All Forum Posts by: John Harrell

Thanks for the reply Ron. I started about 20 years ago mainly buying land at the sales or buying struckoff properties that the county had been holding for several years. They were easy to flip because the county had them for longer  that 2 years . Those days are long gone. This was the first time I bought a house and tried to flip after 6 months. Lesson Learned !

Michael is correct very little available. In fact there are only 28 homes posted for foreclosure this month. And most will be canceled before the sale. The tax sale last month started with about 30 and ended up with only 2 that were land or homes  and I believe 6 others were mobile homes in parks. 

Thanks for the reply Rina. I have not used a tax sale service company but I live in a rural area. Our local paper posts all tax sale information including any pulled properties prior to sale.  If you have a house that has existing tenants or is move in ready that could work. Good Luck at the sale . 

So you decided to get into the tax sale business . You get the tax sale list study the properties and decide which ones you want to bid on. You have listened to all the guru's talk about how easy and profitable it is. You even have set a max price for each property you will bid on . You are ready. So far so good. The first Tuesday of the month arrives let the bidding start. The first couple you bid on goes past your budget but the third one is a house on a lot in town that has been abandoned for 3 years . The owner died 8 years ago so there is no homestead exemption on the property as verified by the appraisal district . Congratulations you have the winning bid. You give the county your cashiers check and wait for your sheriff's deed in the meantime you go inspect this Jewel you have bought . Still good. When you open the door the bad shows up. The house was home to hoarders. It is even worse than the TV show. Dead animals, some are mummified. The trash will fill 2 -40 ft dumpsters. You need to clean it out before you can begin to estimate repair cost. And remember the redemption period for non homestead property is 6 months which means only repairs to prevent further damage to the home is allowed. It also means an heir can show up during that time pay you the amount you have spent on the house plus 25% interest and get the house. Not a bad deal very seldom happens though. Now the ugly. The 6 months expire and you own the house. You have a budget to repair the house to flip or rent.  Off you go to a lender to get the money to remodel the house with your free and clear title as collateral. The lender refuses to loan any money on the house for at least 2 years because no title company will insure the property  even though Texas property tax code,property code and probate code all basically agree regarding  ownership and redemption of the property.  You can't even sell the property because no buyer can get a title for 2 years. You can't repair ,no money the house is not livable so you can not rent it out. Property taxes have to be paid and the builders risk insurance has run out and will not renew until remodeling work is ready to start  which can't be started for at least 18 months. Any damages to the house during that time is out of your pocket, it could be completely destroyed. You might find a investor who might buy you out but unlikely. So you end up trying to hang on until you can get a loan and praying the house is still standing when you do. all because some guru said hoe easy it was to get rich at tax sales. Moral of the story .Don't buy tax sale property unless you have enough cash to cover all cost for 2 years. It can a profitable business but only if you are financially prepared.  

Not wanting to beat a dead horse But I still have several questions .

How long does the home owner have to be deceased before some possible heir can show up and claim ownership? Or is there not a time limit

If what I understand in reading Texas property codes 33.54 (a) 1&2 ,34.08 and section 16.002 in civil practice and remedies code, it appears someone that wants to void the sale they need a recorded deed and a couple other things . They can only try to void sale within one year if not a homestead.

Does this also apply to bank foreclosure? 

Thanks again to all.

Thanks for all the reply's . I attempted to provide what I thought was all info needed but as I read the responses I see I may have not done a very good job. So here goes another try. The owner of the property passed away June of 2010 and did not have a probated will. The county foreclosed on the property approximately April 2017. I bought it June 2017. The county removed the homestead exemption January 2011.  There was one son who passed away 2014. He did not own the property and the deed remained in the mothers name until the county foreclosed . There were no liens of any kind on the property other than the tax lien. I should clarify as well that a title company is just basically an insurance broker. They get quotes from an insurance underwriter like Stewart ,Mission or Fidelity. So what happens is there can be a failure to communicate all relevant facts to the underwriter. For example Mission would not insure unless I got a deed from the mother and son. Was not really sure how to manage that. I thought their people would do a thorough title search. Any way all your thoughts are greatly appreciated as are any others.

Thanks, John      

No ,the property is a house and lot . I tried with Stewart Title and they are the ones that wrote the two year exclusion on redemption. I thought when the did a title search all that information would be available, maybe not. 

I bought a tax sale property 8 months ago, non homestead. Title Co. will write policy but exclude redemption for 2 years. Here is the kicker. The homeowner whose name is on the deed died in 2010. There was no will and last family member died in 2014. The county removed homestead exemption beginning in 2011. The house was abandoned.  I was told that after 5 years of not being a homestead there are some  Title companies that will write a clean policy. Does anyone know of a title co. that will do this? I have a buyer if I can clean this up. Any help would be greatly appreciated.

John 

You might try to contact law firm that handles the tax sales for the county that has the property to verify   the full price owed including possible interest accruing on struck off amount . During the conversation      ask them if they are aware  of any problems with the property. In fact you might ask them why the property has been struck off since 2010 and not sold. You could look on the appraisal tax rolls at the properties surrounding this tract and see what the values are for them and compare . It seems the fact   the property has not gone up in value since 2010 combined with such a low  bid to value just raises red flags. If you have seen the property go look and walk the property , (Watch out for snakes) maybe there is a dump site on the property , old oil or gas wells. I nearly bought an old garbage dump site from the 30's that was not recorded. Had I not walked the property I would have never known.  What about easements on the property ? Or even worse no access to the property (land locked) What is the shape of the property? Is it square , rectangular ,pie shaped . Just different thing to check for.

  John

Ask the tax assessor if there are any issues with the title. I have found them to be very helpful and willing

to provide any information about the property they have.  If it is in the city limits make sure zoning requirements have not changed.  Maybe the land use restrictions have changed for that piece of property. I live in Texas and have bought tax sale properties both current and struck off. It has been my

experience that a property struck off that long ago with that kind of spread between minimum bid and assessment value has some type of major problem. due diligence, due diligence, due diligence

When you buy it you own it no refunds

Good Luck

John