How to Avoid Deal Theft (LA 716)
Transcript:
Steven Butala: Steve and Jill, here. Welcome to the Land Academy show, entertaining land investor talk. I'm Steven Jack Butala.
Jill DeWit: And I'm Jill DeWitt broadcasting from sunny, southern California.
Steven Butala: Today Jill and I talk about how to avoid deal theft. Well what is it, first?
Jill DeWit: Like car theft?
Steven Butala: Yeah, it's only worse, and more expensive.
Jill DeWit: Can I go somewhere and report a deal theft?
Steven Butala: And you can't get insurance.
Jill DeWit: Can I? Shoot. I-
Steven Butala: Yeah, you can report it to me.
Jill DeWit: I would like to file a report, please. Someone stole my deal.
Steven Butala: It's funny that you say that. That's exactly why we're doing this show.
Jill DeWit: I wish there was a thing.
Steven Butala: One of our members emailed me and said, "I'm wondering if you guys can do a show about deal theft, because I just lost 30 grand.
Jill DeWit: That sucks.
Steven Butala: With no insurance, like but you lose, somebody steals your car, at least you have a chance of getting some money back.
Jill DeWit: A chance.
Steven Butala: Before we get into it, let's take a question posted by one of our members on the LandAcademy.com online community. It's free.
Jill DeWit: Okay. Mark asked, "I was wondering if it's a normal practice among the group to search not only for liens under the county APN, but also under the owner name, as some liens get recorded against the name only, not only, and not against a particlular property. Thank you.
Steven Butala: All right. This is a fantastic question, and it's, if you're new in the business, I want you to close your ears, because this kind of stuff doesn't matter. It's so infrequent that, and it's only if you're doing your own deals, and if you're not using a title agent and all that stuff. But if you're a pretty seasoned investor, you've done at least ten transactions or more, or you're like us where this is your business, you should know that there's a couple types of liens on real estate. Two big picture types, like Roman numeral types like Roman numeral one, and Roman numeral two.
Number one is, liens that stay with the property. The most common type is set property taxes, so if somebody stops paying their property taxes on a piece of real estate, eventually the county is going to foreclose on the property, but there's no repercussions to you as the owner. They're not going to look up your credit score, your credit report. It's not going to damage your credit. What they're going to do, they're only interested in the property. They're going to take the property back, and resell it to somebody, however they do that, just to get it back on the tax rolls. That's the first type of lien that stays with the property.
The second type of lien is a lien against the owner. A personal guarantee it's called, or there's a lot of different names for it based on geography around the country. A good example of that is an IRS lien, so if the tax people come after you, they want all your assets. All the real estate that you own, anything that has any value. Or, a popular one these days is a healthcare lien, where you just didn't pay your hospital bill, and we all have and no people in these situations. So does it ever get enforced? Is it real? In my opinion, in my 15, almost 16 thousand transaction opinion,