All Forum Posts by: Luc M.

Guys, thanks for all your responses. This manager DK'd a previous applicant at another one of our rentals due to a past eviction. I guess they don't mind evictions if they are a Section 8 applicant, or maybe because it was seven years ago. Either way, I think we are going to pass on this applicant and tell the management company we will not accept any applicants with prior evictions.

Thanks again all,
Luc

Ken,

Do I have to be set up for Section 8 or does my Management Company. I know they are, but I haven't done anything special.

I am a new landlord on some out of state houses, thus I hired a management company. Today, the mgmt company asked me to approve a potential tenant for one of my homes. Single lady with two teenage kids. She has a credit score of 546, income of $1.1k a month from her job (which she has been at for two months) and $300/month from Army Reserve pension. She will have a section 8 voucher that will pay for 60% of rent so her portion of the rent will be 25% of her gross combined income. The rent/income aspect is okay but the low credit score along with 8 collections and an eviction in 2005 leads me to wonder if I should be upset with my management company for showing me such a tenant. I asked the mgmt company to get me more information on this potential tenant but should I be upset that they sent over a pretty sketchy applicant?

I've practically given up purchasing any more rental homes in and around Orlando. Inventories drying up, all multi-offer situations and higher prices than just a couple months ago. I did manage to buy three homes but i was hoping for much more.

I am going to guess the following:

1 Risk level associated with investment
2 Past returns of investment
3 Tax implication of investment
4 Diversity of investments
5 Reputation of companies where investments are made
6 Social responsibility of the investment

"pretty sure once he takes possession, especially in a cash deal he could launch it to the moon if he wanted to. "

No, cash purchases don't matter, the restiction is still in place. It is what J Scott and Andy said.

Thanks mostly to the information and motivation stemming from this forum, I have purchased a rental house in Central Florida and am under contract for two additional homes. I will look to be adding more homes in Florida but my question today is regarding Las Vegas.

Can anyone recommend any good real estate brokers in Las Vegas that deal with out of town investors and does anyone have any good recommendations for property managers. I've had good experiences so far with my current PM in FL and I would love to be able to replicate that experience in another market. I know that Las Vegas is a tough market right now w/r/t supply, but I think it may not be too late to get some homes in that market for a buy and hold investor. I have to think that banks will figure out a way to accelerate foreclosures again so hopefully supply will be coming back to that market. I am a cash investor and am looking for long term rental properties (SFRs, not condos).

Ned,

A friend of mine knows a person that invests about $1 million in tax liens across several states. Last year he made a gross return of around 11% before his writeoffs and slightly under 7% after his writeoffs. Keeping track of hundreds of liens, dealing with bankruptcies and foreclosures across several states, etc., all seems like a lot of work for 7%.

Hopefully some of the bigger boys will go away when the Fed starts increasing interest rates.

Jerry,

The Comian presentation looks impressive, but there isn't a lot of history with a those numbers. The separately managed account isn't very mature so you don't see the problem childs in the numbers yet. I was taking a look at another presentation from another group of funds and their returns for several funds were around 11%, but that is before management and incentive fees. Assuming a 1.5% or 2% management fee and a 20% incentive fee significantly alters the returns to investors.

I went to a live auction in Mahwah, NJ recently. There were 40 certificates sold and the vast majority went for a premium. There was a $10.3k lien that went for 0% and a $50k premium. Another $3.4k lien went for 0% and a $14.9k preimum. There were plenty of others that went for 2-4x of a preimium. I understand being able to buy the subsequent liens and get 18%, but I really don't understand paying 4-5x of a premium and being able to make an adquate return?! Even lots were going for a 1.5x - 2x preimum.

Sure, this was just one auction, but I imagine that the same crew go to most/all of the other auctions in NJ (NJ does auctions by towns, not counties). Judging by just this auciton, I would not think NJ makes a lot of sense for individual investors buying liens.

So, let's say you have an amount of money sufficient that you can buy a nice diversified portfolio of tax liens in a handful of states (live and online bidding Counties). What do you think the return potential would be over a 5 to 10 year horizon?

I would think the majority of the certificates get redeemed but you would have 2-4% that you would need to foreclose on. Several of those that you foreclose on turn out to be a PITA due to someone filing bankruptcy, a mortgage holder challenging you and forcing you to spend money in court to protect your claim, etc. I would think that you would be able to get a gross return of 10-12% but then your net reurn could be 7-8% due to the costs associated with the problem childs.

Does anyone have any real world experience in what is possible with a large portfolio of tax liens over a longer time horizon?

Thanks,
Luc