All Forum Posts by: Lynnette E.

There is a flipper in my neck of the woods who has bought a few 'houses' at crazy low prices, started fixing them and found pretty bad situations then he resells them at the profit he would have made if he finished it to some poor newbie.  

The newbie thinks, great he put in new windows!   Big ticket item!  How could he walk after that investment?  He must have way too may properties.  

What a deal for me!  

They miss that the main water line has collapsed and so has the sewer line or leach field or septic tank, because the water is off.  There is always a big cost item that will result in no profit and a lot of work.  

Go in Friday with your eyes open.   The seller knows something you do not!

And make sure you can get title insurance on the property.

Thanks for the answers!

What about buying it at the higher price and putting $25k into an escrow account for repairs and upgrades and then you can draw it down as you need it and all is on the paperwork?

Hello,

I am not in the Memphis area, but more in mid/east TN, but this forum is more active than the others in TN and this question is TN specific so I am hoping someone here can help educate me.

I bought 2 properties (residential homes) that I am fixing up to rent.  I have noticed on some websites that rental property is taxed as commercial and some are taxed as residential for the property taxes.

I did notice that the properties held as XYZ Rental LLC are always taxed as commercial.

Should all home/residential properties be taxed as commercial if they are rentals?  Is the decision based on how the property is titled?  Or are most folks just sneaking through and the taxing authority does not know its a rental?

Can anyone explain this to me?

Thanks!

@Wayne Brooks I just closed on 2 REO properties bought through auction.com and what I described is exactly what happened. Both closes were in the last 2 months and within weeks of each other. One the end of Sept, the other the second week of Oct.

Wells Fargo paid for the water, trash, etc.  and US Bank did not.  I closed on the Wells Fargo property first and they said through the escrow instructions and a follow up up e-mail that if I gave them the information-amount and who to pay they would pay through escrow.  It was on the escrow statement and it was paid from their funds.  I paid less than they foreclosed at.

I asked for the house with US Bank since this was not in their escrow instructions and the escrow agent said no, USBank does not pay for this.  And I did to open services.

On this I am sure its right, I just lived it.

@Wayne Brooks agreed location of the property does change the outcome a lot.  

ALSO it matters which bank has a foreclosure. USBank did NOT cover outstanding utility, municipal things like sewer and trash or the HOA fees. But in the same state, Wells Fargo did. Wells Fargo paid it out of their proceeds, it was not debt eliminated by the foreclosure, they wrote a check at the end of escrow.

@Ron S. we are saying the same thing, Federal government liens survive everything.

@Ron S. yes, the federal liens, utility and all the other debts are still there at the courthouse steps auctions.  BUT if its already foreclosed on the beginning of the sentence I wrote above counts--all those other debts are gone.  Those other debts are still there in the court house steps auctions.

If the property is already bank owned, the old debt is cleared...EXCEPT for sometimes utilities, sewer, trash, and possible Federal liens.  So this would not apply to the bid on the court house steps deals.

Do your due diligence.  Look at the property from the outside, if vacant look into the windows.

I looking at auction.com properties there was one house condemned by the county.  Is had 'not fit for human habitation' posted on 2 places n the house.  No mention of this in the auction listing.

Another had a split foundation--splitting in half by several inches, front to back, repaired with foam.  Again no mention.  I passed on those, one has now sold, one is still there.

I bought a house on that website, horrid interior mold, busted water main.  Another had hidden foundation issues, that were obvious from the inside, just not from the outside.

You will sign all sorts of lies on the paperwork--you inspected the property, etc.  But you can not.  All part of the game.

Get title insurance.

Keep bidding at what you are willing to pay.  They bid against you, forget the bids from others.  Just put in what you want to pay and walk away.  They will relist it over and over.  And sometimes people get caught up in the bidding and pay more than a perfect house in move in condition would sell for in that area.

Can you just move it and store it in the garage or a storage shed for the 30 days while you clean up the place and select new renters?  Tell the new renters the garage will be available on XXX a date and get a dumpster on that day.