Buying a Stolen house

A few weeks ago I was strolling through Bigger Pockets.

I came across this “horror” story of loaning on a stolen house.

It goes like this:

A Local wholesaler gets a response from his bandit sign. The motivated seller is willing to sell his vacant hoarder house AND adjacent vacant lot in a nice area in Los Angeles. It’s a package deal and The sale price for both properties is something over $500k.

He pays cash, which is unusual for a wholesaler but completely legit, and he closes appropriately thru title and escrow and also obtains an owner’s title policy.

Some weeks later, the wholesaler decided to sell it to a local flipper. He contacts the flipper who’s local and very experienced.

He agrees to buy both properties for $610k. House will take about $75k to fix and end up with an $875k ARV. Not a barn-burner, but the lot next door will be sold quickly for $100k to make this a great deal. The flipper contacts his lender to make the deal happen.

The transaction is handled through the same independent escrow and title company that handled the wholesaler’s purchase. The flipper gets an owner’s title policy and the lender gets a lenders title insurance in the amount of $685k. They fund and close like any other normal boring loan.

Two days later, the flipper is standing in the property planning the rehab. A gentleman walks in and asks who he is. He says he’s the new owner.

The gentleman says he’s the owner and never sold the property. Uh, oh.

The escrow company calls the notary who witnessed the signing of the grant deed for the original sale to the wholesaler. At first, she doesn’t return the call but calls back a few days later claiming she lost her notary book or it was stolen. More uh, oh.

Everyone files a title claim and a police report, including us. Title opens an investigation.

Here’s what the Lender said (exact words) about the aftermath and the investigation:


“I understand the wholesaler, who we never met, sent all his profits to the title company. He’s even. As a result of the great long-term relationship we have with our borrower, we loaned him 100%, so he’s out almost nothing as well, but has been paying for fire and hazard insurance since he closed. We’re out over $600k but with either a legit 1st position lien or a credible title claim. I’m not worried. I called our lawyer asking if we need to hire him. With almost no info from me, he virtually repeats what happened and what will come. He advises us to sit tight and let the title ‘do their thing.’ No need to hire him unless someone files a lawsuit or title denies our claim. He tells me this could take two months or two years to resolve. Aren’t I thrilled? Title does a four-month investigation, interviewing everyone and their brother. The police were able to search bank records and determined the “real” owner never received any money and
was telling the truth — he never sold the property. The grant deed was indeed forged, though we don’t know by whom and I don’t know the involvement of the notary. It also appears the escrow company, which is an independent escrow (not associated with a title co.), did not require the seller to present himself with proper ID to sign a notarized grant deed. They accepted everything by mail – and obviously from a scammer. You’d think this would violate a title company rule???

This problem it seems, occurred because escrow either didn’t follow proper processes or because they didn’t have any. The bottom line is don’t even think about buying or lending on a property without proper title insurance. Make sure your policy will cover all your potential losses.”


Yup, real estate scams still happen… maybe more so because it’s weird 2020 ?!

Well, fortunately, there is a big distinction between the great title companies and bad ones.

And one of the better title companies out here in Southern California is Chicago Title.

And she presents at the Millionaire Makers Next Generation Seminar and gives us some “No no’s” of title, lawsuits because of bad title, and free tools you can use to better your game as an investor.

That’s just one presentation out of 10 inside the seminar.

The entire presentation is basically a PhD in real estate Wealth creation given by the top investors in southern CA.

It’s $100 off this month of October through Halloween.

Get it here before the deadline:

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“Keep moving forward in your REI venture”

Paul do Campo

I’ve spent many hours learning and implementing marketing methods in REI, chasing sellers, and building cash flow streams… and I show you what works and what doesn’t from real-world investors in the trenches today through my daily tips, articles, and audio interviews at realestateaudios. com

Call or text me at: 951-901-8208
6939 Schaefer ave Ste D #254
Chino California 91710

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