TAX DEED SALE - Owner pullback?

Question

Multiple questions here but here is the scenario I have

Vacant home that has been abandoned by the children of a woman who passed away several years ago.  Taxes haven't been paid since 2007 (ish).  I know the family and it is in the neighborhood where I grew up and which I am looking to invest in.  The family doesn't have the funds to pay the taxes back but I was thinking that I could work something out with them.

Home is free and clear, deeded to the woman's estate (as far as I can tell through my limited research).

Back taxes are 9 k

Land Value 24k

Assessed value 75k

Conservative ARV is 100k

Needed repairs UNKNOWN

The home needs some serious love cosmetically.  I've heard rumors about there being a serious mold problem in the house and that was the reason why the kids left.  Not sure about any other improvements needed.  I'll assume the worst but I think I can get access or permission to access.

Questions

1.  The tax auction is March 6th, can the family pay up and pull it back from auction if taxes and fees are paid up to date?

2.  The county is Fresno County, Ca does anyone know if this would be listed if had been listed previously for a tax deed auction in this auction?  Could I simply just call and find out?  The family won't know.

My plan would be to work out a deal with family to have the property deeded to me for the amount of the back taxes and value of the land.  I believe that is a fair amount so in essence 35k.  Everyone wins.  I would then hold as my very first investment property.

I never plan on Tax Deeds being my niche but this is a property that I've been interested in and my research has taken me there.  Any input or advice (specifically those who deal in this niche) would be greatly appreciated.

Dave Metsker · Answer

@Timothy Cervantes

I love tax deed sale properties.  Some of the best deals I have seen are from tax deed sales.  Delinquent taxes, together with a deceased owner whose relatives have no money, is about the best opportunity you could ever ask for.  Another variation of the golden opportunity still exists, even if there is a Medi-cal lien that appears to be more than the value of the property.

Account Closed · Answer

Very little Medi-Cal debt in California is an actual lien.  Medi-Cal debt is something the decedent agreed to while they were living.  They signed documents that said that the Dept. of Health Care Services could go after the assets in their estate after they died.  It's called a silent lien, as the debt is owed but there is usually no judgment or lien.  Open a probate and notify Medi-Cal and you'll find out the amount.....trust me, that's not when you want to find out.  There is no  reliable way I know of to get the debt amount, unless there is an actual lien or you open a probate. I have some contacts at DHCS and sometimes I can get the info and sometimes not.

Account Closed · Answer

I've never looked at the 1994 law. Thanks for this reference. I had heard that the voluntary liens signed by heirs were "illegal" but never understood why. I've had two demands come back at zero for very old recorded voluntary liens.....the change in law would explain that.

Medi-Cal and DHCS are FAR from detailed in their bookkeeping and what they can and cannot recover from a decedent's estate.  Anyone dealing with Medi-Cal debt should be looking at the actual, itemized bill and do some researching and consulting.

Timothy Cervantes · Answer

Kristine Marie Poe How does one determine if their is a Medical lien on the property, title search?

Rick H. · Answer

Been down this road many times before.

We can speculate and pontificate until the cows come home...here comes one now!

Are you willing to spend (and risk) the $9K to pay the back taxes?

If not, refer this deal to soneone who knows how to work it and monetize the lead or move on.

Account Closed · Answer

It would be difficult to pull off a deal with HSBC (which now owns Housekey notes) on this property.  It sounds like you have a deceased owner with no court appointed exec or PR. So you no have way to get authorization or permission to discuss the loan so HSBC won't /can't talk to you.  They won't sell the note either.  Ask me how I know.

The best way to wipe out the note and the clear the title without a probate is tax sale.

Rick H. · Answer

KPM is correct. The law was changed in 1994 that prevents DHCS from recording a lien without judicial action.

Subsequently, either PR affirmatively stipulates to a lienholder (voluntarily) or DHCS uses CA DOJ to sue.

Kristine is very experienced with medi-Cal claims and knows her stuff.

I work both sides since DHCS likes my company paying them by either by opening probate and providing the liquidity or working I conjunction with Department of Justice.

Account Closed · Answer

If the property is now in the name of estate of the deceased, the heirs don't own it and have nothing to deed.  They don't own it unless it was deeded to them or it was awarded to them via a probate court or other judgment.  Be cautious about getting deeds from people who have no ownership. Deceased owners is a very typical scenario for houses going to tax sale in CA.  Tax sale is sometimes the best way and only to to clean up and transfer title.

If you were to work with the heirs in order to probate the estate and transfer title you can run into a lot problems.  Multiple heirs being one.  Medi-Cal debt being the other. Fresno and the low value of the property make me 90 certain the decedent generated Medi-Cal debt. That's often a deal breaker and the better deal is to be had at tax sale.

In answer to your question, anyone can pony up the money and remove the property from the tax sale list.  Check the county tax collector website for the deadlines and how to pay.

Rick H. · Answer

1) Tax collector will probably take anyone's certified funds if it brings taxes entirely current.

2) Why ask here. Go to the source, the county

3) We should anyone consider your plan "fair" since you are the only one proposing to get anything. Stop thinking like a teenager and remember it's about them  not you.

Everyone favorite channel is WIIFM. ( What's in it for me?)

This may not be your end game however this property could always be used as trading wampum for another property.

Timothy Cervantes · Answer

Rick H. I appreciate the insight here.  I gathered all the info I currently have from the county website as far as the deed and just found more info.  But most of my education thus far in REI has not been anywhere NEAR probate, tax liens, etc.  The property is scheduled to go to a tax deed auction on March 6th, is there a different deadline you are referring to?

TAX DEED SALE - Owner pullback?

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