All Forum Posts by: Michael Johnson

@Ty Downing I hope the information I provided helps. Please keep me updated upon your experience as I would be interested in learning how the different strategies/methods proposed actually work in the field.

@Ty Downing thank you for creating this discussion. I side with the prespective that a lot of others have already provided within this forum; however, I did not hear the obvious/ traditional beginners method/approach mentioned.

That method/approach being: 

1.) obtaining a good deal which equates to me at a minimum of 10-15% (the more the better) below market value based upon CMA (this approach protects you in the case of a slight market downturn)

2.) utilizing the business line of credit of $50k to make the 25% down payment (this down payment helps enhance the profit spread you will be able to collect each month in rent from your tenants minus your mortgage and loan repayment)

3.) Focus upon generating cash flow & actually build lasting wealth. You are ahead of the game in the fact that you have the cash on hand to make the 25% down payment.

**keep in mind that you will need 6 months reserve in your primary residence+ 6 months on your investment property **

@Ned Carey you are absolute correct on a couple different fronts. 1.) There is a limited percentage you can charge the claminant, 2.) Being careful with the business model.

Due to my lack of knowledge in this area and with me being extra conserative, I actually contacted a tax attorney to seek his advice of the feasibility of the business and he informed that I should be careful and do my due diligence upon who is entitled what before proceeding. He also proposed the obstacles of lien holders and existing mortgages. Fortunately within the State of Georgia, the claimant is entitled the money and the bank does not have access to those funds; however, I have not quiet figured out the impact/ obstacle of the lien holder.

From my research the legal documents in which I would need are the following to act and control the business of the recipient:

A.) Power of Attorney Contract

B.) Contract highlighting my Finder's Fee, Transaction Process of funds going to Attorney Office and the law office distributes the funds

@Richard D. Am I forgetting anything?

The biggest roadblock for me was 1.) Understanding how much each claimant is actually owed following the lien holders, 2.) how to identify if tax liens are on the property (I would think if the property has been sold that the bank cleared the title. What do you think?)

 Ned, I kind of stumble across this niche market of tax sale overages. I didn't purchase any of the guru's products, I simply youtube a number of videos to get an understanding of the process. I am a engineer by trade so processes are what I understand best.

After grasping the overall concept I begun to attempt to generate my list of individuals that were entitled money by visiting the court house for the public records of the tax sale. That's when I ran into a road block within the process. So I now had the name of those individuals, but prior to me going on the hunt to find these individuals I needed to understand the following 1.) were these individuals entitled this entire sum reflected in the records and 2.) from a legal perspective, what is the risk of me not getting paid for my services due to tax liens and a existing mortgage through the bank? I guess that's where I needed additional education. 

Ned could you educate me from here? Please advise.

Brent I am looking for 4 Bedroom 3 bath homes in the Athens & Lawrenceville Area. Simply trying to build an empire one house at a time.

I would love to connect and hear a little about your real estate journey.

Brent, I am a little behind the curve. I was simply hunting for these type of properties on the MLS. With the websites purposed, I can definitely be more proactive and successful in securing these type of properties before they hit the main market.

As a new investor certain areas of real estate are appealing; however, the aspect of  low risk, no money down with unlimited opportunity for profit is the most sort after. We all know no area of real estate is completely free; however, the area I am referencing is Tax sale overages.

My questions pertains to the tax sale overage process:

1.) to my experienced investors can you share your story/ journey in the tax sale overage arena?

2.) once you have identified and located the individual through your respective marketing strategy, you convey to them that they are entitled money, then you draft up the legal documents to highlight your finder's fee, obtain the unearned cash and you take your fee and transaction complete.

A.)Is it really that  simple?

B.)If so what is the maximum finder's fee you can receive?

C.) what about the tax lien holders, banks, etc.?

I look forward to your responses? Please advise.

 Cordell, thank you for the advice. I will certainly shop around for small bank financing as well.

Regarding the options to pull equity out of my primary home or take an ELOC from the bank I believe will require that I have 20% equity due to the fact that most banks will only loan 80% of the home value following appraisal. I recently purchase my current home this past October.

My initial strategy was to avoid the huge down payment by satisfying the conventional loan requirement of residing here for a year then finding another property while then renting my current home out.

Tom, thank you for your quick response. I was debating the legal terms of the agreement in which I would require and came up with the following:

1.) To reduce a little bit of my risk of getting bad tenants in the form of non payment, I would require two options:

  A.) two month's rent ($700) up front or

  B.) one month's rent ($350) with parent co-sign the Renting agreement

This particular apartment complex is highly sort after and the $350 per month rate is the lowest rate over the past 3 years. I went into this deal being extra conservative, so my profit margin will be a little better than originally posted.

What  are your thoughts on the risk of additional newer apartment complexes being built in your area which would now serve as  your competition? My thought would be to get an excellent deal in the asking price to cushion against this risk enabling me to lower the rent per tenant over the next 10 years to remain competitive. Your thoughts?

I forgot to include this within my original post, but my reasoning for considering the apartment unit over the single family home to begin with was due to my limited cash on hand to support the needed 20% down on a single family home that is traditionally higher in asking value ( north of $150k ) than apartment units. Please advise