All Forum Posts by: Account Closed

I don't have any special insight as to what to do, but I just rehabbed a townhouse that smelled as though the prior owner had been smoking four packs a day for twenty years without ever opening the doors or windows. It was bad. After replacing all of the carpets, removing three layers of wallpaper, and painting the whole house, it is 95% better, but still lingeringly musty. I'm under contract; the new buyers are also smokers. So, I didn't have to take any major steps to remedy the issue, but I am interested to hear others' tips.

My real estate agent said that there is some chemical that you can put on the walls and literally watch the nicotine run out of the walls (don't recall the name). He apparently had a client that had success with it.

Phillip,

My quick thought would be to "stress test" your re-fi numbers at higher interest rates (5%-5.5%) because there's a significant chance that 4.5% rates will be long gone 12 months out.

Good luck,

Adam

Nigel,

Welcome and good luck. I don't do any wholesaling, but I can tell you that inventory of well-priced properties in Atlanta is very tight right now (which I would expect hits the wholesalers fairly hard at the bottom of the investing "pyramid"), so don't get discouraged if it takes some legwork to get your business rolling.

Adam

Lots of anecdotal talk of a real estate bubble developing, institutional investors heading for the exits, and calls for an imminent slowdown, if not a double dip from the talking heads and those that like to provide their unsolicited opinion on such things. Of course, the standard "real estate is local" caveats all apply but I don't think there is much argument that the rapid (and unsustainable) appreciation from earlier in the year is gone, replaced by a slow grind higher (?).

What is everyone seeing in their markets? Is demand noticeably softening? Days on the market up? Or are things still rocking and rolling? Obviously your mileage may differ since flippers aren't necessarily looking for full retail price, while buy-and-holders may be, but curious to hear different viewpoints.

Personal impression: properties continue to fly off the shelf in the "hotter" areas, but the "lukewarm" to "cool" spots are slow-to-fairly-dead. In my neighborhood ("lukewarm" - stable, older neighborhood), listings are noticeably up, some of the nicer house are moving, if well-priced, but other houses are sitting. sellers definitely don't appear to be making a killing.

If there is a major inflection point coming, BP and its membership should presumably see the signs coming well before the mass media and economists that depend on monthly reports with significant lag.

You should really just listen to @BillGulley and forget the rest of us...I'm confident he could pass a real estate bar exam with flying colors.

Interesting article. Eventual rise in rates (likely winter/spring '14) and exit of institutional money seem like the two major variables to account for in near-ish term.

Unless there is a lis pendens, litigation isn't typically an issue because bona fide purchasers take the property free and clear of claims of which they don't have notice. Other than calling up the owner and asking or getting a rep/warranty about claims, not sure there's any good way to find out about potential claims. unless the potential litigation involves title, you should be fine. For pending litigation, many courts have online databases that you can search for litigation involving the owner. Try the county where the property is located or the owner's registered agent is located.

You said that the home has a "final judgment" on it for $216k. Is that judgment related to the defaulted first mortgage or something else? It sounds to me like you are thinking of structuring this as a pre-auction payoff of the owner's first mortgage debt subject to the second lien and past due taxes. Not knowing any other details, the sale will almost certainly be subject to the HELOC lien, i.e. you should definitely be concerned about the 2nd. I know of no creative way around the second lien - you can either pay it off in full, attempt to negotiate a discounted payoff, or buy subject to the lien.

Using your numbers, if the house sells at auction at a discount to FMV around $300-350k, the second lienholder will be getting somewhere around $80-$135k. Given the equity in the property, they have no incentive to discount the lien payoff below that range for a sale to you. But, depending on the amount of the second, if it's low enough, you might be able to simply negotiate a close to full payoff and still come out ahead. Of course, you are most likely going to have to come up with cash to payoff both the first and second because traditional lenders won't usually mess with these types of title issues.

This is a very complicated structure with a lot of moving parts for your first deal...good luck!

To answer your specific questions, you can file the quiet title action at any point after you obtain title to the property. For your purpose, there is only one auction - the tax deed auction. The county does sell a tax lien prior to that, but its not an auction and in practice only one or two institutional buyers buy all of the liens in bulk.

Here's a general overview, but this is not legal advice and you should not rely on some guy writing stuff on the internet without first talking to an attorney. In essence, you will be filing a lawsuit naming as defendants all prior owners or interest holders in the property in the past 18 years, which is the statute of limitations for adverse possession in Georgia. Your claim is that you have superior title to the property by virtue of taking it through the seller who bought it at the tax deed sale. You have to serve each of the prior owners, who then have an opportunity to file an answer and make their argument to the court about why the tax sale did not extinguish their interest (most frequently, lack of notice of the sale). The court hears the arguments, and then, if all goes well, rules that your title is superior to the prior owners ("quiets title").

Quiet title actions can take between 4 months on the short end (if uncontested) to more than a year if a prior interest holder fights you.

One thing to be wary of: you may know this, since you plan to quiet title, but you (or your future buyer) will not be able to get title insurance until that is completed. That limits the deal to all-cash or perhaps hard money, since no major lender will make a loan without title insurance.