All Forum Posts by: Kareem Aaron

Wow, great insights!

Thanks for chiming in.

I'm playing checkers while the pros are playing chess.

I have some work to do... thanks again.

-Kareem

@Russell Brazil

Thanks for the feedback. 

@Ned Carey

As the go-to SME in this niche, would you mind sharing some things at play you see in bmore?

I'm hoping you have takeaways or lessons learned that may be applicable to other counties, including pgc.

for example, I spoke to someone recently that mentioned a strategy where attorneys buy tax liens for little benefit on the front-end (i.e., low interest) with expectations to earn on the back-end when they'll collect legal fees for services.

he also mentioned many seasoned investors have models from years of collected tax lien data that they use to their advantage.

I'm trying to understand how in over my head I am in this space.

Thanks,

Kareem

The foreclosure rate for pgc tax liens is basically 0%.

meaning, most liens get redeemed.

the maryland department of assessments and taxation (SDAT) releases a tax lien report, which is sent to the governor.

no property shows as foreclosured in the 2024 report.

I'm thinking maybe there is another strategy at play (at least in PG county).

-Kareem

Today I participated in my first tax lien auction in PG County, Maryland.

It took weeks of prep work to....

 - aggregate information from various public sources

 - define my criteria and perform data analysis

- review last year's tax sale results to get a ballpark of where I need to be with my bids

- drive to each target property to see the condition

- and etc. 

I was ready and excited to jump in. There were 3 batches and I placed bids in all of them.

I waited patiently for the results of each round only to get let down b/c I didn't win a single lien.

My 2025 post sale analysis (see below) shows that bidders are bidding so high that the bid premium is eating away at the interest rate.

What could be 20% interest is turning out to be mostly 2-6%.

You can get better returns from the stock market.... Heck, you may be able to get better returns from CDs at some banks!

So this is my question... why would anyone want to go through such an ordeal for such minuscule returns?

Why would the top 10 bidders invest millions of dollars for just 3%, 4%, and 5% interest? Couldn't they get a better ROI elsewhere?

I wanted just 12-15% returns, but I didn't even stand a chance.

Effective Interest Rate when including Bid Premiums

Top 10 Bidders

-Kareem

@Keith

your repsonse to this question was incredible!
rather than "serve the dish"... you "gave the recipe"
and the latter allows the investor to be much more empowered

i'm 6 years late on this, but thank you.

I'm not too familiar with your market, but i was in a similar situation in the DC metro and pivoted from renting/leasing to rent-to-own (lease option).

i got the place occupied in no time with above market rent, passed on any trivial repairs to the tenants, and collected a significant option fee.

The option fee is magical! The tenants have skin in the game so wont mess up (e.g., not pay rent).

I'm sure you'll get it rented soon; but just wanted to share an outside-the-box option that was successful for me.

-KA

based on this thread... I decided to get my license. 

In my opinion, the pros far outweigh the cons.

Fortunately, getting through the real estate salesperson material and exam was not so challenging b/c I was already a full-time investor and had a lot of knowledge.

It took me about 60 days, studying for at least 2 hours a day. I used theceshop.com for my pre-licensing course and did everything at my own pace right from home.

I would recommend investors do the training if only to be more knowledgeable about real estate and things related to on-market deals, such as agency. (I targeted only off-market deals, but that will certainly change now)

I'm just looking for an investor-friendly brokerage to hang my license in the DC Metro (MD, VA, and DC) now.

Thanks to everyone, particularly Wale, for chiming in on this post.

Best of luck to anyone who decides to dive in and be an agent as well.

-Kareem

full-time investor (... and soon to be agent!) 

I'm in the DC Metro and would be interested in taking on creative finance deals, including subto.

Here are some more details...

The property has a $40K+ water bill.

The water company has informed us that with foreclosures, the new owners are not on the hook for past balances.

so the lender/trustee is responsible for rectifying this... and the balance is so high they're delaying until they figure something out.

Aside from that bill, there are no other encumbrances and we're able to get clean title with owner's title insurance.

We got in the deal with cold, hard personal cash.

We have a balance, which is {AuctionWinAmount - DownPayment].

This balance accumulates interest until we close.

so we have equitable title, but the property is not deeded to us until we close with the trustee.

-Kareem

- I purchased a foreclosure property in Maryland

- in MD, the court has to ratify the sale... and this can take at least 30 days

- the trustee mandated that we close no later than 15 days post ratification

- I was ready, willing, and able to close per the date they specified

- we decided to push out the closing a few days due to inclement weather

- several weeks have now passed since ratification and they've continually delayed the closing

- I'm on the hook for interest from the day I win at the auction until the day I close!

Indeed, I can consult with an attorney for "official" advice, but I'm curious if anyone else encountered such an issue.

If it was my fault for missing the date, there would have been consequences (e.g., keep my down payment and exit deal)

What consequence can they face for this delay? The interest is pilling up.