All Forum Posts by: Bob Jones

Hi,

I have a question about judgments. I'm hoping someone can clarify something. 

Sometimes, people have common names. When this is the case, a judgment search may reveal possible judgments against them. The title company now needs to determine whether the judgment attaches to the property. In this situation, there are a few things you can do. 

If the possible judgment is against someone with the same name as the seller, you can contact the judgment holder and verify that the SSN's aren't the same. If the judgment was against a previous owner, you're not going to have their SSN. But, the seller will hopefully have a title insurance policy from when they purchased the property. Your title company will feel comfortable insuring the transaction, safe in the knowledge that the previous title insurance policy can be used to pay off any unreleased prior judgments. 

If the seller didn't get title insurance, your title company can at least contact the prior title company and ask them how they cleared the judgment. They may be able to provide the prior owner's SSN to your title company, thus allowing them to clear the judgment. 

But, what if the seller didn't get title insurance and didn't use a title company when they purchased the property? Let's say the seller was dumb and paid cash for a property without ensuring that there were no title defects. Now, and a judgment search reveals a possible unexpired judgment against a previous owner with a common name. 

This is where my knowledge ends. What do you do in that situation? 

Hi,

I live in Maryland, and I'm interested in doing a house hack. I want to buy a property and find a renter who can either cover or heavily subsidize my mortgage payment. A duplex would be ideal. Though, I'd also consider a a setup in which I could rent out something like a basement apartment.

I'm wondering if anyone can give me advice on areas to target. I'm looking for something $150,000 or less. I work in Owings Mills, so I'd want to be within 45 minutes of that area at most. I'll be living there, so I don't want a home in a dangerous area. Also, I'd generally prefer to avoid Baltimore City.

Does anyone have any advice on areas I should look at?

@Art Perkitny

Thanks Art! That's very helpful. 

This is a bit of a newbie question. I assume there must be color coded maps which let you see property values at a glance. But, I'm having trouble finding this online.

I'm not sure if there are any mapping programs which show you the entire nation, or if you need to search for maps specific to your part of the country. If the later is the case, I'm trying to find a map of home values in Baltimore City and Baltimore County. Can anyone offer any advice? 

I recently read a book called Building Wealth One House at a Time by John Schaub. It recommends a tax strategy that I don't fully understand. I'm hoping someone can explain it to me.

According to the author:

"If you have cash flow from another source and you are paying income taxes now, you can start buying better located, more expensive houses. With these houses, more of your profits will come in the form of long term capital gains, taxed at a lower rate. A bonus is that if you leverage the house, it can produce a tax shelter today to offset your other income.

An advantage of investing in several houses rather than one big building is that you can buy some houses for cash flow and other property for maximum capital gains and tax shelter today."

I don't understand what this means. How does an expensive property serve as a tax shelter? How do you leverage such a property? Sorry if this is a dumb question, but I'm not familiar with this concept. Is anyone able to clear this up for me?

Hi,

I've heard it said on this site that investing in real estate requires 2 of the 3: Money, Knowledge, or Hustle. Well, I have a little money, and I like to think I'm a quick study. One thing I'm more reluctant to give up is my time. I already have a demanding job and a busy life. I want to invest in real estate, but a lot of investment strategies strike me as rather time consuming. 

I'm hoping to get some advice. What are the best strategies if your available time is limited? What would you recommend to the person who has money and knowledge, but is short on free time?

@Eamonn McElroy

None. I'm just figuring out my options. 

@Kyle J.

Yeah, this is not ideal. I'm just brainstorming my options. Though, if they got a mortgage, wouldn't the lender be required to pay off my lien before the DOT is recorded?

Hi,

In the past, I've explored the possibility of selling homes with seller financing. To my great dismay, I discovered that if you do this too frequently, you'll be classified as a dealer. As such, you will have to pay taxes on the entirety of the note up front. Obviously, that would be a big inconvenience. 

I'm just exploring my options, and I had an idea. What if I sold a home, and then gave someone an unsecured private loan? If they stop making payments, I can then put a judgment on the house. 

I'm not saying I'm going to pursue this option. But, I'm just wondering if it would work. If I do this, will I be taxed on the money I make over the course of the year, as opposed to being taxed on the entirety of a note up front? 

Hi,

I have a business partner who has provided money to my LLC, which I will use to invest in real estate. The agreement is that I will do the work and give them a percentage of the profits. I'm trying to figure out how they are going to be taxed.

When I give them money, are they just going to pay basic income tax? Will they be subject to self employment tax? I may be engaging in seller financing. If this is the case, they will be receiving monthly payments from my LLC. Would this money be subject to capital gains tax?

I'm hiring a contractor, and I want to confirm that they are properly licensed. I've contacted someone who says they are licensed. But, how do I verify this? Should I ask for a picture of their license? Is there some sort of state database where I should be able to look them up?