All Forum Posts by: Daniel Kern

Thanks @Alex Deacon for the rough formula, that was very informative and what I was looking for. Would this rough estimate/hypothetical situation make sense to you as far as math goes or are there additional fees and holding costs I'm leaving out?   For example...

150k ARV property with 6,000 annual taxes and a 10k tax and sewer lien

150k - 10k lien - 18k (3yr taxes) - 35k rehab - 15k unknown - 40k flip profit - 15k sales cost = 17,000 Max premium bid

Thank you @Alex Deacon for the response and I agree that I am not ready for this type of investment strategy, but I wanted to attend to at least have a better understanding of the process.  Having a team seems like a naturally good idea in addition to that endless supply of capital. Can you elaborate on how you determine your max offer per lien and how this would be impacted by the value of the property?  

I had gone through the whole list and came up with my estimated value of each property I was interested in, but I assume there is a more formalized calculation of Lien Amount to Property Value to Max Bid?   I understand these formulas when it comes to property for flips, buy and hold, etc... Just trying to dig through the nuances of tax lien purchases as a potential future investment vehicle.   Thanks again for your insight!

Hi All,

I have been reading about Municipal Tax Lien sales since my city held their sale last year. This year I decided to register and attend my first tax lien auction. I had identified a few properties on the list of interest with a non-redemption strategy in hopes to initiate foreclosure after the 2 year redemption period, here in New Jersey, thereby acquiring a property or two with future plans to fix and hold or flip, etc.  Well, I was definitely out of my league. I know tax lien investing is more of an advanced strategy so I went in only targeting a couple properties, but I wasnt even in the ballpark. Almost every property on the docket went to premium bids, some as high as 10,000 to 47,000 on a 7600 tax lien.  You could tell there were experienced "players" in the room with a seemingly endless supply of capital. My question though, is how do these investors "value" the lien and set a limit on how high they are willing to bid? Some properties, that I wasnt as familiar with, went for only a couple hundred to a couple thousand dollars. Where do you experienced Tax Sale investors find value and how can one determine a max bid on lien? Is there a formula  or rule of thumb Im not aware of?  I was glad I attended for the experience (didnt even make a bid though) and am hoping to be better prepared for next year (or another city).   Thanks in advance!

How do you handle rent collection and bill pay?  Just electronic pay and auto withdrawal?  

I have found a few multi-family properties I am interested in purchasing, all meeting at least my minimum cash flow numbers and Cash on Cash percentages, however these properties are about 4 hours away from my primary residence. The costs are far better where I would be investing than where I live and number still seem to make sense, even with factoring in 12% PM fees for them to advertise, rent, execute the lease, manage, pay bills and vacancy factoring. Does anyone have any similar positive or negative experiences they could share? I have a couple properties in my area, one in Florida, and this is western PA. Like most of you, Im a bit of a control freak when it comes to my investments so I self-manage and am in contact with my tenants so this is outside the box for me to allow/need the PM to handle all aspects of this investment due to the distance, but if the numbers are there take advantage of it... right? 

Send me the info, I'd like to take a look at it

Thanks Mike for your response.  It’s a 200k property so I was hoping to be able to work a deal with a homeowner looking to unload but it seems, from your experiences, that this one might be better left to the banks.  Do you have a process you work through when you find a home that you could share since you mentioned “you’ve done a few” that would help me and other users moving forward?   Any help would be appreciated.  I’ve sent the letters, gotten a few calls, but haven’t closed a deal.  Is there a “right time” to find these off market finds?

Hello, I’ve been yellow letter marketing for a bit now and got a response from a lady who is listed as the owner of the home and “would love to sell her home” And it’s one I’m very interested in.   

She told me  “i tried to sell. We went to the day before settlement. The two banks are in a fight as to whose in first place. The first place bank gets the larger share of the selling price. So, I declared bankruptcy. As of January 2013, the state owned the home. 

I contacted her lawyer and the loan servicer  

The lawyer says “Please note that Ms. anonymous  filed a Chapter 7 Bankruptcy with our firm in 2012 and it was Discharged in 2013. Therefore, she is no-longer in bankruptcy.

I’m at a loss. What’s the next step?  I want the house she wants to sell but thinks she can’t. She’s still listed in county records as the owner. Anyone have similar experiences and/or advice?

Thanks @Melvin List   What are your thoughts after the two years.  Refi into 30 year for cash flow or 20/15 year to payoff house? Also, it's written into contract that I could get a third year "extension" which I hope to capitalize on so again it's a question of length of refi?

Great points guys, thank you for the feed back. @Shawn Q. what do you mean "you have one bank-backed loan at this point, which would allow you to do owner-occupied financing?"  I currently carry two mortgages, my primary residence and one rental property (and the triplex at the end of the month). Wouldn't owner occupied financing only pertain to my primary residence?