# Entrepreneur of the Week Yaron Feldberg # Post 5
Sheriff-sale is a process of selling properties by a government body (something like an execution) at an auction to the general public. The goal is to repay someone else's debt. Taxes, mortgages, claims, etc. 50 shades of how to take someone's home (do not think I invented it myself, I have attached the list below). In the hat of a management company my goal is to prevent it. In an investor’s hat, I would like to understand the process in depth and where the dangers in purchasing a property from the sheriff are. Israelis like to rush forward and say it will be okay. Leave you… will be fine… Dude! Leave you… will be in order…
This world I know mostly people's mistakes, and I also sinned in it right at the beginning. I personally do not deal today with Sheriff purchases. But I do not rule out a purchase from the sheriff if you understand what world you are entering. Here are 3 main things that people fall for when buying a sheriff. I'm sure there are more things that group members would love to add or share such experiences. It is best to learn from people's experience.
There are several types of sheriff selling, one of which investors like is FREE AND CLEAR. Because it means that the property is free of tax debts. What people do not understand is what type of DEED they are getting. The DEED sheriff does not promise much, almost nothing can be said. Investors get an imaginary sense of security. If purchasing such a property, it is advisable to do a check for the TITLE chain. To explain most simply what the difference is between DEED and TITLE. DEED is the product and TITLE is the receipt. The receipt says to whom the product belongs and the conditions of use of the product. The problem can arise when the rest more than one person has a receipt that says his product. Enough that there is a suspicion of such a reception that hides it, can make a lot of problems and start to cost money. Teitel companies specialize in testing the chain of these receipts down to the first person who built the house. When there is a sequence of receipts from the first to the last person, the chain is free of problems and the title company will provide insurance for this (do me a favor, buy title insurance).
An investor property, which was won with the help of a company that would purchase dozens of properties a month from the sheriff, would buy very, very cheaply, renovate and sell the property to a ready-made investor for the tenant. The property passed to me after 5 years he saw no dollars from property, only expenses and expenses. We did a sale check and found out the house was taken because the owner died and no taxes were paid. The investor did not really understand what we wanted from him. After all, he bought the conference FREE AND CLEAR and not only that he got the DEED on the house. He had to hire an attorney to carry out a process that clears the property of future heirs who may come and claim the property. Expenditure of $ 3000- $ 4000 and 4 months follow-up for sale.
At an auction buy a property that you can not test it. In a regular sale, we have the option to color the conference's tests with professionals who can assess its condition, infrastructure condition, roof, systems, etc. This way you can meet the costs to put it in a proper condition that you can rent or flip.
A client won a property that after paying the 10% on the property sent me photos of the property I was going to manage. In the photos I discovered that there was a red sticker on the door indicating that the house had caught fire. Something he did not notice. I advised him to lose the 10% than to move forward with the purchase. This saved him 90% of the purchase and Flip at a loss.
Another property I happened to be involved in, at first glance would have looked like a perfect property in excellent condition. After buying, we entered the property and found that the infrastructure of the property was completely destroyed. We sold it quickly to reduce the risk and lost only $ 2000. Another investor who won the property discovered that he had a SEPTIC TANK (a huge watermelon underground that they reach the sewer and once in a while comes a truck if a vacuum cleaner that cleans the tub) he discovered this after starting a massive renovation in the house to flip it. The pleasure cost them $ 40 to connect to a public sewer system. An unpleasant surprise that cut off the profit. Purchasing from the sheriff should take into account all possible risks and calculate them at $. Only then offer an amount that does not exceed the possible level of risk.
A person who has lost his property, can up to a year pay off the debt and get the house back. Even if you got the deed and the title. Even if you paid (do not worry the sheriff will refund you the money you paid for the property). Even though you have now invested $ 150 in renovations. Thank you so much, you made the original owner this year. You renovated their house for free. A client who won the property, a renovation for $ 150 .. I just do not have such a story about my client, fortunately. But I heard about people who had it happen to them. Consider that it is advisable to wait a year until you do something serious if the property. Or there is always a property owner waiting for such suckers.
In short, you will learn the umbrella in depth. There are things you do not know that you do not know. Consult professionals. Teitel companies, attorneys, companies that specialize in this. Do not think where it says FREE you get something for free. I learned that there is nothing in the world that is free. Neither is air.
As I promised 50 as shades of how to take someone's property.
1. 1Forged deeds, mortgages, mortgage discharges / satisfactions
Deeds executed by a mentally incompetent or insane person
Deed from a minor subject to avoidance
4. Unauthorized deed from partnership or trustee
5. Deed by foreign person vulnerable to challenge
6. Deed from a corporation unauthorized by by-laws or resolution
7. Undisclosed divorce of person who conveys as sole heir of a deceased former spouse
8. Deed signed by mistake or under financial duress
9. Deed signed under defective power of attorney
10. Foreclosure deed where underlying foreclosure was defective
11. Ineffective release / discharge of prior mortgage
12. Deed of deceased not joining all heirs
13. Missing heirs claiming interest in property
14. Transfer void under contract law
15. Deed includes protected public trust wetlands
16. Ineffective release of mortgage subject to bankruptcy avoidance powers
17. Ineffective mortgage subordination
18. Mistakenly indexed deed / release
19. Undisclosed federal / state tax lien
20. Undisclosed spousal / child support lien
21. Undisclosed lawsuit affecting property
22. Undisclosed restrictions / covenants
23. Incorrect legal description
24. Errors in tax records
25. Erroneous tax release
26. Misinterpretation of wills
27. Deed without right of access to public way
28. Access eliminated by foreclosure
29. Defective notarization
30. Forged notarization
31. Improperly recorded or indexed deed / mortgage
32. Deed acquired through creditor fraud
33. Mechanic's lien claims
34. Incorrect property boundaries
35. Encroachments of buildings
36. Federal or state estate tax liens
37. Preexisting violation of subdivision laws
38. Preexisting violation of zoning laws
39. Deed from joint owner without joint tenant joining
40. Undisclosed right of first refusal
41. Undisclosed easement affecting property
42. Undisclosed party wall agreement
43. Special assessment liens
44. Adverse claim of vendor's lien
45. Discovery of un-probated will
46. Claims for prescriptive rights, not of record
47. Easement does not conform to recorded instrument
48. Incorrect survey
49. Deed following lawsuit where all parties of interest not joined
50. Deed executed under falsified power of attorney
Undisclosed federal / st