All Forum Posts by: Roy Oliphant

@Sarah T.

Not being a lawyer or an accountant, please take this opinion as just that.

You may be confused by attempting to use the same entity for both you as the RE Agent and you as the RE Investor. While not strictly necessary, if I were in this scenario I would have two separate entities. The Texas SOS site says you may use an LLC as a licensed Agent. This should not need a Broker of Record as this entity would never be the Broker on a deal and would just be the payee of the actual broker when you earn commissions.

Your RE Investor entity will be the purchaser / seller on specific real estate transactions and thus as it has an ownership interest is not involved in the transaction as a representative of another person or entity and does not need a real estate license or Broker of Record. (Some may interpret corporation law to mean that you as an individual could not perform the search for and marketing of real estate for this Investor entity unless you are a licensed agent or a W2 employee. I believe this less likely in an LLC than with a standard corporation.)

Net when you are working as an agent, even for your own investment, your income, expenses and liability belong to your agent LLC. and when you are owning, rehabbing, renting or exiting the investment properties, these belong in the investment LLC.

A long winded way of saying you need to get professional help to do this correctly.

@Hersh M.

I agree in the large cities it doesn't have much affect.  Certain communities such as Midland or Odessa are seeing a measurable slow down in growth and, IMHO, will see a decline if energy prices stay at or below current levels.

@Ashley Pitre

You do not actually have to wait 2 years to sell, but since it will most likely be that long before you can get a clear title policy, you will be very restricted to what buyers will be interested.  The two year period is based on redemption (either 180 days or 2 years from the time the sheriff's deed is registered) and contestability rights (at least 2 years from the date of the sheriff's sale). 

Since a lot of vacant land is on the struck off or re-sale list, you may find what you are looking for where the sheriff's sale and deed dates were some time in the past resulting in a shorter (sometimes even none) period you have to be concerned about. 

@AW Eilers

I wouldn't worry so much about them jacking up the price after the auction. At the auction, the bank can bid up to the full value of the outstanding mortgage balance without spending any of their money. If no one else is bidding, it means the auction value is something less than the mortgage value. After the foreclosure auction, it becomes an REO and while they may try to sell it for more than the foreclosure amount, the market will still determine if that is possible Because foreclosures can happen so quickly in Texas, it may be easier for the bank to just automatically bid the balance at the auction and then decide how they want to deal with the property later.

@Mike Chubb

Trying to parse the scenario:

3 properties, 2 owners, Overdue taxes on a major rehab, the total deal will cost at least 5 times the cash you have available and you have no credit? 

One question: what will the property be worth once the rehab is complete? You mentioned it will take about $120K to do the deal.  Unless the house will be worth more than $170K when finished, you will have a hard time getting an investor interested in helping with this.

@AW Eilers

September 1, Sheriff's Sale on a house with no liens and the owner died with no heirs?  Sounds like a Tax Sale.  You will need to be prepared to ay for this the day of the auction.  Some counties expect you to pay immediately, some will give you a couple of hours to get a cashier's check.

@Rhett P.

On the thread topic, I read a book on the topic about 10 years before hand but didn't find anything in my county to buy.  Finally decided I needed to get serious about it and started attending auctions in other counties.  It was about 5 months before I actually bought a property to participate in.  Still too early to tell how well we did but if it doesn't get redeemed  I expect to exceed 20% ACOC.  Most of the non-redeemed properties we do in Texas return over 12% ACOC. 

@Todd McLochlin

Not to hijack the thread but how do you deal with the possession issue in GA where you get a redeemable ownership interest but no right of possession until the redemption period is over?

@Mark S.

Texas is indeed a Tax Deed state. I believe Quest is purely a custodian for self-directed IRA's. They have experience with several companies that support real estate focused investing strategies. I do not invest with them but have heard good things from some folks who do.

@Ashley Pitre

On your #2  NEVER buy a property just from the google pics but always make sure you check them out.  Properties can change a lot in short time so you don't know what has happened since the pic was taken without doing a drive by.  Still it is good to know what it looked like at some point in the past.

3) You MUST do a title search and lien check.  Since there are a few liens that survive and you never know who owned it and it may point out if there are potential EPA issues.

4) You need to discover the amount of Post Judgment Taxes you are signing up for.  There may be 2 or mores years worth of taxes due in addition to those covered by the tax sale.

5) Can you cover the carry cost for the property or a long lead time until you can resell it.  Since you cannot usually get a title policy for two year from the original tax sale, you need to be prepared to hold it at least that long.  And there is not much revenue possibility on vacant land all though on 61 acres there may be some ag uses.

6) Investigate the valuation as much as possible.  Properties are on the struck off list usually only because they are not worth the amount owed.  There are a few true deals and some that your idea for value improvement may be better than someone else. But most of these properties are deals only when the minimum bid gets reduced.