All Forum Posts by: Roy Oliphant

In Texas, and that's all of the little I know about this, bankruptcy should pose no risk.  If they file before the auction, the property will not be sold.  If they file after the auction, they no longer own it so it is not relevant to the bankruptcy.

IRS liens against the property may survive the auction.  But again, as Texas is a deed state, only the liens filed before the sale are relevant.

Inspecting a property before the sale is generally not possible.  Most counties state in their auction postings that it is illegal to trespass on a property even if it is posted for sale.  You can drive by and see it from a public roadway but that is one reason why they usually sell at some discount. 

We buy them based on our best guess and once we get them inspected offer them to our investors. PM me if you would like more information on that

@Lee Richter 

Do you have them placed in a park?  If so, how did you overcome the objections to placing a rental MH in the park that they don't control?  Seems a lot of the parks think this is competition to their own rentals.

@David Boykin 

That makes sense.  What is your strategy for monetizing the lots?  We are currently only buying houses for cash flow but there seems to 10 lots for every one house available.

Surely you aren't suggesting buying a property without actually seeing it or having someone look at it for you?!  I have a personal example from this month where the google pics (from 2013) showed a nice looking small brick house (<900 sf) with an addition that should have increased it from a 2 bedroom to a 3 bedroom.  Since the property had a minimum bid for <10K it was very difficult to not buy it even though I had not driven by.

Fortunately, I stuck to my rules.  The house had been severely damaged both by someone removing a large tree from the front and by deconstructing the addition and most of the interior of the original house.  I'd post the before and after pics if I knew how.  My best deal of the year so far was walking away from that one with my money still in my pocket.

We have a property there in the rehab process.  We are excited about the prospects there.  However, military cutbacks due to the Washington budget issues will decimate this area.  And it seems to far to take advantage of the Austin/RoundRock job market.  As you are from the area, what do you think of the distance and traffic issue?

If by 'Lease Option' you mean a Contract for Deed (make payments now for a deed to be delivered at some time in the future) these are 'legal' in Texas. However, if they are for more than 6 months, they are so highly regulated and the penalties for non-compliance are so harsh, a seller would have to be less than informed to write one for any property that the purchaser intends to occupy. For example, missing a single report the seller is required to deliver to the purchaser potentially makes the seller liable for penalties to the purchaser equaling the price of the property.

Good deal if you are 'buying', not so good if you are the seller.

 Finite resource? Peak oil is such a Y2K thing.

Yes people will always need a place to live, but does it have to be in a place where the temperature and humidity both hit 100 for months and the water has already been used by every other big city in the state?

Seriously, Houston is a great place. But it does have its challenges.  After the drilling bust of the early 80's, it was a long time before Houston property values rose in any significant amount.  Houston is no longer a one horse town but when the draft horse (drilling) goes lame the ponies that are left are a little under powered.

Just one man's Humble opinion and poor attempt at pointing out success means always focusing on the REAL part of REI.

@Kristen Sinclair 

Before I would buy a tax lien on a vacant lot, I would want to know how will I get the value out of the lot.  There is not much money to be made in inner-city vegetable gardening but it might be the only way to get something out of the lot. 

If you figure out how to turn them into cash, please let me know.  I am working on the same issue as I'm sure I'm just missing something.  Those lots had owners in the past and that implies value.  Figuring out how to turn them into future value will create a huge opportunity.

@Cal Ewing 

I cant say if you are wasting your time but if you have been seriously attending with the intent and means to purchase for 3 months and have yet to buy anything it may be time to adjust something.

Reasons why you may not be buying:

1) Target property was pulled from the auction

This happens to the majority of good properties, sometimes as late as 10 minutes before the auction starts.  The auction I attended this month had two properties that were still on the list when I left my house but were pulled by the time the auction started.

2) You are bidding but always out bid

You need to evaluate how you are determining you max bid

a) right comps for ARV

b) accurate repair estimates

c) ROI expectations

In other words how are you pricing the deal. This is not really any different from any other REI source but it is very important to get right due to the limited information and time sensitivities of buying at the auction.

I have to say while we regularly buy in multiple counties (4 this month), Harris seems to be especially competitive as are Dallas, Tarrant, Travis and Bexar.  But that is why our investors let us do the hard work and then buy from us.

@Lorilyn B. 

Lots of good answers already but here is my understanding of the rules.

In Texas and for tax sales (these rules are context specific), the property will be considered 'homestead' if it was owner-occupied when the lawsuit was filed whether or not the homestead exemption was claimed. Remember also that an Ag exemption extends the redemption period from 6 months to two years.

The redemption period starts the date the sheriff deed is filed, whether it is filed in the name of a purchaser or a taxing entity as trustee.  The contestability period is two years from the auction date.  The contestability period is just as difficult to overcome for title insurance (and therefore mortgages, etc.) as the redemption period; effectively properties sold at a Texas tax auction will need to mature for two years before title insurance can be obtained.

Struck-off properties may be closer to or even past the redemption and contestability periods and may sometimes be available at less than the original minimum bid amount.  But don't expect to find may gems there.  I just reviewed one list of almost 400 struck-off properties; only 3 of them had houses still standing and 2 of those are in a designated flood-plain.