Commercial BRRRR tax sale strategy

[Robin Casper]

I've recently had a breakthrough and thought I would share. I've bought properties at tax sale in the past and the hurdle has always been obtaining title insurance. I have tracked down the former owners on previous deals getting them to sign a Quit Claim but with my recent purchase the previous owners refused even after being offered $1000. So I consulted with my attorney and lender and they told me that I qualify for commercial lending even on SFR & 2-4 multi family because of the amount of properties I have with them. My lender said with commercial loans they do not require title ins. Also there is no seasoning period between when I close and when I refinance. On top of that their commercial LTV is 80%. My biggest risk when buying tax auction properties with cash has always been what if I can't get title ins. And get my cash back out and it seems I've found a solution.

For anyone wondering about the deal...I purchased a duplex for 80k cash at the auction, after buyers premium and closing costs I'll be in it for 92k. It needs ZERO work! Unbelievably well kept for a property that has been vacant for years. The appraisal came in at 120k. 80% LTV gets me a loan for 96k. I refinance a week after I close with the city. Each side will rent out next month for $925 + utilities. Estimated cash flow $600.