All Forum Posts by: James Lloyd

From my complete novice perspective (I thought I was interested in it and went to a few, and I didn't bid on anything... just observed):

1) There are some decent databases for NJ tax liens... they list when each municipality has their auction and which properties have a lien for sale.  The properties actually at auction will be less because people pay off their taxes last minute.  I used taxsaleresources because it offered a month to month subscription option that was pretty cheap at the time.

http://www.njtaxlieninvestor.com/taxlien101.asp

http://www.taxsaleresources.com/

2) At least in Morris County and Union County (where I went/looked at), there are definitely "professionals" that are bidding on the liens.  They had their numbers down cold with spreadsheets or computers in front of them.  I wouldn't be surprised if they were bidding on behalf of big money investors (hedge funds, brokerage houses, etc.).  

3) You better have some serious money in the bank.  Not only do you have to have the money to pay the tax bill the day of, but more often then not, you will have to pay a premium for the lien too (as opposed to you getting an interest rate), which you also have to pay the day of.

4) Making this number up, but from what I saw, 90% of the properties will get bid up to a premium (or 0% interest) and the 10% that get an interest rate, probably 5% of those properties are duds (properties you would never want to own if you actually foreclosed on it).  The game is to hope that the taxpayer does not pay off the next quarter tax bill, and you get priority to pay it off and receive 18% interest on the next one... but again, you have to have the money in the bank to pay off each property tax bill thereafter or lose priority.

My advice is that if you are interested in tax liens is to visit a couple of tax lien sales (if you don't want to pay for a database access, then you can always go to each municipalities webpage and see if they list the info there), and see how they operate.  Maybe you'll get excited and decide to keep with it.  After going a few times, I decided it wasn't for me.  

If you're looking for reading material, Michael Pelligrino, Esq. wrote a book on NJ Tax sales.  Its a bit dated, but not much has changed since it was published.  I've seen Michael speak and he definitely knows his stuff on the topic.

Tax sale resources has a fairly decent database (it is comprehensive, but the user interface is a little off) of real estate tax delinquencies.  It just links to the municipal page and lists the sale date, but its helpful because there are so many municipalities in NJ and they each have their own tax sale.  It is pay to play, but its fairly cheap for the base package if I remember correctly.

If you don't want to pay, then go to each municipalities tax assessor's site to see if they will be having a sale soon.  They should put out a list of properties that will be at that at that auction.  

On a lark I tried, going to a couple of the municipal sales, and well at least in North Jersey, it is extremely competitive because of institutional money.  Maybe South Jersey will have more opportunity for you.

I've assisted Sellers (estates) in selling houses with failed septic systems that needed replacement.  @George W. is right about the municipal health departments being in charge of septics.  You also may need to go in front of the local planning board if you plan on replacing the cesspool with a septic.  On one estate, we had to go in front of the planning board because we were increasing the capacity of the failed septic from 2 bath to 3.  The local health department may be able to answer your question on that.

I have not heard of someone installing the septic themselves.  I would be very hesitant to attempt it (maybe watch the installer do his work and then the next time flip try it yourself), but then again, I have 0 skill in that department.  

I occasionally have to do unclaimed property claims related to the estate work I do as the attorney for an estate (unclaimed funds in the decedent's name).  Some times the service is provided as a courtesy because the amount is typically relatively small.  I can't imagine trying to turn it into a full time business unless it is the way that @Don Konipol described it (i.e. volume, lots of staff, good processes to identify and claim funds, etc.).  

Maybe other states make the process easier (but in all honestly NJ is fairly reasonable in how it approaches the issue) and have much larger amounts in question, which might make it profitable, but you would have to look state by state.

I had family evict a "nightmare" tenant in Iowa, and it certainly was not easy.  Without getting too much into the details, I would agree with the assessment that it is a middle of the road state.  While Iowa, statutorily speaking, appears to be a fairly Landlord friendly state (can cancel MtM leases without cause, etc.), it really depends on the judge you get.  One aspect that is not landlord friendly is the fact that even after you have judgment for eviction, you will have to go back to court to get a forcible entry detainer to actually enforce the eviction if the tenant refuses to move out after a couple of days.  You as the landlord have to ensure that the move out process is orderly (hire a moving company, etc.).

An example of an argument the tenant could make (I don't agree with any of it, but I can imagine something like this):

"Landlord created inhospitable environment for my family, when I have paid rent every single month.  He sent me this letter which contains many falsehoods and slandered my reputation within the community.  Landlord is threatening me with blackmail by saying he has evidence of crime I did not commit (or I can explain it was not a crime).  If the crime was so bad, then why didn't he report it to the police?  I should not have to uproot my family because Landlord blackmailed me with this letter."

Something along those lines...  

How persuasive is it?  To me, not very... to a very tenant friendly judge, who knows.

Were you holding the condo as an investment or as a personal residence?  

If it was a personal residence, then you probably should filing a GIT-REP 1 (if you are a FL resident).  A GIT-REP 1 is withholding for NJ State Personal Income Tax.  Ask your attorney to ask the title company and they should be able figure which form to use based upon your answer to the first question.

You will have to file a NJ 1040 to get your withholding back if you end up filing a GIT REP1.

Landlord/tenant is not my specialty (estate and transactional work is), so take the following with a grain of salt.  

You can try your method to see if it works, but if it does not, and it ultimately goes to an eviction, you may end up having everything delayed/pushed back/chastised depending on how the court views your actions.  You may want to try a carrot (cash for keys - make sure to follow best practices so you don't get stiffed), instead of stick.  If you do end up sending your letter, I would attached  the notice to cease.  

I do not have any experience with the unconscionable clause; I know that it is out there and it depends on the judge you get, but I couldn't tell you more than that.

Since you are a LLC, you would have to be represented by an attorney in any court proceedings, per court rules. (If it goes there).

For any lease violation, as previously mentioned, issue Notices to Cease the specified behavior and how it violates the lease.  Keep a record of those notices so that you can present them to your attorney when/if an eviction happens.

In Jersey, any eviction has to be 'for cause', which is why the notices to cease are important.

You can raise the rent, but be careful that any rent raise can be challenged as 'unconscionable.'  Just keep the rent within the market rates.

Hire an attorney to help you through the process. If you own the property in an LLC, then you have to have an attorney, per court rules.

As mentioned by others, NJ is a tenant friendly state, and any eviction must  be 'for cause', meaning that the basis of notice to vacate and eviction is for a reason within the Landlord/Tenant statutes.  The State of NJ has a Truth in Renting pdf/pamphlet that is written for tenants but as a landlord, gives you a good idea what you need to do and expect.  Check it out.