All Forum Posts by: Denise Evans

Each county has the excess funds generated from tax sales of property within the county. It can be claimed for up to 10 years after the auction. After that it is forfeited to the county.

Yes, you are.

You do not need written notice and a 6-month delay if you have a tax deed. Aside from that, there are other tactical reasons to wait until you have a tax deed before filing ejectment.  No particular language in notice, if you send one.  Anything that advises of the tax sale, the investor's name and contact information, and demands (NOT "requests") the person surrender possession to the investor. A different notice goes to lienholders. It does not need the demand for possession. It MUST be sent by CMRRR.

No, boundary line dispute means a dispute about the true location of the boundary line between two separate parcels.

You should be worried about the Rioprop v. BBVA Compass Bank decision. Same Short Statute of limitations, different context.  If tax sale investor fails to take exclusive and continuous possession of the property within 3 years after the tax deed date, the former owner can file a lawsuit, cancel out the tax sale, get their property back, and pay the  investor nothing at all. The investor does not need to possess for three years, it just needs to GAIN possession within that 3-year period. That means lawful and peaceable possession. So, if you take DIY possession but the property was not legally abandoned (owner departed and has no intention of ever returning or ever doing anything with the property) then DIY possession was not lawful and does not count. And yes, if the owner died they certainly are not coming back, but title must be in someone at all times. So, title automatically devolved to heirs, even if nobody knows the identity of those particular people.  If owner died, then heirs have no intention of ever doing anything with the property. That's a hard thing to prove when you are in court. That is why ejectment lawsuits are always best.

Under the legal concept of "tacking," the possession of each owner is tacked onto the possession of prior owners for purposes of determining the relevant time period.

In Alabama:

Adverse Possession (pure squatters) takes 20 years of possession.

Statute of limitations of 10 years requires color of title (a deed, a will, some reason to believe you own the property) plus possession or payment of taxes for ten years.  Boundary line disputes usually fall into this category. Also missing deeds in a chain of title.

Short statute of limitations is after a tax sale and requires a tax deed, possession, and the passage of three years. That is for things like "curing" a void tax sale. The law regarding burning off judicial redemption rights is currently in flux due to some complicated reasons, but historically most judges have thought it took three years of possession post-tax deed to burn off judicial redemption rights, also.

1. How do I identify short sales to go after? I don't have a formula or a plan. I look over the opportunities and evaluate. Every deal is different.

2. Redemptions--rarely does a borrower redeem. More often, not very common, is someone who purchases the borrower's rights and redeems. Often, the numbers don't work for that strategy because there are other liens against the property that are reinstated if there is a redemption.

Sadly, it is not uncommon for someone to buy the borrower's redemption rights, threaten to redeem, and then extort money from the current owner to just go away. That is why it is important to know what the redemption charges are, which includes the amount by which the property value has been increased due to the current owner's post-foreclosure permanent improvements and/or repairs.  Investors should always take immediate steps to make it too expensive to redeem.  There are other strategies to make it too expensive to redeem, or if someone DOES redeem, the investor does not care because it is making a killing in profits.

I'm sure there are some industry statistics somewhere. There are several government agencies that track residential lending and foreclosures.

Not C or lower. I just saw a foreclosure deed recorded a few days ago for a house appraised at $1.2M and the credit bid price was slightly north of $800,000. In Tuscaloosa, Alabama, that is a two-income professionals (doctor and lawyer) house or business owner.  Many people are foreclosed upon and can afford significant rent, but the loan was accelerated and they could not refinance.  Or, their COVID forbearance expired and the missed payments were capitalized and now they cannot afford the larger payments. Or their many reasons. Each situation must be evaluated on it own. Personally, I prefer to identify pre-foreclosure properties and negotiate short sales.  During the last crash I typically obtained short sale approval at 20% to 25% less than true then-market value. Plus the owner doesn't care if you have earnest money or not. Plus they will spill their guts about everything wrong, and you can use that info to drive down the lender's appraisal.  Plus the process generally takes 60 to 90 days, so plenty of time to round up investors if you need them. Plus no competition, such as you encounter at a foreclosure auction.

 I do not understand the advice from Cloud Willis that only the original owner can buy back their property. There is a list of parties entitled to redeem, including spouse, guarantor, lienholders, etc.  In addition, an Alabama Supreme Court case ruled that the statutory right of redemption is a personal right, not a real estate interest, and is transferred via an assignment, not a quitclaim deed.

One cannot sell redemption rights before the foreclosure because they do not come into existence until after the foreclosure.

You cannot back date a bankruptcy. Before the 2005 amendments to the bankruptcy code, a bankruptcy filing would allow a borrower to reverse a foreclosure that had already occurred, but that is no longer possible.

Foreclosure investing is very profitable and relatively safe in Alabama. You just need to  know what you are doing.