Jonathan Asbell
Active 2 weeks, 3 days agoForum Replies Created
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I’m not an attorney, but it would seem to me that The option can cloud title but cannot foreclose, especially since the option is for executing a sale at the time desired. how could an optionor refuse if all the paperwork has already been done? is a signature needed from the optionor? My assumption would have been that all those things would have been done and it’s just merely executing, but maybe I’m missing information
Thanks Bill. You say “This allows me to foreclose on the property (and take any senior liens over S2) if Optionor refuses to honor Option”. Is there language in your contract that states that the seller/property owner who gave you the option gives you a limited POA and authorizations that allow you to take over their debt subto? What if they call their mortgagees/lenders?
Thanks Bill. I have discussed the Jack Shea approach with attorneys in Florida and they are of the opinion that his approach is circumventing the judicial foreclosure if the buyer I sell to is a consumer protected under Dodd Frank/Safe Act. This is the issue. If jack has spoken to an attorney about that I would be grateful to speak with him, his attorney, or both. Its a worthwhile angle to understand
thanks. so dissecting is a little further, You said:
1) we lent him $128,000, 15% & 5 points with points rolled into the note. does that mean you piggybacked $6400 to the end of the $128,000 loan? or are you saying that you made the loan a 20% rate? or did you mean something else? I’m not understanding exactly how this was done.
2) we paid $1,000 to buy an Option on the park that can be exercised anytime in the next 50 years. just to be clear that option was purchased from the individual who you lent the money to correct? if so, and if that person stopped paying, what would you do?
thanks Bill. just for clarity, it’s a power of attorney and not an authorization? I asked because when I’ve spoken to real estate attorneys who I have confidence in, they tell me they do not like the idea of an entity that can benefit being the POA for a party that has potentially opposing interests.
in fact I had asked the same question in a group I belong to “real estate legal” at https://m.facebook.com/groups/777873356258354/permalink/1195279677851051/?mibextid=Nif5oz
this was response from attorney Nathan Case:
“Attorney checking in. I’ve used this exact tactic to go after wholesalers and buyers that operate under a POA. The agent under the POA owes the principal a fiduciary. As a fiduciary, one must act in the interests of the principal and not place their interests or the interests of others before those of the principal.So by its very nature, I believe a buyer/wholesaler acting under a POA on the seller’s behalf is going to have a lot of strings attached to it, and if the agent is not working towards the principal’s best interests, we have a breach of fiduciary.”
who is your power of attorney in those cases and how do you deal with the issue of conflict and interest?
That makes sense. Another thing that can be done as part of the option agreement is to be able to “novate” the contract. which would allow you to market the property and sell it to someone else, or complete repairs, or both. There seems to be an infinite list of possibilities to incorporate using options.
Yes one thing Jack discussed was about Net Listings. It’s not illegal as an action in the state of Florida (your state may be different), but it does violate NAR so you cant list a house as a net listing on any MLS. That should not matter because the owner is the investor, the investor is acting as a principal not an agent, and therefore there should be no notion of an agent getting “an amount over the salesprice”.
Also, Jeff Watson supports avoiding phantom tax with the use of an option for acquisition, which then changes after a year to seller financing. https://www.youtube.com/watch?v=q-JT8dK4IKk&t=1284s
