All Forum Posts by: Account Closed

If the bankruptcy was filed before the auction, It means you can't do a thing with the property for months, if ever. The house becomes part of the bankruptcy estate. Then depending on the type of BK (chapt 7 or chapt 13) the house will either be put on a "plan" to pay the back payments over time and you get your money back. The other thing that could happen is the trustee for the estate could decide to sell the property and there will be an appraisal, probably a real estate agent and so on.

Your next move will be to call the bankruptcy court and ask if they filed a chapter 7 or a chapter 13. You could also hire a bankruptcy attorney to check that out for you but you can do it yourself. You can also check with the attorney holding the auction and ask the status and what to do next.

It is unlikely you will get the property at this stage. Bummer, I know, but it is quite common.

 I started doing these about 25 years ago when I was a loan officer in Seattle bailing people out of foreclosure. At the time there were a few people I knew of that bought houses at auction. They had to pay cash and it seemed risky to me. I simply sat down with myself, and I said "Self, what if you could figure out a Safe way to buy BEFORE the auction and beat all those fat cats to the punch?". I figured that since I knew the foreclosure process, and knew the lending processes, and I knew what could and what couldn't be done, I'd just do the logical thing and take over the mortgage. That required meeting with the owner before the sale. I got to see the property before I bought it. That's a Huge advantage. Most of those properties I flipped, some I cash flowed. I'm in my element when it comes to creative financing.

Sorry for the buyer? Don't be silly. What would you rather they did, stop making payments and default? What sense does that make?

The property was worth $225,000 and they owed $223,000 - they had only $3,000 in equity

If you do the math, I saved them the $10,000 they would have had to spend to get the place ready for sale (it was a mess), the 4 payments of $1217 for $4,800 waiting for it to sell and close with no guarantees of how long it would take, the $5,000 in concessions for an FHA buyer, electric payments, water payments, the realtor fee of 6% for $13,500 closing costs of $2,000

for a estimated total of $35,000 they would have had to pay out of pocket to sell the thing. They saved a ton of money.

Not all properties are good investments for all owners.

They were fortunate I came along and bought it.

Perhaps you've heard of Phoenix. There are so many Canadians here that we have a hockey team.;-)

How can I help? There is a company in town that specializes in Canadian taxes

This might get you started

Average Turnkey Cash Flow Per Door In Phoenix Metro Area No Bank Financing Needed

https://www.biggerpockets.com/forums/600/topics/584916-average-cash-flow-per-door-in-phoenix-metro-area

Here are the numbers

Now tell us what you Really think, ;-)

Just kidding, you are spot on. But, it was Columbus that set sale, not the entire Spanish Armada. That is why we know who he is. He took action.

You can do Joint Ventures with the format of this:

3 Ways to Wealth in Real Estate – Fix & Flip, Buy & Hold, Turnkey (Cash flow) – Here’s How

https://www.biggerpockets.com/forums/311/topics/780022-3-ways-to-wealth-in-real-estate-cashflow-flip-hold-here-s-how

 By all means, do as much of the work yourself as you can on the first property. It gives you a perspective so that when you do hire contractors, who bid and work on jobs for you, you have an idea of whether the bid is reasonable and whether the work is quality. I think people who miss this step spend way more in the long run since they have nothing to compare the bid to and overpay. It's called being lazy with your investment. Yes, you can have a contractor do the whole thing but you won't be learning important information. And it adds pride of ownership when you have spent time int he house looking at it's actual structure and condition.

Now, if you are making $200 per hour full time, forget about what I just said ;-) It's about "perspective". Where are your time and money best spent?

Why didn't you have any say in the matter? If he is a tenant that means you still own the property and you have legal obligations. You are still responsible for any citations from the city. I just saw that you sold on Land Contract. Within that agreement you should have that you "as the lender have the right to repair and bill him in the event he neglects the property to the extent that it reduces the value of the secured property" or something like that. No bank will allow "waste" of the asset protecting their loan.

Well, it seems we do things a little differently.

1. The way I calculate rent is principal, interest, insurance and taxes plus it has to cash flow by a few hundred dollars above that. If the numbers don't work it isn't a decent Lease Option to a Tenant Buyer.

2. The Tenant Buyer has to send the rent payment to me. I pay the property taxes. Obviously if they start missing payments I am aware of it and we have a discussion immediately.

3. I stay away from areas that are restrictive like Historic Districts and overly zealous HOAs. Some areas in Scottsdale have HOAs within HOAs and they are darn particular about things. So, I don't buy in those HOAs and put a Tenant Buyer in.

4. I always get a substantial down of about 10% (Option fee) of $20k to $25k. It sorts out people who plan ahead (save) and people who live month to month. People who plan ahead usually take better care of things.

5. The Tenant Buyer is responsible for all maintenance and repairs.

6. The amount I get down covers any costs that occasionally arise when a Tenant Buyer doesn't complete his Option agreement and moves. That happens on occasion. I simply clean things up and collect another $20k to $25k with a new Tenant Buyer.

 I have what some may consider to be a "complicated" return and I have "thought out" goals. I've found that in interviewing CPAs I had to educate them to a certain level just to determine if they could understand how I invest and why and how to properly file my taxes. Nobody wants to look foolish so a couple of the CPAs said they understood (one was also an attorney who had a certificate that allowed them to practice before the IRS) and still they missed some significant facts that allowed for some serious tax deductions for me and smart inheritance planning. I read a LOT and I attend seminars on such. I understand the basics of complicated filings and complicated asset protection and I can tell if a CPA or Attorney is on the right path.

My personal opinion is that, typically but not always, a combination CPA/Attorney who understands tax liability reduction, asset protection and inheritance planning is golden. It's extremely helpful if they invest in real estate. It going to cost you a bit more but it saves you a great deal. Can a CPA do this? Maybe, but they have to think outside the box and see life from several different angles. I also have high regard for Enrolled Agents who have actually been in the trenches. Real estate investing is a contact sport; it isn't chips and beer in front of the TV on sunday watching football. Don't confuse the two. The IRS doesn't confuse it and they'd be happy to take your money.

 Are you using bulk mail or 1st class peel and stick stamps?