All Forum Posts by: Justin Williams

A person who didn't pay property taxes since 2009 also has other liens like child support, nuisance red tags, and other liabilities unknown. No you cannot get any kind of loan even not hard money with those ghosts who are first on title. They can auction at any time, your transfer deed doesn't stop them. 

You state you paid some of the taxes? Why would you do that on something you have no ownership?

43000 over 13 years my guess is there are other problems, legal ones. Did owner file bankruptcy, was it released?

If you change the deed without title insurance you have nothing. All the other liens are in control. 

What is the value of subject as it is today without rehab minus all that is owed (you need title report with payoffs to know this) = value.

@Justin Williams

You should really consider ordering a title commitment to make sure there are no other liens, judgments, lis pendens, mortgages on title that you aren't aware of. Quit claim deeds can be associated with fraudulent activities, unfortunately, and if you don't get an owners title policy as is normally done with purchase transactions, you could be caught in some serious issues later down the line.

I've seen situations where property was purchased without title insurance at auction only to realize it was built two feet over the property line making it difficult to resell. Title insurance would have helped address this. I've seen shady investors quit claim to a sister in between the time our loan (I'm a private money lender) was funded and then the sister obtained a larger loan in 1st position at the same time. Title insurance once again was what saved me.

Spend the few extra bucks to close it properly and get a hard money loan of you have to. The interest paid for that loan and the tittle insurance policy will be well worth it to be done correctly.

Buying via the courthouse without a title company/ attorney (if in Chicago I believe it’s a title attorney) is another layer of risk. I love that you sound eager to get a good deal… but what if you now have another $30,000 in liens attached to the property? Having someone with a background as a title agent at least run a search for you could mitigate the risk. Having said all of that, there’s been times I’ve chosen to catch up on property taxes on the refi leg of the brrr process (particularly on a delayed brrrr where I had a years worth of property taxes to pay) so in theory it could work. It just sounds like you are biting off a lot to chew here, but not saying it can’t be done just would add extra caution. 

The cleanest and simplest way I’d ever buy it is pay off what’s owed upon acquisition, and run the numbers and factor that part of the cost in like any other expense. 

@Justin Williams yes you can quitclaim deed the property over, but do you really want to do that? I love the creative thinking, but you should give this one a hard pass. Make sure the deals you are doing have controlled levels of risk until you can be ok with losing it all on one (and still be fine). Based on the posts thus far, I would always recommend that you pass on a deal like this until you have 5-10 deals going at a time and you can swing for the fences on a high risk one like this. 

Would they have to if paying cash? Why is it?title companies business if there is back taxes if buying cash?

@Ned Carey

I believed the original poster when he said…

“Hello BP Fam!

I recently found a property with about 43k in back taxes.”

Maybe they meant income taxes? That would make more sense. Property taxes makes zero sense. 

@Justin Williams I like your creative thinking but this probably isn't a deal that will work. You have to pay back taxes in order to transfer title as @John Warren said. You could write a contract to purchase with delayed settlement, renovate, and then get a loan to purchase the property. This would be a very risky venture. 

Again as John said, the idea that you can do a gut rehab for $35-40K is not very realistic. So this deal works with your optimistic numbers but it is not like a killer deal. It is not a deal at all if the rehab is $60k for example, and it could be more than that for a full gut. 

@Khari F. 
      Why is it?title companies business if there is back taxes if buying cash?

It is not a title company issue. The county or state will not allow the sale to be recorded without the taxes being paid. There are strategies to do this without recording but that increases the risk substantially. 

@Bill B. 
       how do you get to $43k in back taxes on a property that’s worth less than $100K?

Water bills or other municipal bills can get added into the taxes due. Often fines can cause outrageous amounts to be owed. Also if someone is in bankruptcy for years the taxes can accrue with very high interest rates and it can add up quickly. Also the property may have been tax assessed much higher before, with higher tax rates and now the assessment has dropped due to condition but the old taxes remain. 

1) I don’t think he can own it until the taxes are paid off, the title won’t transfer. 

2) how do you get to $43k in back taxes on a property that’s worth less than $100K? $1,000 or less/year with no payments for 40 -50 years? Are you sure someone else hasn’t already claimed the property at a tax sale? I would assume 10 years is the very longest you could go without paying property taxes? Maybe 5?