All Forum Posts by: Denise Evans

Glad to help!

It depends on the bank.  Most do not have a specific form.  Just write something up called "Third Party Authorization" and have the borrower give the bank permission to speak to you as fully as they might speak to the borrower, about any private or confidential information.  Have the borrower sign, provide loan number, street address, and last four digits of social security number  Safest to have borrower's signature notarized, although not usually required.

Or, banks will usually allow a one-time authorization via phone if you and the borrower are conferenced into the call, the borrower answers some identifying questions, gives you authorization, and then drops off.

Good to know, @Jay Hinrichs. Thanks!

I agree with many of the above posters. Mobile home parks have the best cash on cash returns of real estate investment, but they are typically management intensive. Rural parks are best, because this is a preferred method of housing for very responsible families who pay their bills on time, but simply cannot save enough for a down payment.  Also, many rural people perform cash jobs off the IRS radar, but also insufficient demonstrable income to support a mortgage loan.  You might also want to think about senior housing mobile home parks. I had an Aunt who lived in one in California until her death. It was very nice with homes well maintained by residents. Almost all of them had sold their large homes, wanted to own their own housing but did not need something with a useful life of 40 years.  It was an economical choice, freeing cash for travel and other interests.

Josiah, there is no way to tell without more information. Ask your real estate agent for comps supporting his/her $115,000 value. Ask for recent sales in the area (because different submarkets have wildly different appraisals for the same house) and currently listed properties on MLS that are comparable. Those properties will compete against yours, when yours is listed. If comparable sales in the last year were $115,000, but there are five properties almost identical to yours, in the same neighborhood, listed on MLS for $100,000, then your value is some place south of $100,000. This might be because of a recent downsizing by a large local employer, controversy over tainted water, or recent violence in the neighborhood panicking homeowners into selling. So, get the data from the agent, and then evaluate it. I'm not saying this is the case with your agent, BUT it is a not uncommon practice for agents to over-value properties in order to get listings. Then, over time, the owner gets discouraged, reduces the price, and the property eventually sells for its real market value.

State law in Alabama requires that 25% of all county properties be re-appraised every four years. There is simply not enough manpower to do that. As a result, the counties rely on artificial intelligence software to calculate the appraised values. Often, they are wildly wrong. If the tax appraisal is too high, the property owner protests and gets it corrected. If the tax appraisal is too low, the local government doesn't get the full amount of taxes they could, but when compared to the manpower costs to get accurate appraisals, it doesn't matter.  If a tax appraisal is too low by $50,000, and if the property is owner occupied residential property, then it is assessed at 10% of its tax appraised value.  The taxes might be around 5.5% of the assessed value. So, tax appraisal wrong by $50,000 makes the tax assessment wrong by $5,000, makes the tax bill too low by $275.  It's just not enough money for the county to stress over.

As far as appraisals, the appraiser is allowed to used foreclosures and short sales as comparables if the market is primarily foreclosures and short sales. Here is an excerpt from Fannie Mae rules regarding appraisals and foreclosures: 

It is acceptable to use foreclosures and short sales as comparables if the appraiser believes they are the best and most appropriate sales available. The appraiser must address in the appraisal report the prevalence of such sales in the subject's neighborhood and the impact, if any, of such sales. The appraiser must identify and consider any differences from the subject property, such as the condition of the property and whether any stigma has been associated with it. The appraiser cannot assume it is equal to the subject property. For example, a foreclosure or short sale property may be in worse condition when compared to the subject property, especially if the subject property is new construction or was recently renovated. For appraisals that are required to be UAD compliant, the appraiser must identify the sale type as REO sale or Short sale, as appropriate. (For specific information regarding comparable sale adjustments, see B4-1.3-09, Adjustments to Comparable Sales, and for information regarding financing types, see Fannie Mae and Freddie Mac Uniform Appraisal Dataset Specification, Appendix D: Field-Specific Standardization Requirements). "

@Gabriel Welch

The classes and books and videos are on my website.

You have to research Alabama in particular, because it is very different from other states. When you purchase at the auction, you buy the tax lien, but you are also entitled to immediate possession. You can fix the property up (if needed), rent it out, and keep the rent money even if the owner redeems. Plus, they have to pay you for the VALUE (not the cost) of the preservation improvements. That is, the before-and-after difference in value of the property because of your preservation improvements. After 3 years, you receive a true tax deed. The money-raising strategy comes from buying properties from the State inventory that did not sell at the annual auctions.  You can buy for as little as $1,000, with a redemption price of many thousands of dollars, without having to make any preservation improvements.  I have classes, videos, and a book on this topic if you are interested.

Gabriel, you might want to check into Alabama tax sale properties. They can be purchased for VERY little cash. In the range of $1,000 to $2,000. With the right strategy, they will almost certainly get redeemed rather quickly, generate far more than the statutory 12% interest, and cost you absolutely nothing in rehab expenses. After you do a couple of those, you will have the equity you need to target rehab-and-keep tax sale properties, or the equity for a more traditional real estate purchase.

Do not rely on Zillow. Research the property records to find mortgages. Unless a mortgage is more than ten years old, the principal balance will not have reduced by very much.

If a property is correctly listed as a short sale, but the 1st mortgage balance is less than the list price, then a 2nd mortgage is causing the problem.

Call the listing agent to see if they will give you more information that will yield some insights. If not, then talk to some other agents who work in that same price range and area of town. I guarantee you, most of them know the story behind that property.

Then, get back in touch with me.