All Forum Posts by: Account Closed

Thanks for asking, Dee Dee. The mortgage company even stopped sending out the property preservation company and did not pay the property taxes. So, this fall, the property came up on the tax lien sale. I ended up purchasing a tax lien on the property for $2,600. At this point, I anticipate that neither the owner or the mortgage holder will pay off the tax lien and that I will get the deed in approximately a year. 

Our renters next door are keeping an informal eye on the property and the property is secure. So now, it is just a waiting game until we can file the necessary legal paperwork to obtain legal title to the property. In Indiana, that occurs 1 year after the tax sale.

Hey Bob -

I live and invest in Muncie. I may be interested in an 8 unit lot -- depending upon where it is located. Feel free to shoot me an email with the details if it isn't too much trouble.

Thanks!

I have been to 3 of the Delaware County tax lien auctions, but I have never purchased a lien. I would say that Greg's estimate for Elkhart County is about the same for Delaware County. There is a mix of some out of town hot shots with bags of money representing institutional investors. And there is one particularly well-known brother tandem that purchases lot of liens in Delaware County. From what I hear, financially they have been very successful (and have outbid me on more than several times on properties).

I will be there again this year, but I have not really had the time to do all of my due diligence. So, my list of prospective properties will be quite small (as well as my budget).

They start out the auction by having bidders call out if they are interested in just one or two properties and get those out of the way. That reduces the crowd by at least half. Then, they systematically go through the list, page by page. If you are interested in a property, you call out the sale number and they will start the bidding. It usually lasts until the early afternoon. And you are required to pay the lien amount by the close of business that day. So make certain you have the accepted form of payment. That can probably be found on the SRI website. 

Good luck!

I believe in Indiana, you have to give notice to all known parties who have an interest in the property. If there is a mortgage recorded, then I think you are required to give them notice that you purchased a property tax lien on the property. 

If you do purchase a tax lien, I suggest that you hire an attorney who specializes in this area of the law. In Delaware County, where I am from, there is one "go to" attorney who really knows how to handle these matters. Other attorneys may do it, but it is the bread and butter of his practice. 

Our tax lien sale comes up in about a week and I am hopeful that I will be able to purchase at least one lien this year.

Also, the company SRI handles Delaware County's auction (it looks like they don't do Allen County, though). SRI has some useful documents under their documents and links portion. You may want to download these and read them. Almost all of the information should be applicable to Allen County as well.

http://www.sri-taxsale.com/County/BARTHOLOMEW

Good luck!

The property on Rosewood is probably cheaper because of its location (coupled with its condition). There are a couple of run down buildings and a not-so-nice apartment building just south of that house (and a liquor store at the intersection between Wheeling and Rosewood -- not horrible by any means; but you just don't get a "neighborhood vibe" right there. A half block east of Rosewood, it does feel like and is a residential neighborhood).

I personally live in Halteman Village -- which is just west of that property. Generally speaking, the north side is better. However, there are always exceptions. We have 3 rentals, all on the south side of town. And all of them are in perfectly fine neighborhoods. However, that is not universally the case on the south side.

Farmington is a really nice addition. It is right on the border of Delta and Muncie school districts and has a suburban vibe.

I have lived in Muncie for the last 11 years and I invest here as well. If I can be of any assistance, feel free to email me and I will give you my phone number and we can talk.

I am also impressed that you got the rehab done for $65K.

I will add to the chorus. Great job! Though I am no expert on Indianapolis, the Bate-Hendricks neighborhood seems to have quit a bit going for it, given its proximity to downtown and Lilly. 

No problem, Jake. And if your mentor is wanting to unload those houses (and you are not interested), I would certainly take a look. However, since we have pretty shallow pockets at this point, we are very particular as to what we buy and at what price we purchase.

Probably because I know it better and I am more comfortable in Muncie. I feel like I know where to invest and where to stay away from. 

Additionally, Muncie has turned much more into a service economy than a manufacturing economy (though Muncie still has Magna, Progress Rail, Maxon, Keihn,Spartech and a number of other manufacturing facilities. Where the manufacturing in Muncie used to be almost exclusively tied to the automobile industry and, to a lesser degree, home canning, manufacturing is more diversified now.). Muncie has Ball State, which is either the third or fourth largest university in Indiana. The hospital is really the only major health care facility in East Central Indiana. Sallie Mae has a loan servicing facility in Muncie as well. So, I like the diversity of the Muncie economy. That is not to say that everything is a bed of roses in Muncie -- far from it. 

When I think back on 2008, Kokomo suffered to a much greater degree than Muncie. By 2008, most of Muncie's automobile manufacturing (GM/Allison Transmission and Borg Warner, in particular) had already either shut down or was on the verge of shutting down. As the auto industry has come back, so has Kokomo. But as an investor, I would rather be in a community where the economy is not relying on one single engine as a driver. I would rather have lots of little, independent engines. And I am more comfortable relying on Ball State as an economic anchor than I am relying on Chrysler as an economic anchor, going forward. Plus, I think with the university here, we have more cultural amenities than exists in Kokomo. 

But when it comes down to it, it may just be my bias. Muncie, for better or worse, is my adopted home town at this point. It is not shangri-la (nor will it ever be). But because of low cost of living (we moved from Chicago), we are able to afford a very nice 4 br, 2 1/5 ba home in a great, safe neighborhood, living on one very moderate income. One of my kids gets violin lessons from a professional violinst associated with the university. My other child gets coached by high level soccer coaches associated with the university. In a larger community, we could not afford these sorts of opportunities for our children. I get home from work at a reasonable hour. I can sit out on my front porch with my wife and enjoy a nice glass of wine at the end of the day and after we put the kids to bed. Though it sounds awfully strange, our quality of life is much higher in Muncie than it ever was in Chicago. Chicago is great. But it took all of our income and time to make a living there. By the end of the week, we were too exhausted and too stretched for cash to enjoy the wonderful amenities Chicago had to offer. For all its faults, moving to Muncie has been the best decision we have ever made.

As you can tell from my profile, I live, work and invest in Muncie. I now have 3 rental properties in Muncie, having just completed a rehab on our 3rd and the selected tenant signed a year lease today. 

I agree with some of the sentiments expressed above concerning Muncie. However, with Indiana's property tax caps, property taxes on single family homes is quite reasonable. State law limits the property tax on rental property to 2% of the assessed value, annually. So that really is not a big expense for our properties. Before the tax caps, property taxes were, in my opinion, quite high. Contributing to that plight has been a declining tax base (due to industry -- GM, Borg Warner, for example) closing shop, growth in the non-profit sector (Ball State, IU Ball Health Hospital, Youth Opportunity Center), and the fact that half of this freakin' county is located in a TIF district. So, all of those property taxes from TIF districts go into a special fund and not to the general coffers of the county/city.

I will not contest that Muncie faces serious challenges. I have lived here for 11 years and we have not seen any meaningful appreciation since we purchased our own home. And we are not counting on appreciation for any of our rentals (however, we have fixed each of them up to the point where we have significantly increased their value). And Muncie has lost much of its manufacturing base. However, there is increasing investment in providing amenities for residents -- new sidewalks, new parks, an arts initiative downtown, and a downtown hotel being built to serve the convention center. Nobody will confuse Muncie with Fishers, Noblesville or even Pendleton. However, I would much rather be in this market than I would be in similar markets like Marion, Kokomo, Anderson, or New Castle. That being said, there are neighborhoods where I asolutely would not buy a house in Muncie (industry south/central, the old west end, and whitely come to mind). However, there are not areas in Muncie where it is perfectly fine to invest in, Unless you know the area where your are purchasing the property, you can easily get burned buying what seems like cheap houses in Muncie. In fact, we picked up our first rental from a former out-of-state former owner (it was a foreclosure when we purchased it).

If I or the other posters have not scared you away from investing in Muncie, I would be happy to give you my (unexpert) opinion of the properties in question by doing a drive by. I would be happy to tell you whether I would personally invest in the properties and that particular neighborhood. It is kind of what I do for fun anyway. Just send me a personal message with the details of the properties. 

One additional thought. Our first two properties are located in what I would categorize as a Class C area -- mix or working class owners and rentals; homes built primarily in the 1940s; most 2 br but some 3 br. Some houses fixed up and others where I would not let my dog live in. Our strategy has been to fix up our rentals to the level where we would like them if they were our own residence. So, we have put in stainless steel appliances, tile backsplashes, new cabinets and bathrooms, along with new Allure floors. They look really good and it cuts down on maintenance and repairs. Then, we price them slightly below market. Consequently, we get a flood of high quality applicants. We probably average 20 inquiries within the first 24 hours of posting. Then, we can be very selective as to who we choose. So, we have only had minor repairs to any of our properties. And, to date, we have not had a month where we have been unoccupied. This last house, we listed it last Wednesday at 10 pm, showed it all day Sunday, and have a signed year's lease today. And we have dozens and dozens of new inquiries and requests from qualified potential tenants to keep them on our list should any of our other properties open up. I guess my point is that you can get good tenants who respect your properties in Class C neighborhoods. You just have to be picky as to who you rent to. I would rather give up a couple month's worth of rent in order to secure the right tenant. So far, we have not had to do that. But we put too much time and money into our properties to see them destroyed by a crappy tenant.

Good luck!