All Forum Posts by: Jarred DeArmas

@RJ Dixon I just closed on an FHA on a duplex in Portland with Brian Paige at guild mortgage in Portland. He knows his stuff pretty well, you might try giving him a shot.

Hey guys, 

So I am trying to figure out seller financing and interest rates, and I'm having trouble with the interest part. I am not trying to figure out at what rate one should charge or pay interest, but more along the lines of how that interest is accrued.

Is the interest on a seller finance deal typically based on an APR or a flat rate for the amount carried??

example: If I was to purchase a house for $500,000 and the seller carried the whole amount at 10% for 30 years, that would end up equaling a total to the seller of $550,000 to the seller. However, if that was 10% APR the seller would probably almost double their money. I guess no one would pay 10% a year and keep that loan for 30 years tho..

Can you guys help me get this straightened out? 

thanks 

Thanks @Jeff B. for the advice. I was just looking at your profile and it sparked something in my memory about this house. "Rick The Probate Guy! Probate and property puzzles solved." I may have mentioned earlier in this thread that there was a notice posted on the door of this property. It was an envelope stuck in the door jam from the city, and after looking at your profile remembered that it said "Petition of Probate" or something along those lines, and had the owners names on the envelope. 

What does that mean??

@Andrew Horowitz nope, I actually just started looking into it as well. Ive been reading and learning for months about multi family and buy and hold, and never thought my first deal might be a driving for dollars tax deed, so I am trying to educate myself a little more on the subject. 

@Josh Carr DUH! haha just like it sounds I guess. Thanks for filling me in there. Are you suggesting to just ask them to sign over interest in the property without offering to purchase it? It sounds like a dream come true, but I doubt it. It definitely is a good document to have signed tho, so there are no questions about the transaction. Thanks for the tip,  I will probably sit down and write a letter with my wife this weekend. Ill keep you all updated!

Hey @Andrew Horowitz I FEEL THE SAME WAY!! I just recently stumbled into tax liens as well, but California is a tax deed state. From what I've read, you buy the liens at auction and you don't bid up the price of the lean, rather you bid down the interest you're willing to receive on the delinquent payments. So if taxes were $2500 with 20% interest, I may bid $2500 at 20% and you may bid $2500 at 15% and if no one bids lower than you, you would win the lien. 

Each state has their Right of Redemption period, so you can't touch the house until the county actually enters judgement of foreclosure. Some states its 2 years, some its 5. I think you also have to renew your interest in the lien each year, meaning someone can buy it out from you if you don't keep it current.

check out the BP Podcast #56 there is a lot of info on Tax Liens in there.

Hope this helps man, Im just regurgitating what I've kind of picked up, so sorry if Im incorrect!!

@Jay Hinrichs @Josh Carr thanks for the advice. I may have mispoke earlier in regards to the owners letting HOUSES (plural) go to tax auction. I found their last residence, which they actually bought from a family friend back in 2012. I contacted him and he said they bought the place to be closer to a relative who was sick and lived down the road. They sold it in 2014 at a small loss to an investor group. Im not sure why I wrote tax sale before, maybe bc it was on my mind and I am excited. So I am not sure if they know about excess proceeds or not. 

The good thing is, is that the house is vacant. No one lives there. They have timers for the interior lights, I know because my wife and I walk the dog at 530 in the morning and see them going on and off...I wonder if the electrical bill is being paid. They took down the mail box, and there is newspapers everywhere, but they get cleaned up every once and a while. A few months back I noticed a letter from the city stuck to the front door, thats what got me looking into back taxes.

I feel that I would try and vett the owners out before making an offer and try to see how they feel and if they care, no use in offering 250 if they would take 150...or 50. If I could get them to cary I think that would be a win win, and get what i assume is a burden to them off their backs. 

@Josh Carr what does quit claim deed the property mean? I know that I would still have to pay the property taxes, so I would structure it, so that the property taxes are paid first and the remainder is divided up into monthly payments over 20 years or so with maybe 5% interest, so that they are getting a reasonable stream of income every month for nothing. That would in turn leave me with a mortgage thats under $1000 a month and an ARV of $400000+

I know what I have to do, Ive been reading and preparing for my first deal for a long time...too long. I just never expected that my first deal might be a vacant tax deed property without conventional financing, let alone be a SFR, and possibly a flip. I always saw myself buying a Small Multi family with an FHA and doing a BRRRR, and holding forever, so this is a little out of left field.

I Have their emails and work places and work phone numbers, I Just don't know what to say!!

Help haha

thanks guys

@Josh Carr - yea I am trying to figure out the best way to approach the owners. Ive dug them up and found them in various outlets, I just don't know the best way to reach out. Thru my research, I have found that they've let another house in the area go to foreclosure as well...they seem to just walk away. Ideally I would like to buy it from them now, and offer to pay the tax to bring it current (not sure where that money will come from) and give them the opportunity to make interest by carrying the loan. The house is owned free and clear, and they are in their mid 60's so a $1000 coming in a month for X amount of years might be a nice perk for them

@David Beckett yea that is an option Ive been thinking of too. 50% of a deal, is better than 100% of no deal. It wouldn't hurt to have a mentor on this, I just haven't gotten there yet. Im trying to figure out what I can about the process. 

Hey guys, I am trying to learn as much as I can about tax deeds in CA, specifically southern CA. Does anyone know if it is possible to go to the county and buy the deed before auction? Ive done some research on a particular property and its owners, and I've found that they've let houses go to tax auction before... like they don't care and its just their M.O. Maybe they are interested in the excess proceeds? 

This particular house is vacant and old with all the signs. The thing is, the property is owned free and clear, with the only lien being the delinquent tax. I believe this is now the 5th year, and I want to make a stab at obtaining this property. If it goes to auction, I probably have little chance, seeing as I don't have much cash and in CA, the opening bid is for the taxes due and it just goes up from there. My only other strategy is to reach out to the owners and offer to purchase the property and pay the tax before it goes to auction, but only if they carried...which shouldn't be an issue since there is no mortgage. I would, assume, I would be helping their situation by putting some money in their pockets and they avoid the hassle of loosing another property.

Thoughts? Tips? Ideas? If I could obtain this property, the possibilities would be endless... I am believer in buy and hold investing, but If I could get in this property cheap enough, I could stand to make a ton of profit on a flip, which i could use to invest into multiple properties and not be forced to scavenge the bottom of the barrel.  

Thanks for the input guys. I am really interested to hear your ideas