All Forum Posts by: Paul Hector

Hello everyone and thank you to

@Brian Gibbons @Roy N. @John Rooster @Stephen S.
@David T. @Thierry Van Roy @Jerry W. for taking the time to reply to my post. I really learnt a lot from your responses and I had no idea that such a thing as a reverse mortgage existed.

Not sure if I will be able to use any of these approaches, at least in the short-term in my real estate investing but may be an option that sellers I contact might be interested in?? Let's see...

Hello

@Roy N. and @George P. Thank you both for chiming in on this post!

Yes @George P. i would appreciate your landscapers contacts. PM it to me!

Thanks,

Paul

In France one way that people regularly acquire real estate is through something called a "vente en viager", which translates in English to "sale by a viager". Here is how it works:

This type of transaction allows a person to sell a property they own, benefit from the equity they have built up in the property and receive a monthly cash inflow from the buyer until they die. Most sellers are usually above 70, 80 or even 90 years old. Their properties are mortgage free but they are not able to obtain a HELOC from a bank. This type of sale allows them to get a lumpsum - perhaps to do all the trips on their bucket list - and then supplement their pensions which they may have started to receive 20 years or more ago and are no longer adequate for today's costs.

Basically the purchase consists of two parts: a "bouquet" or an upfront lumpsum that may be anywhere from 15% to maybe 50% of the property value and a monthly or annual payment (called a rent) that continues until the owner dies. The seller is responsible for continuing to maintain the property.

For the buyer, this allows them to purchase a property potentially for significantly less than the market, they may also benefit from market appreciation. But the success of the strategy depend on how long the seller lives as the risk is that they could end up paying more than the property is worth.

There is one famous story, perhaps an urban legend, of an investor who purchased a viager from a 90 year old woman who apparently lived to past 120 years old. The buyer died before the seller so his estate had to continue paying the monthly rents.

In some ways this type of sale is a bit like seller financing, except that the seller continues to live in the house and there is also no 'fixed' sale price.

Have you ever heard of anything like this in the USA?

What are you thoughts on this type of approach?

Hello @Aaron Yates

, @Darren Sager , @Aaron Yates

, @Paul J.

Thank you all for your feedback and suggestions which I greatly appreciate and value!

Actually, I just purchased the property and am now doing a few upgrades for the inspection prior to renting it out, so for the moment snow removal is my responsibility. Will of course ensure that this and other aspects like lawn cutting etc are included as tenant responsibilities in the rental agreement. Will also follow-up on @Akiva L. and @Darren Sager suggestions about pooling!

Thank you all,

Paul

Hello BP'ers,

I am an out of area investor with an SFR rental in the Redford area. What sort of rates are your paying for snow removal services? Are you paying on a monthly or seasonal basis? Which individuals or companies are you using for your snow removal service? Thank you for your advice.

Paul Timmins could you elaborate more on the specialty niche markets in Pittsburgh and Atlanta that you were referring to? Thanks.

Hello Annette,

Please note that the link you've posted here doesn't work.

Thank you Jean Norton, Jerry K. and Ned Carey for your comments and advice!

Actually Joan, I am out of the country so the OTC purchase option may not be feasible for me? Do you know of any Counties/States which offer their OTC liens online?

Jerry, I really appreciate that nugget about how one can find the liens which were won but not paid for! I would have thought that the penalties the Counties place on winning bidders who don't pay - I think I recall reading about things like additional fees, barring them from future auctions or even forfeiting the liens that have been won - would discourage this?

Ned your perfectly right about specializing and finding the niches that fits ones strategy best. Do you know of any resources - whether free or paid - which provide an overview of the rules for counties that offer fully on-line purchases of their liens?

Thanks again for sharing your knowledge and insights! Paul

The County confirmed my purchases in a recent Florida on-line tax lien certificate sale.

My strategy was to bid on liens between $300-$600. My goal was the high interest rate not foreclosing, so I focused on properties with no outstanding liens and out of State owners/mortgage holders. I also made sure the property value was at least 50x the lien amount.

I started working on this about 1.5 weeks before the auction. I selected the properties in my lien buying range and used the County's online database of property records to check payment history and proeprty values as well as tools like google maps and zillow.

During the auction, I found that between my initial research and the cut-off date for making payment on the lien many of the properties I had selected for my watch list had been paid off. I guess this in a way confirms my selection strategy.

I picked up 1 lien in the first round for just under $700. In the successive batches there was really a lot of competition and was amazed to see even non-institutional investors bidding the prices down to as low as 3% even where they were the only bidders. Many institutional investors came in durign the second round and promptly placed bids of 0.25% even on properties with liens of $400 if they were within condo complexes. Some bids submitted didn't process as the IT system wasn't keeping up and the bidding had to be paused at some points.

Preparing for the auction was really a lot of work, certainly not passive. It was also a really great learning experience!

As I didn't plan on investing more than $5,000, I fully realized from the start that the very best I could hope to receive for my efforts - before taxes - was $900. So this REI strategy I guess only makes sense if you have a lot of cash and/or time. I still plan on taking part in other auctions, hopefully will eventually be able to partner with others who have funds but may not want to do the considerable research this involves.

Looking forwards to receiving my 13.75% interest returns from the lien auction purchase!

A BIG thank you to Bigger Pockets forum experts like @nedcarey @jerryK whose post have been an invaluable source of learning!!

Would also love to know what strategies, filters or approaches other seeking to primarily capture high interest rates use in identifying, selecting tax liens to invest in? What else can be done to more effectively and efficiently participate in these auctions?

Thank you everyone!

Hello Hadi,

Welcome to BP!