All Forum Posts by: Bruce Kinser

Good Luck with that plan.  I would say that you're too optimistic about the kind of discounts you can find with heirs.  Some will sell you at discount, but most, and this is my experience, is that they will attempt to sell through an agent before giving away 70% of their equity.  I'm not trying to throw a wet blanket on your plan, but I am just saying that discounts beyond 30% are a rarity....largely because it's so simple to figure out the value of these homes, and if the home is in decent shape, the heirs wouldn't have much motivation to sell at a deep discount over retail.

I would recommend that you avoid taking out a loan--private or otherwise--I would just flip the contract.  If you latch onto a good deal, you should have little difficulty in finding a end-buyer.

Again, best of luck to you....

Can you put me on your email list for FL properties:  [email protected]

Thanks,

Bruce

Well let me be the contrarian here among all the Orlando cheerleaders. The Orlando market for investors looking to flip, or fix & flip and to make any sizable return is very, very competitive--thus not ideal in my view. It's the old law of supply and demand--too little supply and too much demand.

If you're looking for "deals" with sweat equity, they are few and far between. Most of the bank-owned property and decent Short Sales receive multiple offers whereby the buyers push up prices to the point making such investments marginal at best.  

I've been in this market for over ten years and have never seen it as bad as it is today, I'm sorry to say.  I'm active in the market and receive many emails from wholesalers too, and most of the opportunities seem to be more and more OUTSIDE this MSA.  

The other homes pitched by wholesalers are priced so far above $200K (above the median homebuyer's price), meaning that you have to risk more and more of your capital by selling at an even higher price point, which likewise decreases the size of the pool of eligible, and qualified buyers.

As my good friend, @Scott Wagoner, stated pretty clearly in a recent post here on BP, that the investor community is being squeezed by rising prices for wholesale property, but retail prices aren't increasing as much nor keeping pace.  So margins are coming down in a big way.  In my view, the wholesale market for homes in the Orlando MSA, is in a over-bought situation.  I would advise to look else where for greener pastures.   

You're right to be cautious about bidding on foreclosures online in Orange County, FL. I have heard horror stories about people bidding on second mortgages, thinking they were 1st mortgages--thousands down the drain. Also, people bidding on HOA liens, when they thought they were getting the home at a significant discount--again as they say, "all sales are final."

Most importantly, you need to read through the bidding instructions that say you don't necessarily get CLEAR title when you buy through the county--big downer.  You can lose a lot of money if you don't know what you're doing.  You basically have to pull a full title history and report to do your own due diligence Because of this, I would recommend only experienced investors bid on these properties.  

You'll notice as well, that most of the properties scheduled to go to auction sale, are in fact cancelled due to many reasons.  I mention this as you have to do your homework on every property you wish to bid on, when maybe, 1 out of 5 are actually sold to third parties.  You can go see for yourself on the county court website just how little is actualy sold to third parties...those sold are mostly sold back to the lender.

My last issue is that online auctions, because they make it easy for many investors to participate, it tends to drive prices up--not good.  So the deals you end up with are, at least for me, are not worth the effort--too much risk.  Others on this forum may disagree, but you have my opinion, for whatever it's worth.

Bruce

I thought I would throw this out there as I didn't see it addressed in any of the archives.  

The Grantor of a property is asking me what, if any tax consequence, would occur if she transfers the deed to me via a quitclaim deed.  The transaction does not have the Grantor receiving any funds, other than the customary $10 consideration.  

The property will have a little equity at the time of transfer (approx $20K), however, the property is largely encumbered with a mortgage balance of $170K.  The Grantor understands that she is still liable for making the payments, and I will assume that responsibility until renovating the home and selling it outright for a higher price.  

Based on this information, what taxes would be due by the Grantor under this scenario, if any?

Thanks,

Bruce 

Thanks for the reply...

I have a friend that owns a vacant rental home that she hasn't made a payment in years on and is in foreclosure status.  As her real estate agent, I've attempted to work with her and the bank to short sell it.  We've had several workable offers in my view, however, the bank or the buyers were not able to agree price.

Now, comes along the lender (out the blue) with an offer of a loan modification that reduces her principal significantly to a point where we can sell the home without having to go through a short sale.  But the problem is that she has to make her payments for a 3-month trial period and there is no guarantee that the bank will follow through with the initial terms given in their offer.

My friend doesn't want to make even the trial payments as she is close to retirement age and just wants to get rid the place.  My thoughts were to offer the home on a lease-option whereby the tenan-buyer could make a small option payment, then make a payment to cover her's to the bank and include a clause in the LO agreement that if the payment is adjusted by the bank, the the tenant-buyer's would adjust as well.  The only issue then is what if the bank fails to honor their own offer to her and then continues to proceed to a foreclosure sale?  

Any suggestions would be appreciated.

Would recommend www.taxtitleservices.com.  This company out of CA does what an attorney can do for you for a fraction of the cost.  I have personally used this company and they are very fast and very professional.  Good Luck!

Hi Aleks,

I'll be more than happy to help your clients.  I'm looking for buyers pre-qual'd above $250K.

This home is over 3 years in arrears, and it's over $100K under water....don't think it's a candidate for this idea.  Thanks though....