All Forum Posts by: Michael Mcghee

@veve yates 

Welcome to the BP community. You will learn a lot from the great resources that the forums offer. Happy hunting for those deals.

I would put the property under contract immediately with an inspection contingency. Then find out if there is a sale date and if so ask the lender for more time or have an agent to list the property as a short sale. This will buy you some time. Like @ Davinder Toor said, get an attorney but what's crucial about the attorney is that you want to run a title check adapter. If he only owes 25k  and willing to let it go for that, then that could be a smoking gun. The attorney will let you know if there are any other liens including but not limited to Judgments. If the house if really worth 90k you should not have a problem flipping it. At that price I would also consider closing in it myself using my own funds or a hard money lender. 

Take a look at your closing documents, particularly the hud-1. It will show if taxes were paid at closing or if they were prorated and if so who got the credit for the proration. Also did you pay cash or have a mortgage? Was there escrows if there was a mortgage? Theres really not anything to worry about so ill wait to see what happens and just pay it when its due. 

@Jay Hinrichs thanks im assuming they are the leaders in that area. 

@Jay Hinrichs who does your title insurance regarding your tax sale properties. I currently use an entity that has to use Chicago Title but would love to have another option. 

@patrickscifres 

I looked up the property from information you gave me and I matched it up. One problem is the address is 2 digits off so take two numbers off of the address and you will have the correct address. I cross referenced this with the physical data and Google pic of the property. The taxes are all current with only county being $132.19 due not yet payable. The address on the website does not correspond with any address so the person that verified the taxes were wrong. The guy took out a mortgage in December of 1998 and it was due Jan 2009. The house was originally purchased on June 9, 1967. I ran a vital records check on the name and got a hit for a death on 5-31-06. He has a son which is a jr and I got a death hit for him in 2010. There was also a judgment on the son in January 2007. So ask the seller who is selling the property and which lineage are they. I checked probate and no probate file was opened. So this would have to be done with affidavits of heirship from next of kin. However if any of the next of kin have any judgments they will automatically attach to title. Make sure you get title on something like this because of the gaps and the ownership was so long in case something was missed. You will also have to order a TEnncare waiver in case he used any tenncare funds because of his age. This is tedious and they take up to 30 days. 

Please message me with any questions. 

@Patrick Scifres ok what do you think of the deal on paper? Is it worth 6k? Who is the seller closing with? That attorney may have a relationship with the wholesaler and can ease your mind. Have title worked been pulled on the property? Is title clear outside of taxes? I would still call MLGW because as a worst case scenario the tenant could be a squatter or stealing lights for all you know. Now I have done a lot of deals where things didn't seem right but answering those questions allowed me to make a judgment call. And lastly if the deal is still out there it must not be in such high demand so trust but verify. Is your buyer still interested? Have someone else call to get additional information. Don't lose sight of the deal. It seems these guys have you pissed but they are not obligated to work with you. I would work with anyone even buy and sell to people that may have said things about me. I keep my eye on the prize. I would love to see how this deal hash out. So if your buyer is not interested send me a message because I will pay you if I close it. 

@Patrick Scifres

When it comes to the buyer's agreement I disagree on some aspects. But we can agree to disagree on that point. Have you ever tried to do a deal with a FSBO and they were adamant about not doing a co-op? Similar situation, you cant barge up to that FSBO and say hey I have a buyer's agreement and my client wants to write this offer up on your property. This is sort of a similar situation because at the time if the wholesaler has the contract he is in fact the interested party. So, they advertised it was rented for $575.00. Have you or your client driven by the property? Have you called MLGW to see if utilities are active? Repairs at $10,000.00 and occupied seems weird but maybe it needs a roof and some other major items done. Your two main points are saying the seller is not truthful and you saying that you have a responsibility to your client. Both of those points are good but they are not determining factors in this deal. Stick with the numbers and get this deal done for your buyer. Now, have you spoke to your buyer about paying your fee?

@Patrick Scifres

Good Morning Patrick,

Allow me to further try to dissect this deal and scenario. You mention a buyer rep agreement, which is only good if the seller is an agent in a sense. The wholesaler does not abide by TN real estate laws so that would be a moot point. The sales price is $4,200 and you mentioned it would drop to $3,000.00, which appear that a quit claim was discussed because that's why the issue of taxes even came up. Also the back taxes of $3,200.00 and a $3,000.00 sales price would be a pretty darn good deal anywhere in the city if the buyer is already interested just off the address or initial engagement. You also said you had the buyer's best interest at heart and you asked him/her if they were working with an agent. This means you just met the buyer as well and it appears that you have not met the buyer personally. Is this buyer an accredited buyer, especially buying so low which means problems if they are not hands on in this market. Now to analyze the deal:

At $6,200.00 was the property a good deal? Did you pull comps for the buyer and if so what did you think of the property? I don't ever get hung up on the lies some sellers tell and I focus totally on the numbers. If this was a good deal at that price don't worry about the lies and get it closed. How many years of taxes did this $3,200.00 consist of? On deals like this, and yes I love to buy these kind, I would get it under contract and immediately pull title work and spend that $100.00 to make sure there are no other liens besides taxes. This appears that some wholesaler found someone about to go to tax sale and they offered them 1k or so and they put their money on top of that. That wholesaler does not know if there are judgments, liens, or other encumbrances that would affect it. So if this was a good deal I would have bought it. Would you mind putting the address out there and the wholesaler and let's analyze it for educational purposes and break the whole deal down. If you ever have any problem properties shoot them my way I love to work out the kinks on deals like these. I smell a problem and there's a reason the price is so low.