All Forum Posts by: G.D. Haizlip

David,

I love your cast-out the "nay-sayers" attitude. I started doing Real Estate Delinquent tAx Sales very similar to how you are starting to Invest in REOs (Bank-Owner/HUDs).

To the point:

#1 Explore the 203K process--as an option or
#2 HML-Hard Money Lenders may also be a viable option

One draw-back you have so far is that you have to buy-a-home that cost at least $50K with the lender you have. With that said, I would encourage you and your team to locate a property that requires very little work on-it, but one that will give you all a reasonable amount of profit depending on what will make you happpy ($5K profit, $10K profit, etc..). My point is that in GA (where I am) there are a number of HUD-Homes well below $50K so if you do not have the capital to buy them out-right, than you will have to finance on the lenders terms.

Another Option: Seek a lender that will allow you all, based on your good-credit, to purchase a home let's say between $15K and up---since it is your first. You can hold-on to the lender that you have, just explore one more financial institution (credit union or bank) that will allow you to finance a HUD-Home for less than $50K. There may be one out here--but you will have to check-around. Sounds Cheap I know, but the point is to get your feet wet first before diving in so deep: Manage Your Risks, Weigh The Cost Invovled (especially since everyone works full-time), and definitely have an Exit Strategy already planned (in-advance).

Now, regarding your next step in this Challenge will be coming up with your EXIT STRATEGY---in which you all are really just challenging yourselves for the fun of it (think of it that way so you can have fun in the process). EXIT STRATEGY----MEANING IF you do not have a way out or a buyer or Investor already line-up to purchase the property after the work is done, you will have to either market it yourself to an individual buyer, or just sell-it to an Investor (which you can still do prior to the work you may plan to do on it), or you will need to hire a Broker/Agent to put it on the MLS for you. Now, keep in mind, you said you are aiming to sell it quickly I presume. If so, you all will still have the mortgage to pay on it, plus the rehabb work (unless you hire a good and REPUTABLE CONTRACTOR) to do the rehabb work for you all. Finding a Buyer or an Investor as soon as possible will undoubtedly determine your PROFIT MARGIN ON YOUR FIRST DEAL, SO I am sure that you will want to know your EXIT STRATEGY. Alternatively, depedning on the location, if it does not sell right-away, you can turn to what I call the "Buy and Hold" Strategy where you can Rent it to someone while you are trying to sell it to a potential buyer.

Side Note: Run a few Free-Ads to build up your "Investor-Buyers" List. Should read something like this: Seeking Buyer or Investor to purchase property with $10K-20K, etc. equity. Your goal here is to just get Investors who have cash to buy. Keep their contact info. for future references and deals you all will have in the future. If someone else contacts you, like a buyer, ask if they are pre-qualified. If not, than determine if you want to deal with them or help them get pre-qualified. If they are, determine if they are interested in the type of property you are offering and go from there.

Hope this helps, but do-not give-up or quit. You are on the right tract and Keep asking questions!

Much Success As You Invest!

Hello Kenyatta,

Your question is a bit interesting, but I will give it a go and hope it helps you.

First, PEMCO, etc. are legal entities/organizations that HUD has legally contracted with to market, advertise, sell, etc. the properties that are assigned to them. Next, because of that alone, they are right regarding the "equitable interest" issue. Now, unless you are the assigned-agent, there MAY be some restrictions on anyone actually marketing or advertising a property as if they are the assiged Broker/Agent. However, you can (not for selling purposes) forward the info. to someone for general information purposes-only.

Take FSBOs for example: If you wanted to advertise them somewhat like PEMCO does for HUD, than your best option or strategy is to do an "Assignment" (a simple one page legal-document) which gives you the "legal right" to advertise, market, and/or sell the property on behalf of a property-owner (in the case of a FSBO sytle of transaction-for example).

Note: If a property is under-contract with a Licensed-Broker or AGent, than you would have to wait until that contract expires with the Agent/Broker to protect your interest, position, or to profit in a FSBO-deal or a property that you may want to market for someone else (e.g., FSBO, Wholesellers, etc.). Just be sure to always ask them for the "right to market, advertise, sell, etc." The Assignment process works much better because you can control the transaction until the expiration date--or renew it if you and the seller are in-agreement with continuing to market it.

Hope this helps you,
Much Success As YOu Invest

Hello N.A.N.A

I know your questions specifically refers to the 3.5 down-payment. Accordingly, you will have to contact the Realty Specialist Assigned to the unit unless HUD has some specific down-payment requirements, in general, for Multi-Family Properties.

You can go to the links below and just pull down an info. pack and see what it says about the required down-payment and other specifics, plus click-on the "properties for sale" link----unless you already have this info., it will also help you regarding MF Units with HUD.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/pd/multifam

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/pd/mfplist

Hope this helps you,
Best Regards & Much Success to You

Hey Josh,

No, I have not experienced any Title Issues to-date; however, I have read a number of credible articles (legal cases) in which some buyers have. Nevertheless, ONE way to avoid some title issues is to (1) know which property or properties you want to bid-on / buy, then

(2) If you plan on working with an Attorney-at-Law or a Title Company---check to see if they can do a preliminary search for you---before bidding. If you have / build a good working relationship with them, then they may not assess/charge a fee if they are certain you are going to bring them your business---then they may charge (depends on your relationship with them and their day-to-day practice).

(3) Note: I took an Online Title Course Training Program from an Experienced Title Search Attorney--which helped me a lot---so now I can do my own preliminary Title Searches. If it looks to complicated at that stage to me, then I may look at another property, but again you connections /contacts may be able to assist you with respect to Titles.

Finally, if you get the opportunity, ask your contacts (regarding Texas Tax Sales) about the impact, if any at all, that liens may have on a Tax Sale Property once, in fact, the Redemption Period Expire. In some states, they are wiped-out anyway--so it becomes a mute/irrelevant point. Ask to be sure or check-out the Statute to verify your thoughts!

Note: You know Texas also has DEEDS as well that can be bought/properties previously offered. My research discovered that these are pretty good deals, BUT because they usually want the Investor to pay all of the back-taxes--it may not be worth it relative to the value of the property. You may already know this, but just know that there still may be some good deals in that area as well. At the Auction, unless the owner of a property is deceased or no longer interested in a property, it may very well get REDEEMED any way. You get the INTEREST no doubt--which is good: By Reinvesting, you will Earn More Money. I call this Earn as You Learn!

Invest Safe--Be Smart---Stay Savvy!

MoneyMakers!

Hello Nikki,

Just wanted to say thanks for your response. Glad to know that you learned a lot on the trip. Well, let me know if you eventually made a buy yet---and how things are going for you.

Remember: There are many great deals out here and I hope you are keeping yourself informed.

As Always, Much Success As You Invest!

Hello Steven,

Below, are a couple of links to help you with respect to "Due Diligence". Cut & Paste the first link, then go to "Standards of Practice--Standard 12).

http://propertytax.utah.gov/
http://propertytax.utah.gov/standards/standard12.pdf

I Hope this helps you.

Best Regards Always & Much Success As You Invest!

Hello Steven,

Opps! See my response below.

Hello Josh,

It is probably difficult to determine if some of the most desirable properties will go for or near Market Value Price or not---having not attended the sale. Here is a strategy that may work for you:

I attended a Sale in GA with the same question in mind. I also wanted to find out for myself if all of the Properties that were being offered were desirable or not. Well, I discovered that the Heavy Players already had determined which properties they were interested-in or going to bid-on. They were not interested in every property on the list. This sale (for your reference) which just took place this Past Tuesday (1st Tues in Nov). had about 800-1000 properties, subject to a one year redemption.

Furthermore, because I had a courtesy list of properties offered at the Sale I was able to go back home and analyze those properties that were Not-Sold/ which received NB-no bids---and learned that there were soooo many GREAT DEALS left on the Table.

So, in short, I guess a desirable property depends on what you like/want to buy at a sale. Some people want properties with improvements, some want vacant lots, or adjacent vacant lots--some want houses they can live-in, etc...

However, since you mentioned California and lots located in desert-like zones, I would say that those are proberly undesirable ones for you. If I may say: You may also want to check-out other counties in California that may have more properties to your liking (those not in desert-like zones)--or try other Tax Deed States as well, or a Tax Lien State where you can at least earn interest on your money and if it (the property) is not redeemed then because you have a "priority" Tax Lien Certificate on that parcel, you can foreclose on-it--getting the property Free & Clear. If that is not your goal, then try a jurisdiction (city/state) where they just hold Tax-Foreclosure Sales (with a shorter redemption period or no redemption at all)

Just remember: There are plenty of Opportunities in this Business:

Let me know if I can be of further help to you.

As Always, Much Success As You Invest!

Hello Rushabh Sheth and et al',

Re: California Revenue & Taxation, Part 6 Tax Sales, Chapter: 1-10, Part 7 Redemption, Part. 7.5 Tax Sale Certificates

After reading the response to your questions (a little later I know) I thought that this may help you to gain a better understanding of the process. Below, is the link to the "complete statute" for California Tax Sales, plus I extracted a portion of it for your review (the section that I believe deals with you question). Because I am not Attorney, I must let you know that this is For Informational Purposes Only---but I think you will be able to validate some of what has already been noted by some of the others here on BP (regarding your question).

Here is the link and the Excerpt:
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=03001-04000&file=3691-3731.1

Excerpt Section 3712:
3712. The deed conveys title to the purchaser free of all
encumbrances of any kind existing before the sale, except:
(a) Any lien for installments of taxes and special assessments, that installments will become payable upon the secured roll after the time of the sale.
(b) The lien for taxes or assessments or other rights of any taxing agency that does not consent to the sale under this chapter.
(c) Liens for special assessments levied upon the property conveyed that were, at the time of the sale under this chapter, not included in the amount necessary to redeem the tax-defaulted property, and, where a taxing agency that collects its own taxes has consented to the sale under this chapter, not included in the amount
required to redeem from sale to the taxing agency.
(d) Easements constituting servitudes upon or burdens to the property; water rights, the record title to which is held separately from the title to the property; and restrictions of record.
(e) Unaccepted, recorded, irrevocable offers of dedication of the property to the public or a public entity for a public purpose, and recorded options of any taxing agency to purchase the property or any
interest therein for a public purpose.
(f) Unpaid assessments under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8, or that are being collected through a foreclosure action pursuant to Part 14 (commencing with Section 8830)
of Division 10 of the Streets and Highways Code. A sale pursuant to this chapter shall not nullify, eliminate, or reduce the amount of a foreclosure judgment pursuant to Part 14 (commencing with Section 8830) of Division 10 of the Streets and Highways Code.
(g) Any federal Internal Revenue Service liens that, pursuant to provisions of federal law, are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date.
(h) Unpaid special taxes under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1
of Division 2 of Title 5 of the Government Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8, or that are being collected through a foreclosure action pursuant to Section
53356.1 of the Government Code. A sale pursuant to this chapter shall not nullify, eliminate, or reduce the amount of a foreclosure judgment pursuant to Section 53356.1 of the Government Code.

Finally, do not hesitate to reply for any further info.

As Always, Much Success As You Invest!

Hello John

Regarding Texas Tax Deed Sales or Texas Tax Sales in General, below is a BP Link that may help you a bit.
http://www.biggerpockets.com/forums/53/topics/54445-texas-real-estate-tax-sales

In addition, Be Patient not Eager: Be Sure to Not Overbid if attending the Public Auction: Know the Value of the Property or its' potential Resale-Value so you won't overbid (this will help you gauge your potential ROI).

Finally, make sure the location is ideal, and if it is a vacant lot---contact zoning to determine if it is a lot that can be developed/rebuildable. If it has an improvement on it, determine if it is occupied or not. If so, you may also have to determine if you want to rent it to the present occupiers/tenants--or file for an eviction, if possible. You may have to check on that point so as to know your rights as the potentially new owner. Some states are Tenant Friendly so you want to know the rules regarding that aspect of the business as well.

Hope this helps you, and as always---
Much Success As You Invest!