All Forum Posts by: Denise Evans

I have some free and paid resources specifically created for Alabama landlords. Check out my book in the Marketplace--"Alabama Landlord's Desk Reference and Forms Book." The post below includes a link to the table of contents and index, so you can see the book covers all the topics you need.  It is at

http://www.biggerpockets.com/forums/517/topics/186...

I'm always happy to answer questions, ,and take phone calls.

Can anyone recommend an Alabama accountant who is familiar with tax planning issues important to small real estate investors?

If the tax sale investor never took possession, then the prior owner still has redemption rights, even though it might be more than three years since the tax sale. Contact the prior owner or heirs, and see if you can get a quitclaim deed for very little money. This will entitle you to redeem from the investor. I have classes, books and dvds on tax sale investing in Alabama, if you want more information.

Julie, what do mean "there are outstanding back taxes from 2007-2008?" Was the property sold for unpaid taxes back then?  Every property with unpaid property taxes MUST be sold in the next year's tax auction.  Or, do you mean an IRS lien?

If the owner died before the tax sale, but the tax auction is in her name, then the auction is void.  If you buy at a void auction, the heirs will eventually be able to get the property back, even many years later. They will have to pay you for the taxes you've paid. Some experts say they must also pay you interest. Some say not.  You will not be able to rent the property out and keep the rents, nor will you be able to make preservation improvements and receive their value upon a redemption.

Regarding lien holders, everyone except local government liens (grass cutting lien, sewer lien, etc.) must redeem from the tax sale investor BEFORE they can foreclose their lien. As a result, the investor is protected.

I use www.AlabamaLegals.com It is an online database of all the published foreclosure notices (and other legal notices) for the entire state.  You can search back for a 90-day time period.  You can filter by county or by newspaper. The search engine is not very robust, so you either need to scan through all the notices for a particular county and time span, or choose a distinctive word (such as subdivision name) on which to search.

Hi Trace, I will post a blog article about business entity choices in Alabama and pros and cons of each as relates to management, taxes, and asset protection. Please keep an eye out for it. The easiest way for you to acquire your first property is to get something like a converted house in a business area, that you can use as an office and perhaps split off into other offices to rent out. With a brand new law degree, you can probably get good financing terms.

The Governor of Alabama has before him a bill to shorten the post-foreclosure redemption time period from one year to six months, but only for properties that are (or were, until recently) owner-occupied residential properties.  The hidden peril is this--the lender must send out a specific notice at least 30 days before the foreclosure. If they don't send the notice, or the notice is defective, the redemption period can be as long as two years. What do you think about this?

@Steve Babiak Here are some of my most commen problems:

Collections.  Slow pays with a different story each month. Don't waste my time with your stories. I'm making money on your late fees. Abandoned personal property. Not wanting to "bother" me with repair requests that result in more expensive repairs.  Bonding with my employees against the common enemy--me.  Leaving HVAC on with all windows open. Sure, the tenant pays the power bill, but I have the added hours on my HVAC unit. Negotiating petty squabbles among tenants and between roommates.  Late fee negotiation (Them: "But I mailed it on the last day for a timely payment. Under the mailbox rule, that counts."  Me: No, the mailbox rule deals with offer and acceptance of contracts, not late fees. If I don't have the money, you are late.")  Rules negotiations. In fact, negotiations over things that are clearly not negotiable is my biggest headache, because it eats up the most time.  For rural properties, it's the septic tank and failure to take care of it.

I'm developing a class on dealing with difficult tenants.  What are the most common tenant problems you encounter?  I need some examples for the class (beyond my own bad experiences) but I'm sure everyone will share advice if you share your stories.  No tenant names, please!

@Deborah Tuck, Many properties are redeemed. The trick is to make redemption so expensive that you almost don't care if they redeem. You either make a quick profit of several tens of thousands of dollars and use it to fund other deals, or you get to keep the property and make much larger profits over many years.

The value of the preservation improvements is the current value of the property after you've done your fix up/clean up, minus the value before you started.  Usually a real estate agent can do a BPO (Broker Price Opinion) for you.  If you had a structurally sound home in a modest part of Birmingham, and it needed yard work, exterior paint, windows resealed, new carpet, new plumbing fixtures, water heater and heat pump, it might be worth $65,000 to $75,000.  You could spend $15,000 to $20,000 on it, and increase the value to $145,000. If the owner redeems, they pay the $80,000 increase in value, not the $20,000 cost of preservation improvements.  Most owners won't be able to afford that.  You'll be able to keep the property.

The trick is to change the order in which people normally do preservation improvements. Typically, people start at the top--the roof--and work their way down. That's the most efficient method.  For tax sale properties in Alabama, you want to start with the fastest and least expensive fixes that add the most value.  Usually that will be yard work, flooring and paint.  The reason you do this is because you want to hurry up and increase value as much as possible before the former owner attempts to redeem.  Once they offer to redeem, your preservation improvements after that point are not recoverable.