Every Real Estate Deal has Flaws (LA 1349) - a podcast by Steven Butala & Jill DeWit

Every Real Estate Deal has Flaws (LA 1349)

Transcript:



Steven Butala:

Steve and Jill here.



Jill DeWit:

Hello.



Steven Butala:

Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.



Jill DeWit:

And I'm Jill DeWitt, broadcasting from the sunny, Southern California.



Steven Butala:

Today, Jill and I talk about how every real estate deal has flaws, but hopefully not fatal flaws. And we'll talk about how we sometimes search for the flaws.



Jill DeWit:

Right. And people accidentally kill deals.



Steven Butala:

Yeah.



Jill DeWit:

You know what's funny about this? I started to take some notes. I'm like, I usually sit and put some bullet points down about every show and have topics I want to cover, but I'm like, you know what? This is going to be more fun. It's just a total open, free flowing conversation, so I'm excited.



Steven Butala:

I promise this will be interesting because this is one of those things where, after 25 years of looking at deals, daily. Deals pop in daily. It's like, all right, what's wrong with it? All right, it's cheap. I get it. We understand the mail works. We know how many deals are going to come in that day or that week even, within reason. What's wrong with it today? Oh wait, that's not wrong with it. Oh wait, that's not wrong with it. Oh my God. We're going to do this deal. Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free.



Jill DeWit:

Ian wrote, how do you look for the liens on a land parcel before you enter into title? Are there any due diligence standards which people check before entering into escrow? I don't want to pay for the escrow if there's something that's really easy to look up, which would make me walk. I've already looked at the county website for back taxes. This is a very good question.



Steven Butala:

This is a fantastic question. It was super popular on land investors. There's a lot of people that piped in, obviously Kevin, the moderator. I even, I think, answered this. Liens, there's no easy button for liens. And Jill knows how to do this with TitlePro, and we'll ask her in a second. But here's the back picture. Every real estate, every piece of real estate, theoretically, could have liens attached to it. They come in the form of... There are liens that are attached to that piece of real estate itself, separate from the owner, and there's liens attached to the owner that could affect that asset that they own, that piece of real estate. I don't want to make this too complicated. And one of each, is an example, is property taxes. If you let your property taxes go, they're attached to that piece of real estate, they're not attached to you.

And you can sell that piece of... I could sell a piece of dirt to Jill, that's got a ton of back taxes on it and she inherits them all. They stay with the property. So that's a big one for me. How do you find back tax liens if they're that old? Another one is, IRS liens. Well, IRS liens, if you don't pay your income taxes, if it gets that bad, you have a lien attached to you and then they name that real estate as an asset, as something you own, that they could potentially go after. So there's all kinds of crazy liens. There's mechanical liens that are tied to contractors, if a contractor did some work and didn't get paid. There's child support liens, if you have child support and you don't pay.

So there's all these liens and it can be a gobbly, gooped mess. There's no easy button. The answer is, there's a few sources you can go to, to find these things, but nothing's for sure, and that's where people get hung up, even me. There's no for sure way to look up, go to a website,

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