Dallas-Fort Worth Real Estate Investor Club

I am writing to let this group know that I had two recent deals fall through due to a Seller who possed as the owner of a property, but they were not the real owners.

We often times work with other wholesalers and on this occassion another wholesaler brought us 2 deals where he placed the property under contract (check), then assigned it to me and my LLC (check) and then I assigned it to my end buyer (check).  And as always, we submitted this transaction to a reputable title company (check).   On the day of closing, the Seller showed up to the Title Company to sign their side of the paperwork and was haulted by the closing agent due to inefficient identification.  The closer presented it to their legal person and they quickly stopped the closing process from completion.  

They realized that something was terribly wrong.   The Seller or I should say, the person who possed as the seller found a vacant, bank owned property and called it their own.  They actually seasoned the deed down at the county for over a year.  So up front it looked legitimate.  It even had a notary seal.   The seller's name was on the Appraisal District's website. But when examined more closely, the Title Company realized that the deed was a fraudulant document.  

Albeit, they should have realized this when they rec'd the records back from their curative dept. but they didn't.  Everyone ended up getting their earnest money back as well as the end buyers funds all returned.

But the moral of this story, is to be very careful when dealing with these types of properties.   And to always, always use a title company to close your transactions.

After researching this some more, I found out that this company has been selling several houses like this before and have succeeded.  This was specific to Dallas County, but make no mistake, if these people are doing it and haven't been caught yet, there will be others.  They probably have other names they use.  It may take the authorities awhile to catch up to these people, but the sooner the better.

It saddens me to know that we as investors are being taken advantage of in situations like this.  I was lucky that I didn't lose my buyer over this.  And that they didn't lose their money.    They knew it wasn't my fault.  But at the same time, I have a reputation to uphold as a responsible, ethical investor/wholesaler.

I hope this story is helpful and it will ensure that we all watch out for crooks in our midst.  I know it sure surprised me.

P.S.  This has been reported to the proper authorities by the legal department at the title company.  

Robin,

I'm glad you think it was helpful  One of your members saw my post on my Facebook page and recommended that I post it here.  That was a good idea.  I want my story to be read so others will be more aware.   The title company's legal department haulted the practice of "assignments" as well as "A-B, B-C" transactions because of this.  They didn't blame us, but at the same time, they think differently of investors.  That's what upsets me.  This was an investor style transaction and the activities of some bad people reflect on all of us.  

Thanks for sharing Stacey! Myself I had minor involvement with the Bishop Arts Winnetka Heights Dallas property that has been on the news over the past six months. The owner was murdered, the killer buried him in the back yard and stole his identity. He subsequently identified himself as the owner and tried to sell the property, acting as the owner, utilizing his victims identity. The wholesaler I was helping attain value and market the property did place the property under contract and then assigned it to an end buyer. 

Without getting into the gruesome details of what transpired down the road... It appears that the title company is at fault as the impostor was not nearly the same in size, age or appearance. The personnel at the title company did not catch the obvious identity discrepancy withing the stolen license of the deceased owner. To make a long story short the Title company had to eventually reimburse the buyer. 

I do know the end buyer as well....Very stressful situation for him for many reasons but from a monetary perspective his cash ended up being tied up throughout the entire process. He didn't know if the case would go on for months or years. I can assure you this was a stressful situation for all parties involved! The wholesaler that contracted the property was in the house with the guy several times and he repeatedly told me that there was just something not right about the seller (we know now). The seller/killer has recently been caught. 

The moral of the story is to never under estimate the value of properly identifying the seller of a property. Do your best to pre-screen a prospect well prior to physically visiting a property. If you eventually visit the property make sure you are dealing with the actual owner. 

This is a great business with significant opportunity! I simply hope this message helps others to work in this business with a heightened level of awareness for who they are dealing with at all times. 

Regards,

Steve Labus