All Forum Posts by: Allie Nasatowicz

Great way to lay it out, thank you for the input as a fellow Mainer! Considering he had purchased from the town it was QC because they were selling their rights to it, that must be why he also had to track down the previous owner and have her sign off on it as well, or something along those technical lines. The lien is a judgement lien from a court ruling, we made it clear from the start we wanted the title clear/insurable and he has been working hard to do it for months now since the issues were discovered, I have to give him credit for that and hopefully he can reach an agreement with the lienholder and clear that for us to move on. I'm sure at this point he is ready to just do whatever he needs to in order to unload the property because it has turned into quite a nightmare on his end! Also quite the lesson on exactly why you should buy with title insurance!

Thanks for the reply Jason! When I last spoke to him he was just letting us know he had contacted the lien holder and they had no proof the town had taken the property, I didn't think to ask what type of lien it was though so I've sent him a message about it. I'm assuming there are some types of liens that are more likely to be negotiated or are easier to resolve? I do know the amount on the lien is for $21K though. A bit steeper than we hoped (i mean we all hope for nothing but ya know 😅), but if like you said, we could negotiate it out, even if for a little more than .30 on the dollar it would make it much less intimidating. If we purchase it will be a cash sale so no financing to refinance on later but there would be other avenues to borrow the money for the lien if we really needed. That seems like a reasonably obvious answer that my stress induced thinking completely ignored.

Now, if he does resolve the lien himself or we purchase anyways and get it taken care of, moving forward it shouldn't matter that he had purchased QC and ran into all these issues, right? As long as we're diligent about making sure everything clouding the title gets taken care of during this change of hands of course. So if we repair and go to sell later we should have no problems with the title and someone being able to obtain title insurance on it for financing? I had heard somewhere in the case of tax acquired properties some companies don't like giving out policies on those titles but I can't remember what context that was in or if its even true. Or are these things that will effect the title moving forward in any negative ways even if we remedy them? 

 Is there a general rule of thumb when considering the expense/profit margins?  Or things to take into consideration that newbies like ourselves might not think of when it comes to buying a property to repair and sell. Like I said we've already had multiple estimates given to us so we have a good idea of what it will take to bring it back to life, but the lien wasn't something I had originally figured in. Taking it on at full value would still leave a margin for possible profit but it is obviously much smaller and i am naturally paranoid so when is a small margin too small? That is probably more based off each person and situation but just generally speaking. Negotiating the lien down in amount if possible will probably be key to us, but I'm a "worst case" kind of planner so the lien has really sent me down a rabbit hole trying to find information to aid in deciding which way to go

Okay first I want to layout the situation I have questions about, questions at the end. Sorry if its long, those that read it all and respond, I thank you in advance! 

My husband and I have always been interested in buying and selling real estate but financially there was never a viable way to "safely" consider doing so until more recently. A friend of his owns a property that had been town acquired for back taxes, he had then purchased on auction from the town with a QC deed and got the taxes paid current. Originally a friend of his was going to stay there and just pay him enough monthly in "rent" to cover the yearly property taxes but the friend never paid anything and only stayed there for a few months leaving my husbands friend a property he is paying taxes on but has zero use for and lacks the time/money to do the repairs to fetch a decent price; so he has been trying to simply sell for what he paid and let it go. We looked at it, had many quotes given on work that's needed that we can't complete (mostly what is driving the price way down and also the most costly repair is that it needs a well installed, it was previously on a community well but a neighbors septic install compromised that properties connection to it so it has no water) but ultimately we told him we would buy it given the title was clear. The other properties he has purchased from the town gave him no issues so he wasn't expecting any but we went ahead and got a lawyer to handle the title search and closing in Aug of 2020. They found a couple issues with the title so he got his own lawyer to sort them out so he can sell it and he has been working it for some months now. To the best of my knowledge, there was something wrong with the deed he had recieved from the town, or it had to be corrected some how, and he also had to find the previous owner and have them sign something essentially saying they didn't want the option to buy it or claim it(i believe). He found the previous owner actually works with his mother (I love small towns, haha) so getting that out of the way was easy and she was happy to sign it away. He got the corrected deed from the town after but that leaves one more cloud in the form of a lien found in the title search, which he was much unimpressed to learn the property had. Just in the last couple weeks he got in direct contact with the lien holder who had no record the property was acquired by the town, let alone QC deeded out to him, so now he is trying to sort those things out with the lien holder.

Essentially, I am wondering if we should really continue waiting for this property or if we should just begin searching for a different opportunity. I know nothing in real estate is ever speedy, and we aren't opposed to waiting it out but I'm not sure if he will even be able to resolve the lien or how long it will take just to get the paperwork straightened out and up to date. 

Second question, could/should we consider buying the property with the lien? How would that work if its possible? Ultimately goal would be to sell the property, so taking responsibility of the lien we would have to pay off the amount and have it clear before we could sell with a clean, insurable title, right? We have the chance to purchase at a really low price which is really tempting and leaves us a really great margin to work with but taking on a lien with it would cut into that margin greatly and that makes me worry more that it may not be as worth it in the end.

Being that it would be our first delve into the real estate world I'm not sure if we'd be taking on more than we want or can handle. Anyone have stories about buying properties with liens and how it all works? I am beginning to think we should take this experience of his friends to learn to never buy a property without first having the title checked! I would really hate to be in his position and I'm extremely glad we decided to get a professional title search before just buying it from him 😅