All Forum Posts by: David Krulac

@Chris K.  Are you doing real estate law in Nashville, now?

@Matt Lord there is no "right of redemption" for PA Tax Sales.  OTOH, we have been involved in mny Quiet Title Action Lawsuits, not the most pleasant ting to do.  At the extreme we had one QTA that took 9 years and $45,000 in attorney fee and hadn't gone to court yet.

David Krulac Bigger Pockets Podcast #82

Besides the $50 house which was all brick, and had new electric service and a new roof, referrenced earlier. But the house needed everything else and I sold as-is for $1,000.

I also bought another house for $1,800.  AFTER I bought it a driver ran his car into the house, literally, the car was inside the first floor of the house.  It happened on a Friday night at 2AM and might have involved other substances.  I didn't find out about the accident for 2 weeks.  There was structural damage not only to the hit zone but also on 2 other sides of the house, which was made of concrete block.  After getting the police report, I filed a claim with the driver's auto insurance and got a claim paid for $20,000.  I had an appraisal done and the property was appraised at $44,000 and I donated the house as is to a college and got a tax deduction of $24,000.   

I've purchased several hundred tax sale properties and have written about them here on Bigger Pockets.  I don't think you need a course, imho.  Its easy and self explanatory to do.  But more importantly, most of the properties sold at Tax Sale, do not have any overages.  At Upset Tax Sales all the liens, mortgages, judgements etc, transfer to the high bidder at the sale.  So for there to be any overage, there has to be essentially no mortgage, or any other lien on the property before the Upset Tax Sale.  Most of the properties sold do have liens, or some other negative feature like wetlands, flood zone, failed perk test, toxic waste or landlocked situation.  At one sale that I went to there were something like 300 properties on the sale list the day of the auction.  Exactly 4 had overages.  A couple of the overages were minor, and If I were the high bidder, I would have negotiated away the overage in exchange for a Quit Claim Deed to clear the title.  I've actually bought property where there was nursing home leins, welfare department liens, inheritance tax liens and Federal Tax Liens, which were either not of record (not recorded) or were recorded someplace different like the Federal Courthouse.  One of the properties had a Federal Tax Lien of $2,000,000 and another $4,000,000. In all of those there were no overages, which was the least of my concerns.

Check out my other BP Posts on Tax Sales.

David Krulac

Bigger Pockets Podcast #82 Guest

@Roy N.  Thanks for the insight.

@Yehoshua S.   I've posted over 3,000 time on BP, many were on Tax Sales.  Its a complicated subject, with many nuances, twists and turns.  Each state has different rules and even within a state there are differences among the counties.  Some counties will not accept cash, personal checks or business checks, for example.  Other rules prohibit any bidder being allowed to bid is they owe deliquent real estate taxes, muncipal liens for water, sewer and  trash or even any state business taxes.  Contact the county where you want to bid, check out there website and call the staff for other questions that you may have.  I have personally bought hundreds of properties at tax sale and have instructed others on the subject.  One of my classes is 8 hours long.

David Krulac, Bigger Pockets Podcast #82 guest   

We just settled one where the buyer has a second for over 10% of the purchase price and the combined first and second are over 100% of the purchase price.  Their state lender requires them to stay 10 years and the second will be forgiven.  If they sell or rent the property then the second mortgage is not forgiven.  These programs are designed by government agencies to encourage home buying and help renter become owners.  In general the writers of these rules and regulations do not like investors, only owner occupied home owners.  So if you have a reduced interest rate or some form of loan forgiveness, be aware that there may be rules that conter balance the benefits.

David Krulac

Bigger Pockets Podcast #82 Guest  

@Kevin Maher  My experience has been a little different that yours.  I've been renting properties for decades, long before 2008.

1. In the period from 2008 to 2013 we never lowered rents not even once.

2.  In the period from 2008 to 2013 we never had extended vacancy and always had high demand for rentals.  Several times there was no ad, no sign and people would stop because there was a bunch of trash on the curb.  They would ask, are you going to be renting this place?

3.  In that period from 2008 to 2013, there was less demand for BUYING real estate, but MORE demand for renting property.  The less demand caused less competition, very few over asking price offers, and more foreclosures and defaults.  Some were horific, one development built circa 2004 has town houses selling as high as  $225,000 or so.  At the lowest part of the recession prices dipped below $100,000 briefly.  Some people lost their homes, but other continued paying the mortgages even though they were underwater.  And there were good reasons for them to act in that manner. 

4. In that period from 2008 to 2013, we never lost a tenant because they bought a house, and didn't want to be a renter any more.

5. We didn't buy any TH in the development above.  There was other properties that we did buy and got good value for property.  One property we bought in 2014 had previously sold for $96,000, we paid $34,000, rented it to one tenant for 7 years, when they moved out (to another rental) we sold the property for $149,900.  Another house we bought in 2013 had previously sold for $200,000, we paid $119,000, rented it for 5 years, tenant moved out and we sold for $210,000.

6.  During that period from 2008 to 2013, for the most part the tenants that we dealt with did NOT want to move.  In general that meant that the tenant behaved and we actually had very few evictions.  When tenants are not wanting to move its a good time to be renting properties.  Recession means more renters, and you get to chose from a larger renter pool, making for better tenants staying longer.  During that period we had some very long term tenants, some more than 30 years!

David Krulac

Bigger Pockets #82 Guest

I've owned rental condos, owned one for over 20 years, easy to rent, good building and grounds maintenance, good amenities like swimming pool and tennis courts. I've also developed a new condo development of townhouses, and coverted a building built in 1902 into condos. There are things you need to check before buying like what are the condo fees, what are the percentage of renters (factor in FHA funding for future sales), pending additional fee for deferred work, what is included in the condo fee and what is their record of condo fee increases? what are their restrictions, some don't allow renting, size or number of pets, etc, among other questions.

David Krulac

Bigger Pockets Podcast #82

You do what you want to do.  We are always a buyer.  We bought property in 1981.  We bought property in 2008. For the last 35 years we have averaged buying more than 1 property every month.  We don't care if interst rates are low, high, stable or fluctuating.  We don't care if if a buyer's market or a seller's market.  We are ALWAYS buying.  Don't wait to buy real estate; buy real estate and wait.

David Krulac

Bigger Pockets Podcast #82 Guest