A week at the desk in Memphis Tennessee

Posted on Thursday, June 20 2013

I thought for a change I would tell you some of the things that happen in a typical day in America and just how different it is to home! Even the jargon will throw you.

Deed restriction. I was purchasing a short sale and there was a plethora of paperwork over several months with special addenda etc.
(A short sale is when the bank lets the owner sell at a loss and the bank wears the loss with no repercussions to the owner.)

Now I freely confess I am not super detailed as a person so I would obediently sign everything I was sent and send it back.
I was purchasing this property for a hedge fund and it was only 24 hours from closing that we finally got all paperwork back from the bank.

My attorney then noticed 2 different restrictions in the contract that contradicted each other.

One said the property couldn’t be sold within 90 days. The other said it could only be sold in 90 days if “significant rehab” had been done.

The conclusion was that the latter clause prevailed but it still meant I had to find a lot of money to hold a property I had no intention of holding at all, (I normally double close to hedge funds).

So lesson 1 never skip over addendums to contracts, check specifically for deed restrictions!

HUD owned. I was purchasing a property from a wholesaler and he advised he couldn’t assign to me as it was a foreclosure. I have had so many hassles with other middlemen in Memphis that I said I would proceed only if I could see his buy contract. I didn’t mind him double closing to me providing I had sighted his buy side contract.

So he sent it to me. Clause 1 of the contract had been signed by the buyer stating that he was the home owner and would be living in the home for a minimum of 12 months. This was dated a week ago and he was closing it to a wholesaler who was closing it to me and I would have unwittingly onsold it.

This is of course a criminal activity in the eyes of the government so I warned my seller and advised him to run from the deal himself.

But the point is I could have been involved in a federal offence through complete ignorance. (Yes I know the buyers attorney also has to be dishonest but that is beside the point of this blog).

Penalties are up to $100,000 fine and FIVE YEARS IN JAIL!

So lesson 2 always ensure the original buy contracts have been vetted by your attorney especially when multiple parties are involved.

Unless of course you like wearing striped PJ’s and going to the toilet in public :-)

Well in fact the real lesson for you all (y’all) is this:

Be very, very careful of buying US property through private sellers and one man bands. Use turnkey providers like us who can make sure you don’t get scammed.
I am up to about a client a week now that tried to buy “on the cheap” and now are using our expertise to get them out of trouble, out of terrible problems and out of inadvertent illegal transactions.

And right now we have some phenomenal opportunities over at http://turnkeypropertyinvestment.com/properties/united-states/tennessee/memphis/

 

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Expert's Bio

Dean Letfus

Dean spends his time between the USA, Fiji and New Zealand helping hedge funds and individual investors buy cash flowing real estate in the Memphis market. He works with top professionals in those cities and is considered better at finding deals than most of the locals. Turnkey has clients in 9 countries and specialises in providing end to end solutions regardless of your budget.

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