signed with another investor, which would have been perfectly fine. There is an old saying in this business, "If there is equity, GO!" which I didn't follow. But this guy wasted my time, gas, and energy. He really left me no choice.
So, this is where I exerted my force; California is a community property state and he had taken title as "A married man." What he should have done was taken title as "A married man as his sole and separate property." The part where it gets good is that he was now divorced. California is a community property state. Once he took title as a married man and failed to record a Quit Claim from his wife, she automatically received an unrecorded 50% community property interest.
I immediately set about tracking down said ex-wife in an effort to buy her 50% interest. It didn't take along. I found her on Facebook. I sent her a message. Then another. And another. She wasn't easy to get a hold of even though she was actively posting. She did finally respond, but it was a long, slow process to get her onboard. The next issue was her location. This woman is active duty in the military and located on a base in the middle of nowhere. I had to find a mobile notary in the nearest major city and and pay her double her normal fee with no guarantee she would even be able to get the quit claim deed signed. Luckily, everything worked out well and within a few days, it was signed and Fedex'ed over to my office. I recorded it, then called up my title guy to see if he could track down which title company had an open order on the property. I knew I had plenty of time since code enforcement was involved. Escrow would contact them and it would be days before they got back to escrow with their demands. He was successful in locating the title company and I sent them over a copy of the recorded deed. Then I waited.
The next contact I received was a letter from the seller. He was trying to intimidate me and threatening to contact the district attorney to file charges against me for real estate fraud. I laughed it off and threw the letter away. The next person to contact me was the other investor. He wanted the house. He explained that the seller was extremely upset with what I had done (Good!) and he was interested in negotiating with me to clear title. I accepted his $15,000 offer. I am sure I could have gotten plenty more. I probably could have just rehabbed the house, taken it over, and eventually forced the other guy out through adverse possession since he had no money or allies. But, I had my fun. I got a nice check out of it and that was what I was really after in the first place.
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