All Forum Posts by: David Krulac

@Jacob Thorpe  I did NOT say that I bought all those, only that I saw those properties offered for sale at Tax Sales that I attended. Many if not most of them WERE bought at Tax Sale.  Here's another one:  Went to a Tax Sale where there was a "vacant" lot for sale of about 1 acre in a desirable suburban area.  Unlike some buyers, I ALWAYS go look at the properties before the sale and discovered that the vacant lot had an active railroad track on it and therefore was unbuildable, and would remain unbuildable until the railroad removed their track.  At the sale, some people, who it must be presumed did not look at the property and there were several bidders.  There was a news reporter at the sale and they interviewed the high bidder, who admitted that they had not seen the property, but were certain that they would be building their family home there.  At another sale, a farm house was to be sold.  A few days before the sale the frame farm house was burnt to the ground and all that was left was the standing brick chimney and a lage pile of ashes.  Multiple people bid on that property as well.  At yet another sale there was a brick row house/town house for sale that looked good from the street, but since it was in the middle of the row, to see the back of the house, you had to walk around the block and see the house from the alley, where the entire 3 story brick back wall of the house was laying in the back yard, and there was no back wall standing.  Somebody bought that house at Tax Sale.   

@Andre Brock  Since that first purchase, the first 11 properties I bought were  all 100% financed as I had no money.  And subsequently I bought and sold over 1,000 properties for my own inventory, and the last 100+ properties  were bought 100% cash.

I've bought hundreds of properties at Tax Sale, but only Tax Deed Sales, and have posted on the subject many times on BP. It is the Most Hazardous way to buy real estate and not quite as easy as you state.  In the Bigger Pockets free book, "Real Estate Rewind", as one of the 11 co-authors I wrote about one such Tax Sale purchase and made money but not enough money to warrant the risk involved. Some of the properties that I have seen on Tax Sale include:

1. An expired land lease

2. Army bombing range

3. Land at bottom of man made lake (literally underwater)

4. Delapidated building not worth the cost of demolition.

5. Toxic waste site on Super Fund List  

6. Former gas station with leaking under ground storgage tanks

7. woodland with all the trees clear cut

8. Landlocked property

9. former Chromium factory

10.Multiple properties with multi-million Federal Tax Liens

11. Wetlands, flood plains, endangered specices, historic sites, architectural significant property

12. Failed septic tested properties

13. Condemnation properties

14. Zoning violations properties

15. sliver of land 2 feet wide

16. unusable/unbuildable land

17. junk yard salvage property

18. Title problem properties

19. Many properties are abandoned by the current owners because of some problem

David Krulac

Bigger Pockets Podcast #82

In Bigger Pockets Podcast #82, I talked about my first purchase.  Bought it at an auction, property was owned by the statem paid $27,000.  Didn't pay rent or mortgage for 6 months, and then 100% financed.  first moved in and house hacked bedrooms, then rented the whole house and moved out. Eventially sold for $99,999.  House was 17 years old all brick rnach house with Andersen windows, solid hardwood floors, gas heat, ceramic tile baths and a new 6 month old roof. 

This year we had a heat pump cleaning, testing refrigerant charge (didn't need any added) and a capacitor replacement, bill was $157.05, factor I consider are the age of the existing unit, if it needed a charge, potential leak, cost of refrigerant (over the years there have been many varients of the type of refrigerant).  There is always the risk that after you do the repair, the the system fails quickly after that.  We have had systems fail and need replacement as soon as 10-12 years, and others lasting 30 or more years. 

@Mary Jay

As a preventive move would be for you to trim any branches that hang over the property line onto your property.  This might lighten the weight of the tree toward your property;  so this might help or not.  One of my friends had a house where the neighbors tree had a huge branch that crossed the property line and was actually overhanging and touching his roof. 

@Mark Dutton  When i started, I had nothing.  Nine month into my low paying job in a new city, I had no savings. If I didn't borrow, I would not have been able to buy any property.  The first 11 properties that I bought were all 100% financed, in one way or another, because I didn't any money. The first mortgage that I got was 30 years fixed at 9% interest.  My philosophy at the beginning was to borrow as much as I can for as long as I can.  Years later I had 50 mortgages at one time, and it seemed like all I was doing was writing check to mortgage banks and lenders.  It also seemed like I was working for the banks, as that was my biggest expense every month. In 2007, I decided to stop working for the banks.  I sold some properties, paid off those mortgages and took all the excess proceeds and applied it to other mortgages. I also make extra payments on existing mortgages.  And unlike the first 11 properties, the next 100 properties that I bought were all zero financed and 100% cash, no mortgages.  I got down to 2 mortgages from 50, sold one and ws cruising along with a 2.875% interest mortgage that I had refinnced in 2013.  Due to the low interst rates, I wasn't planning on paying off that mortgage, but in 2021 deided to sell the property for 3.6 times what I paid for it and take advantage of the price run up and market condtions.  vwen though I thought I might not get any more mortgages, the low interst rates were too tempting, so I got  bunch of sub 3% mortgages.  I wish I had gotten more!  Oh, how nice it would have been to refi everything at sub 3%. The point is things an times change, the market chnages and your investing career changes.  Be flexible, adjust to the times, and use financing judiciously to advance your investment goals.

David Krulac

Bigger Pockets Podcast #82 

@Dee Mandrekar for Denton County Texas, according to the HUD website "HUDuser.org"

the Median rent for a 4 bedroom house/apt/condo could be $3,980 if it is in zip code 75001.

Here's the total list for Denton:

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2025_code...

@Jay Hinrichs

One friend of mine went down to Florida, in the Naples area about 2010 and bought ten rental properties, subsequently when they doubles in value he sold them.  

Another friend bought a condo in Port St. Lucy about the same time for about $40,000, that previously had sold for $200,000.  He rented the place to tenants that formerly owned a condo in the same subdivision and had lost their home in foreclosure.  They paid their rent until another foreclosure became a rental down the street and the rent was cheaper.  My friended up lowering his rent so the tenants would move, maybe an idle threat, maybe not. 

A third friend of mine was looking on the web and saw some "deals" in Cape Coral.  He wanted me to travel with him and buy some of these deals.  We had a history and had partnered on over 200 deals so far.  I declined the vacation/deal trip.  He went down and got showings for a bunch of houses in Cape Coral with attractive prices, but came back empty handed.  When I asked why he would pass up such lucrative deals, he explained.  The best house he looked at was itself was in good condition, but the house next door which wasn't shown in the web photos was boarded up and looked like it had been vacant for years.  He said there were 10 houses on the street and 3 were boarded up and abandoned, and that was a typical street that he had toured, throughout Cape Coral.

@Jay Hinrichs  amen, Brother.  We bought 117 lots in one development, where the developer was shot and killed while in bed with the foreman's wife.  The company went into Bankruptcy and the BK judge ordered that the majority of the lots (about 3,800) including ones already sold and many built on; be organized into one brand new municipality.  Taking the lots which were parts of three other municipalities and uniting them into one new "town".  We bought lots as low as $50 and sold as high as $80,000. Most did not have those kinds of spreads.  From 2000 to 2008 lot prices quadrupled, what a great time to be a seller.  Then from 2008 to 2015 lot prices dropped around 50% to 60% sometimes more.  There had been many new subdivisions created before 2008 and the overhang of new lots not sold reached out for many years.  With the economic drop, and oversupply lot prices had nowhere to go but down. Fast forward to today after the recent past escalation is real estate prices; over the last 6 months 21 lots have been sold 0for between $5,000 and $25,000.  So much for prices ALWAYS rising.