All Forum Posts by: Ryan Lee

Well at 47 years young we have entered into a purchase agreement to by a 4500 Square foot duplex.  Value of building is 250K and we are purchasing it for 227K.  One side rents for 1295 and the other will rent for 1395 because it's just nicer but same size.  We are putting 70K down into this with our own money and we will cash flow 2000 Gross per month after the loan payment.

So in a month from now, my wife and I will be officially be landlords.  I want any advice anyone can give us here.  It's a big step.

Small Items I have been contemplating:

1.) We have a LLC set up and will be setting up a business checking account this week. Do you have tenants send a check directly to your home or should I open a PO box?

2.) If a tenant is ready to move out and I need to keep some of their security deposit (let's say I asked them not to paint or hang wall-paper and they did). Do you wait until they are fully moved out before you give them what you think is right?

3.) When a tenant moves out, do I put the water and electric in my name each time they come and go when it's vacant?  How does that work?

4.) Since we have this under an LLC, do my wife and I introduce ourselves as the landlord owners to the tenants?

5.) When vetting out new tenants, can I decline anyone I feel is not going to qualify?  How do you tell them they did not qualify?

6.) If a renter does not pay on time, how do you deal with overage charge fees?  My feeling is if they do not pay overage charges, I will subtract it from their security deposit?

Thank you all!!

-Marty

Thank you for your question, Russell.  I was in the middle of legitimately acquiring the mortgage note for the Massachusetts property, already in foreclosure, when a combination of this person, the sellers, the seller's mortagee, the seller's real estate agent, and the buyer's real estate agent, convinced the note holder to back out of his sale to me.  They then orchestrated a sale of the property to the buyer I'm investigating.  The mortgage the buyer received for the home was arguably fraudulent.  The home had extensive physical deficiencies like no running water, and padlocked rooms with floor joists structurally unable to be walked on.  Yet the realtor conducted a regular sale of the property, and the buyer received a conforming mortgage.  So, along with trying to determine if the buyer himself committed wrongdoing in appying for the mortgage he received, it already appears obvious that somehow the banks appraisal process must have been monkeyed with in order to result in the bank giving the buyer an ordinary mortgage for the purchase.  I'm determined to uncover every bit of wrongdoing that took place and bring all available evidence for it to all possibly relevant authorities.

If you don't have any experience with undeveloped land I would STRONGLY suggest that you obtain the advice of real estate professionals. You may be dealing with surveys, environmental assessments, legal access, physical access, deed restrictions, zoning, floodplains, utilities, permits, and that's before you even build anything. There is a guide, it's called a "land agent", not a residential agent. Look for a land agent with commercial development experience if you are planning a mixed-use project. They can help you acquire property, guide you through the process, and put you in touch with all of the other professionals who you will need. Good luck.

As Wayne noted, it is not technically a foreclosure but you are requesting that the county proceed with the auction process.  To answer your question, you can request this after the 2 year point.  Most of the counties will list the date on their website and you have up to 5 years after that point in which to request the auction. After that time(7 years after issuance), if you have not requested the auction, then the certificate becomes void.

You have to submit to the county all of the funds that are owed on the property such as other past due taxes, advertising fees, sheriff's notifications, etc.  So you could feasibly purchase a tax cert for $1,000 and still have to front another $5,000(as an example) for other taxes and fees.  This makes the opening bid $6,000.  From there, you would have to be the high bidder in order to gain the property.  

I think of tax certs more like a CD.  In FL, the minimum return is 5%.  You may have to wait 10 days, you may have to wait 10 months.  But after 2 years, you can decide if you want to pursue the auction.  Yes, interest accrues for as long as the cert is active and not redeemed

Tax lien certs are NOT title to the property. They are liens place on the property for unpaid taxes. The counties auction them off to collect taxes not paid by the owner. They start at 18% and are bid down. I am no fan of them because some are bid so low there is almost no return. After two years, the holder of a tax lien cert can apply to have the property sold at auction. High bidder gets the property and cert holder gets paid. If you end up with tax liens on property nobody wants, you end up owning the property.

@Ryan Lee the Florida Statutes on tax certs is pretty straight forward.  You can buy certs at auction or OTC after the auctions.  The rules and dates are slightly different for each county but all must follow the state statutes.  In general, you can bid anywhere from 0%-18%.  0 gets you just that....0%.  However, you can bid down to a 1/4 of a percent and still win the auction which pays 5%.  I see a lot of folks do that just to win the bid.  I suppose if you have enough money to invest for 5% and make a sizable profit, then that's the way to go. Remember, Florida has lakes....lots and lots of lakes so always be sure to take a look at what you're bidding on and don't get stuck with a .5 acre of water.  Alligators really aren't all that profitable! :D Once you win a tax cert, it is held for 2 years. Owners can redeem the certificate at any time during that two years. As John mentioned earlier, you do not own any part of the property so you are prohibited from setting foot on the property or contacting the current owner.  Just sit on the cert for 2 years and collect interest if they are redeemed. After 2 years, you can foreclose on the properties for up to 5 more years(total of 7 years on the cert). The owner can redeem the tax certificate at any time until a deed is issued and paid for by a new owner.  You still do not own the property unless you win the bid at the tax deed auction.