All Forum Posts by: John Roorda

@Justin Smits - Thanks for talking me back from the brink, I owe you a virtual socially-distant beer.  If nothing else, this means that there may be a little less competition at the upcoming sale.

So right now, I'm sitting on 4 Indiana tax liens to come out of the redemption period this fall, and the initial plan was to hit the April commissioner's sale and pick up a few more that would come out of redemption approximately the same time. All D-class SFH in Gary, that appear to be in reasonable condition. My objective was to try to quickly re-sell most if not all of these, to tackle some personal debt, and then build up reserves for the next sale where I can buy to hold, rehab, and rent.

Until now.

My question is, once I get the deeds in my hand, who's going to be left standing to sell these things to?  It used to be that one could list one of these for $15k and sell it in a reasonable amount of time, but now I'm wondering if I should expect to be left holding them?  Is it wise to buy more?

Part of me is thinking that the average buyer for one of these properties is getting most of his rental income from section 8, and may not be hurting quite as bad as other landlords.  Plus the fact that taxes on these houses are next to nothing, so boarding them up for a little while until the world returns to normal isn't the worst thing in the world.

Tax sale buyers - are you still buying? D-class SFH landlords - are you in a world of hurt?

I appreciate everybody’s input. I was able to look in the windows, and saw massive water damage that’s beyond my budget to repair. This one is dead for now, thanks!

Yeah, TI is a major obstacle because I don’t have the cash on hand to do much more than minor cosmetics, and I’m unsure of taking on debt for this.  That makes my only exit strategy to price it for a quick sale before the next tax bill is due, which leaves me risking holding the bag if it doesn’t sell quickly and isn’t in a state for tenants.

Bob, those are great points.  Zoning is C-2 "Community Commercial".  No front windows, so not likely to draw any retail, but great for a mortgage broker or lawyer or something.  Previous owner was a lawyer, and google tells me that he angered the entire universe and split for FL in the middle of being disbarred 2 years ago.  Parking is roughly 25 spots, shared with a small vacuum cleaner shop next door, and the lot isn't striped.  

CapEx? Hell if I know. Judging by the recorded lien release, the roof is ~16 years old. Parking lot is in good shape aside from lack of stripes. Windows and doors appear to be all there and undamaged. HVAC and plumbing unknown. My carrying costs will be a tough one... as long as I can get one of my other tax lien properties sold pretty quickly, then I'll at least have some reserves to make the first tax payment or so while I'm getting tenants lined up.

Me:  Newbie - bought 5 single-family tax liens at the last tax sale, still waiting for the redemption period to time-out and get the deeds.  A few grand in capital to play with at the next tax auction.

Target:  A 4-unit office building in a B to B- area at the next tax auction.  Frontage on a main 4-lane road with plenty of shopping around, a mile from the interstate.  Appears to have been vacant for a while, but looks good from the street.  Been through the auction a few times with no takers.

Strategy A: If it doesn't need much, quickly sign a commercial property manager and get some warm bodies in there producing rent to cover taxes, signage, and CapEx. I'd be completely dependent on the property manager to find tenants, this market is new to me.

Strategy B:  If needs anything more than minor cosmetics, price it for a quick sale.

What I can't do:  Take on significant debt / risk, or leave it sitting empty racking up tax bills.

My current plan for the SFH tax liens that I'm waiting on is to sell those quickly to pay down some personal debt, and set some cash aside for future tax auctions. In addition to this property, I have enough cash to buy perhaps 1-2 more other properties at the next auction. It's possible that I could take some of what I net from the sale of my current tax lien properties, plus the net from one other property at this next sale, and possibly have a max of $20k to put into this property quickly.

One side of my brain sees a potential cash cow if I'm able to get it rented quickly.  The other side of me sees that it's sat unsold at a few auctions... I'm wondering what other investors know that I don't, and I'm afraid of getting stuck with a hard to sell property.

Can anyone offer any input?  Should I leave things like this until later when I have more experience and a bigger war chest?  Thanks!

Thanks @Justin Smits.  I've been in touch with Michael Kvachkoff - his rates are reasonable and the fact that the title search is included helps out a lot.  Now it's time to buy some liens!

@Justin Smits Thanks for the perspective.  It's not so much about a good vs bad deal, and more that my mind would like to see that money going to more liens instead of up in smoke in attorney's fees.  But you're right, there's much more to lose in not perfecting properly.  Can you recommend an attorney?

I'll be visiting my first tax lien auction in a few weeks (Lake county), and I'm trying to get the most out of my relatively limited war chest. I'm currently registered for the auction as an LLC, but as I understand it, there was a recent change to IL law that requires corporations to hire an attorney for all noticing.

I'd rather be putting that money into more liens vs. into an attorney's pocket, and I'm wondering if I'm better off re-registering as an individual so I can do my own noticing.  There's a title company in town that says they specialize in tax sale title searches, so they can provide all interested parties that need to receive notice.

Is it as easy as finding a template, copying and pasting parcel and owner information, sending out certified letters and taking out a newspaper ad?  The attorney's fees are steep (and I believe can't be reimbursed if not redeemed), but it would also suck to not get the deed because I screwed up noticing.

Anyone here done their own noticing?  Any tips and tricks you'd like to share?  Thanks!

Thanks for the input everyone.  Perry, awesome to see you here... I don't know if you recall, but we discussed a possible Homestyle loan back in January.  You're right... I had thought that I could just take care of everything that looked sketchy in the renovation loan, but something can always crop up, and I wasn't sure if the 20% down on Homestyle was with or without the renovations.

I can get roughly $19k as a 401k loan, but I'm very hesitant to do that due to the inflexible repayment terms and lack of early repayment option.