One of the best sources of problem property leads that is often overlooked by most investors is local, county, and state government agencies. For example, one of the types of properties that I buy options on is vacant commercial properties that have been repeatedly cited for non-structural code violations. I have chosen this particular type of property because these properties are in steady supply and are relatively easy to find in Hillsborough County, Florida. The code enforcement departments for both the city of Tampa and Hillsborough County maintain files on all of the properties that have been cited for code violations.
Plus, these properties have bright fluorescent orange condemnation notices conspicuously posted on them. The following local, county, and state government agencies are all sources of problem property leads:
1. Local police and sheriffs’ departments have reports available on arrests that involved real property used in crimes that has been damaged. Many times, these are residential rental properties that have been used to manufacture illegal drugs and are owned by landlords who do not have the money or desire to make them fit for human habitation.
2. Local and county fire departments have reports available on properties that have been cited for fire code violations and properties that have been totally destroyed by fire and water damage. In some cases, these burnt-out properties are uninsured, and the owners do not have the money to rebuild. Or, the owners are insured, but they lack the desire to rebuild.
3. Local and county code enforcement departments maintain records on properties that have been cited for building and safety code violations or ordered condemned for demolition. In many instances, these properties belong to owners who do not have the time, money, or desire to make the AC repair st cloud Florida needed to bring their property into compliance with the code.
4. Local and county public health departments keep records on commercial and residential properties that have been cited for health code violations.
In some instances, the health violations are severe enough for the health department to declare the property unfit for human habitation and order it vacated.
How to Buy Options on Properties with Clouded Titles:
The term cloud, as it relates to real property, is a claim or encumbrance recorded against a property’s title that prevents the owner from having a clear and marketable title to the property. And the problem with a clouded title is that title insurance companies will almost never issue a title insurance policy that insures against a cloud on a property’s title. Instead, they will issue a title policy that lists the cloud as an exception to the policy, which means that the so-called exception clouding the title is not covered by the policy. The most common problems that cloud a property’s title are:
1. Mortgage and deed of trust loans that have been discharged or paid off, but the lender never recorded a satisfaction of lien in the public records.
2. Missing heirs that must be located to sign the deed and transfer the title to the property.
3. Judgment liens recorded against the property’s title and the lien holders cannot be located
4. Multiple parties claiming ownership of a property by recording quit claim deeds.
5. Unsettled property boundary disputes involving flawed surveys.
When you buy an option on a property with title problems, there are two very important things that you must do. First, you must buy an 8- to 12-month option so that you have ample time to complete a quiet title action in court. Second, you must obtain the property owner ‘s written authorization to allow you to file a lawsuit to quiet title on the owner ‘s behalf. I always have the owner give me a limited power of attorney that allows me to take whatever actions are necessary to quiet the title.