December 1, 2013 6 PM PST
HELLO Bigger Pockets experts and fellow newbies.
Who do you believe owns this MAVERICK HOUSE? What risk do I run if I purchase the property prior to tax sale and resell it to an investor who can record his title before Tuesday, given the details of this story? Potential profit for a “quickturn back-to-back closing” could be between 30-120K if moved to a cash buyer investor.
I have a situation that I would like some advice on. My objective is to make a purchase offer to this tax-delinquent property owner before the tax sale upcoming this Tuesday 12/3/13. Then I wish to assign my contract to a more experienced real estate investor for a reasonable fee. It’s a little bit convoluted, so bear with me while I lay the foundational information.
Owner of record is an LLC (that was administratively dissolved in 2010) whose sole officer/manager died two years ago (2010) and has a living spouse, with whom I have made amicable contact since last year late November, when the same property was listed for imminent sale last December 2012. It was not sold, for unknown reasons, when I followed up in Jan-Feb 2013.
Tax record indicates taxes haven’t been paid for many years on this parcel. Owner of record was a developer in the area and purchased the vacant lot in 2001 and built this 5BRM/3BA 1415 Sq Ft (with 1415 additional basement/garage) SFR in 2002. No further transfer records for this parcel show on the Assessor's website, since it was purchased by Owner of Record LLC in 2002: however, the "Improvement" of the house, was not added to the assessor’s website until 2012 (was listed as vacant land from 2002-2012, however there is a description of the property detail on the assessor’s website which shows the date of construction of 2002, as well as detailed photos and schematics regarding the building.)
When I researched the parcel and street address, the assessor discovered that the street number that had been originally assigned to this parcel &/or building was incorrect. Furthermore the house was listed as being on the parcel/lot next to it and not on this owner’s parcel at all. The assessor inspected the property two or more times at my request to help me try and figure out what the situation was. Did this tax-delinquent property have a house built on it or was it a vacant lot, and if there was a house involved…what was the correct street number. Well the assessor found out that the house was in fact built on “subject of interests” lot/parcel and he assigned the lot/house a new street number. This was in February/March of 2013 and the new street number is now showing on the Assessor’s website. However, if one tries to search for that street number using Zillow or Trulia or Realtor, they will not be able to find a property for that new address.
How to find out who is the current owner of this house, which is located on subject lot/parcel of interest? That was my question.
In researching the lot next door, it has a multiple transaction history with foreclosures etc. for the same time period, However the Assessor’s website states plainly that this in an unimproved lot, even though it does show improvements from 2003-2011. However on the Assessor’s website Parcel information, there is no pictures or schematic description of this improvement which was valued at over 130K, when the land itself was valued at only 13-25.8K between 2003-2011 and the land value dropped to 10.8K in 2012-2013 and the improvements dropped to zero (which would have indicated a tear down had occurred.) I found this by researching the address listed for the house/lot next door. Obviously a tear down did not occur.
How I discovered that the house next door must belong to my subject of interest lot/parcel:
While on the Assessor’s website accessing the subject of interest property details for Owner of record, I elected to look at the comparables to that house. Low and behold the house next door had been sold in 2012, its street number was only 4 digits different (as in 8523 for subject property and 8527 for alleged house next door)
Then I looked at the description of the sold comp and it was identical to the description of the property detail listed on my subject property.
Current situation, it appears that that house became an REO and the bank or a 3rd party investor is now receiving rent payments from a tenant who has lived there for at least a year. And it is a house that is not located on the parcel next door, but instead is by rights supposed to be listed as on my subject parcel. (which is scheduled to be sold at the upcoming tax sale 12/3/13).
The comps for the subject property from the Assessor’s website were more than a year old, and they ranged from 35K-72K spring of 2012. The foreclosed house (house allegedly next door) sold for 40K back in 2012. The owner of record of the lot next door is an out of state business entity, but the value of that parcel is only 10.8K as it is listed as vacant land, on the assessor’s website.
When I approach the county records, they do not indicate any transfer tax history or liens or real estate history with either the out of state Owner of record of the lot next door or for the deceased subject of interest's LLC by name search.
The county recorder also does not pull up any information by using the book and page information available on the assessor’s website for each of these two property profiles in an effort to track down title for the house.
The LLC's owner/manager's surviving spouse would like to have some financial benefit, although she seems not capable financially to pay the delinquent taxes which are only about 6.5K. However, when I explained that there may be a 3rd party who has in error been assuming ownership rights through some past mortgage mix-up in chain of title, she says she would rather let it go to tax sale than to have anyone get hurt financially by her selling it to an investor that I could bring to the table for her.
She would have taken 1-3K last year to take it off her hands as profit before Dec. 2012 sale. She was completely unaware that the property existed. And that was before I was able to know all the details involved and I didn’t have adequate funds to purchase it even at that low amount. (about 8-10K for what appears to be a potential value of 170-200K) [comps on Trulia for the house, with 4 sales in October 2013 in that range.]
If someone would like to partner with me, we would need to act fast as the Tax Sale is two days away. We would need to help the current surviving spouse see the simplicity of a quit claim deed, and accepting our all cash offer; but we also need to know if we are dealing with someone who actually does have a mortgage on the property or they simply are a bank who is profiting from renting the house that they assumed ownership of, somewhere along the line, and now may have those rights sold out from under them to satisfy the delinquent taxes that are now due. Would a title company or real estate lawyer be the professionals who could iron out the quiet title action?
It seems like a perfect situation to purchase or flip, given that the property seems to be elusive to normal search media and the actual house is still being credited as having a different street address than the one that the Assessor’s office has given it as of this past spring.
I know some of you like complicated situations, so I welcome your input. There should be a way to structure the offer, such that if Clean Title cannot be established, we could back out of the situation with no harm done to anyone.
Is there a possible complication in having the deceased's spouse acquire authority to negotiate business for the LLC? Is it possible to acquire an assignment of rights from the prior owner, after the sale and proceed to redeem the property from the new buyer within the year allowed for redemption in this state?
This property is located in Georgia.
I am multiple states away, so suggestions on competent feet-on-the ground document researchers (if not the title company or attorney) would be appreciated, if needed/recommended.
Darwin Mickelson
From Laguna Hills, CA
