All Forum Posts by: Chad Coleman

Quote from @John Slater:

Quote from @Chad Coleman:

Quote from @John Slater:

assuming its a mortgage foreclosure sale (not tax or HOA) there is zero right of redemption after a foreclosure sale. so by 'moot', just means it doesn't matter. I believe it's the same as california where I am. In essence, once the foreclosure sale goes through, the borrower, homeowner, homeowners relatives (with probate) would have absolutely no right to come back for the property.

Do however get title checked for any additional liens that might show up, just in case, but if numbers make sense there's no reason not to bid and no worry about chain in title.

 Thanks John, here is what I read that concerns me:

"Texas law is clear that if a dependent administration is opened within four years after the death of the mortgagor, a foreclosure sale conducted in the interim between the mortgagor’s death and the opening of a dependent administration will be voided on the request of the dependent administrator to the probate court. See Pearce v. Stokes, 155 Tex. 564, 291 S.W.2d 309, 310–11 (1956). 

Title check is good and no additional lines, yeah I am really convinced since I am very familiar with the area and the recent sales but if what I understood from above is correct, 4 years is an awful long time to risk it! But this is out a research paper so not sure how applicable in real life especially with title companies. 

That’s an interesting mess to solve if that’s the case. You buy it, flip it, sell it, that’s another change in title, not sure how all that gets unraveled. 

Yes, it will be a mess if can't flip because no title company will insure it at this case. 

Here is another price of the puzzle - 
"Most title companies will not issue a title policy if the mortgagor died less than four
years ago, there is equity in the property, and no probate has been opened for the
deceased mortgagor’s estate. Therefore, even if the mortgagee was willing to take the
risk of foreclosing under these conditions, it would do little good if a title policy could
not be obtained when the property was sold after the foreclosure sale."

If that is true, then it is really risky in this case but wonder if anyone has been through similar situation and give us first hand experience. 

Thanks.

Quote from @John Slater:

assuming its a mortgage foreclosure sale (not tax or HOA) there is zero right of redemption after a foreclosure sale. so by 'moot', just means it doesn't matter. I believe it's the same as california where I am. In essence, once the foreclosure sale goes through, the borrower, homeowner, homeowners relatives (with probate) would have absolutely no right to come back for the property.

Do however get title checked for any additional liens that might show up, just in case, but if numbers make sense there's no reason not to bid and no worry about chain in title.

 Thanks John, here is what I read that concerns me:

"Texas law is clear that if a dependent administration is opened within four years after the death of the mortgagor, a foreclosure sale conducted in the interim between the mortgagor’s death and the opening of a dependent administration will be voided on the request of the dependent administrator to the probate court. See Pearce v. Stokes, 155 Tex. 564, 291 S.W.2d 309, 310–11 (1956). 

Title check is good and no additional lines, yeah I am really convinced since I am very familiar with the area and the recent sales but if what I understood from above is correct, 4 years is an awful long time to risk it! But this is out a research paper so not sure how applicable in real life especially with title companies. 

Quote from @Greg H.:

Zero issues at all in buying this property as probate becomes moot when the property is Foreclosed on assuming this is a trustee sale and not a tax sale. You will receive a Trustee’s Deed 

 Thank you! yes, it is a trustee sale not tax sale. Could you please elaborate on "the property becomes moot"? I have heard once before that a property was foreclosed on but when the new owner tried to sell it, he had to get  the hires to sign an affidavit to say that they are not pursuing the property and they are just looking for to get the foreclosure sale proceeds (obviously the property was sold at a price more than what the deceased owner owes to the bank).  I think the new owner got lucky to get them to sign but not sure what would have happened if they did not! I know this was a requirements from the title company. 

Hello all:

I am interested in bidding on foreclosure property but did a quick research and found that the owner is deceased 6 months ago and no probate case in currently open, the deceased owner was a single person per the recorded documents but no clue if there any hires to this person.  What would be the risk associated if I bid on this property? The property is located in Texas. I have read that the property won't have a clear title until 4 years passed after the owner passed if there is no probate case open during this time.  If a probate case gets open even after the foreclosure is conducted, it could nullify the foreclosure sale, want to doubled check if I understand this correctly.  Any info from someone ran into a similar situation would be really helpful! Thanks in advance. 

Quote from @Ashish Acharya:

Sch D. Yes, the expenses will reduce your gain. 


This was not a flip, so no Sch C and no SE taxes. 

 Thanks for your reply.

Just to make sure I understand, what about the EIN that was reported on the 1099-S? I am afraid that the IRS would think that I missed report it.

I have read that the expenses that I have mentioned above are not considered as an improvements and could not be deducted as rehab expenses, so what I missed here?

Thanks again for your help.

Hello All: 

Any help will really be appreciated.
I have a regular full time job with W2, married, started a single owner LLC in 2021 and purchased a property under the LLC in Dec 2021 with the intention to rent it. Then after I remodeled , I sold it in May 2022. Received 1099-s from the title company includes gross sale and under the LLC EIN not my SSN.
Can I file using schedule D or I must use schedule C?  since the 1099-s reported under the EIN?
Can I claim expenses such as: utilities, insurance, HOA fee, and Owner title policy?
Thanks in advance for your help.

Quote from @Frank Greg:

@Chad Coleman

I have lived in a house for 4 years and moved recently to a different house. Was thinking to transfer the old house to and LLC and rent it out. I think since I have lived in the house for full 4 years, there will be no capital gain taxes but my question what if I want to sell after I transfer the house to LLC and use it as a rental property? Am I gonna lose this advantage and will be taxed captain again at the time of sale? Thanks

If you are talking about transferring property from your personal name to an LLC or from one LLC to another... whether or not you have a tax problem, you will likely have a problem with your lender as such a transfer may be grounds to accelerate the note if the lender does not consent to or is not aware of the transfer.

 Thanks, house has no mortgage.

@Dave Foster

Thanks, that is what the LLC that I have, a disregarded and I am the only member. So, would you please elaborate on the cost associated with transferring the house to the LLC? What I am thinking is to keep it under my name for a year or two and if the rent work out, I will just transfer it and keep the property. If not, will just put it for sale. Thanks for your insights

@Steve Vaughan

Thanks, I really don’t know yet when I am gonna sell but possible after a year or two or even three like you said if the market bounces back.

So, just to clarify that I understood correctly, don't risk it means not to transfer to LLC, is this correct? So if I kept it under my name and rent it out, is this also would impact the 121 exclusion? I am guessing here if I still meet the requirements which is living there 2 years in the last 5 years. So I guess it won't matter if kept the house as a rental after the 3 years and would lose this advantage regardless.

For the insurance, I think I understand to have landlord policy, would it help to add an umbrella policy too? Or the landlord policy is enough?

Thanks again for your inputs! Really appreciate it.

I have lived in a house for 4 years and moved recently to a different house. Was thinking to transfer the old house to and LLC and rent it out. I think since I have lived in the house for full 4 years, there will be no capital gain taxes but my question what if I want to sell after I transfer the house to LLC and use it as a rental property? Am I gonna lose this advantage and will be taxed captain again at the time of sale? Thanks