All Forum Posts by: Fred Engh

You can find higher cap rates on MH (double digits) without a problem.

I don't know about guesstimating cap ex. I think it'd be more case-by-base.

I would be more inclined to estimate the cap ex from the initial purchase. As for ongoing monthly capex maybe north of 5% to 7% if you want to make a conservative estimate. 

Many people use 5% for multi-family. I saw 1 older house in NY that the realtor was offering the deal and assumed 3% capex (I questioned her on such a low number for an older home). The age of the multi-plex would probably correlated to your capex monthly estimate (a newer multiplex would assumingly have less expected repairs). 

I'm in Omak if you have ever considered this area for your expanded search, I'm always looking to network.

@Jay Hinrichs I read up on the Joe Kaiser business model. It was an interesting read (I'm always game to learn more). I think he ran afoul of the law by promising to save houses. What he was really doing was essentially a payday loan against the foreclosure overage (that's not what I'm aiming to do). It's akin to the Oasis Financing (they advance money for slamdunk lawsuits at exorbitant interest rates).

It sounds like the RCW 62.29.350 Finders Fee's law was made specifically because of him.

My goal is to find leads from back taxes and close a deal with an owner, no promise of a foreclosure bailout. I just want to buy before the county forecloses. At the end of June they hit owners with an $800 fee and then do the auction in December (there were about 2 dozen properties, no houses at the last auction). 

People receive the overage I believe without having to do any paperwork. The county (here at least) send them a notification of the sales amount (then they deduct the back taxes, interest, late fees and the $800 foreclosure fee). 

I can't speak on Missouri law, but in Washington it's not a lifetime without the possibility of title insurance. There is a 3 year right of redemption for errors on tax foreclosures. Basically, if the county made an error in serving the owner the title company would be responsible and they don't want the liability. So, I don't think it'd necessarily be a lifetime.

I looked into the process in WA after I bought some tax foreclosure property. Doing the work myself, it was under $1,500 for filings and newspaper notices (I think you can use cheaper publications instead of the biggest paper in town). I'm not sure how much a lawyer would charge to clear the cloud. 

I found this helpful:

A cloud on a title in real estate vocabulary can be interpreted into the Latin phrase, caveat emptor. It cautions that even though the deed has been documented, a purchaser should proceed with caution because there is something unusual about the deed that calls for closer scrutiny. Oftentimes, the existence of a cloud on a title will permit the buyer the option to back out of a contract and often the cloud can be deleted easily by executing a document to show a debt had been paid or corrected.

Although there are different conditions, a title with a cloud is regarded as a title with a flaw. A cloud can indicate the misspelling of a property's address in a deed conveying title or it can mean the repayment but failure to officially document a mortgage lien. It can also indicate a failure to convey certain property rights (such as mineral rights) to the former owner of a property or some other questionable link in the succession of title.

While title companies will occasionally insure ownership of a property surrounding a cloud, they will refuse to insure any title to be transferred with a "cloud." The owner of the property can easily remove the cloud on the title by initiating a quitclaim deed or via a quiet title proceeding. This calls for a document that proves the debt or error associated with the title has either been paid or corrected.

In most cases, the concerns surrounding a cloud on a title are minor and very easily corrected. When property is acquired via a mortgage, occasionally clouds on title can be a little more complex. The mortgage company is required to inform the local record office of satisfied liens when the mortgage has been paid in full.

Buy! Buy! Buy!

With only 2% estimated at expenses, I'd be curious what comprised your $66.5k improvement budget. 

A 3% rent increase every year?

@NedCarey LOL for suggesting to remove the picture instead of cleaning up the rear yard. That is quite the creative solution. 

I agree with raising the price and doing owner financing. 

I think you did a nice job on the rehab. Minor critique (and I mean minor), I didn't like the dark ceiling fan with all of the other white ones. 

I liked the shelving in the laundry area (most buyers would appreciate that).

I personally would stain the fence (you have 2 different colors), pull all of the garbage cans/yard debris containers and take a new picture.  I'm not sure if that's feasible in January.

Maybe Jay Hinrichs will chime in on this one. 

I remember him saying he's had experience with title companies not wanting to pay on valid claims and he's had to push the issue, but eventually got paid. 

Of course the title company would suggest foreclosure, it alleviates any payment from them.

Warning signs for credit repair scams include companies that ask you to pay before providing services. The company may claim that it can guarantee a specific increase in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.

*Pressures you to pay up-front fees.

*Promises to remove negative information from your credit report.

*Promises to remove negative information from your credit report.

*Tells you to not contact credit reporting companies.

First thing to do: contact the credit reporting bureaus and dispute anything you think could be off. They have 30 days to respond (more than likely they will), but if they don't respond it comes off (don't hold your breath, but it will happen). 

Pay off lowest items on your credit.

I personally would not use a company. 

How much do you owe? If you can't see daylight, consider BK. 

If you're trying to rebuild, start researching secured credit cards. I think Capital One Mastercard is one (there are others). 

I'd save the money on a credit repair company and put that money towards paying a debt off. 

You can do most of the work yourself. 

I contacted the Okanogan County Treasurer's Office (Washington State) and asked how I would be able to obtain a list of parcels/owners that were 3 years behind on their taxes. I figure if they're not paying their taxes then there's a good chance they will want to sell. There are public disclosure laws that allow for these documents (Washington has extensive public disclosure laws allowing for open and free access of public documents). They said yes (have to fill out a request), but this is what she said:

ATTENTION: RCW 63.29.350 - AMENDED 2010 "FINDERS FEE'S".

"Protects the pocketbooks of families who have lost their homes due to an inability to pay their property taxes. The NEW LAW, regulates firms and individuals who contact owners of foreclosed properties offering to obtain money remaining after the auction on their behalf. The bill places a 5% cap on such finders's fees, the same amount allowed for other kinds of unclaimed funds." Any person violating this sections is guilty of a misdemeanor and shall be fined not less than the amount of the fee or charge he has sought or received or contracted for, and not more than ten times such amount, or imprisioned for not more than 30 days or both.

RCW 42.56.070(9)

Requests for Public Information Limitation on Use for Commerical Purposes

Washington State law, RCW 42.56.070(9), prohibits the use of lists of individuals for commercial purposes. "Commercial purposes" means that the person requesting the record intends the list will be used to communicate with the individuals named in the record for the purpose of facilitating profit-expecting activity.

Ok, I'm not going for finder's fees so I don't think that section is applicable.

Could anyone shed some light on the second section? If I contact an owner from this list with the intent to buy their house and then sell their house, am I breaking the law?

Is the transaction once removed, meaning I personally want to buy the house (I'm not making money off of the purchase of the house, but the remodeling done). Could they seriously prosecute me for this? Has anyone heard of this?

Biggerpockets.com/guides has a guide for screening tenants. @Brandon Turner tells a story about a young couple who had a puppy they failed to mention on the application. This is the information you're trying to glean from social media. 

Tenant Screening: The Ultimate Guide

@Mindy Jensen I wouldn't over rely on someone who drank in a FB picture. I'd be more concerned about employment than if they drink (yes, who wouldn't turn down a librarian baker posting recipes?). Someone not wanting their landlord to follow them on social media does not mean they necessarily have something to hide, it could also mean they value their privacy and want some boundaries. 

Brandon Turn wrote:

Tenant Screening: The Ultimate Guide

In it, he discusses the use of social media in screening tenants. 

It can be found here:

https://www.biggerpockets.com/guides

About 3 guides down.

He tells a story about a new couple applying and discovering they had a new puppy they lied about on their application. This is what you are trying to gleam: useful nuggets of pertinent details that have a major influence on your decision. 

If someone has a drink in their hand, they must be a drunk? Stable income is more important than if they drink.  @Mindy Jensen  If they don't want to be followed by their potential landlord on social media it must mean they have something to hide? Or, they want some privacy and boundaries.