All Forum Posts by: Joshua Woolls

And yes - out of the thousands I've gone over, I've written down hundreds to make sure that some of them make it to auction, and I aim to win only a small handful of those (or more, if the auction goes well).

From what I understand, the big exception is IRS liens. They stay on the property for 120 days after it is sold. If the IRS does not collect within 120 days, they go away. Also, unpaid water bills after the date of foreclosure, but before the house is bought at auction are not wiped out... Leaky toilets, running faucets could cost hundreds(even thousands) more. I have heard that the city will work with you on these though.

Have you been to the Loveland website to see the upcoming properties? If you are not from Detroit or have not been to Detroit and examined the areas you are looking to buy, i suggest you visit before buying anything. I can honestly say that Detroit has issues unlike any other city in the US. That does not mean that there are not areas worth looking at, but the areas where homes are selling for $500 dollars are probably not going to be those areas.

Let me know if you have questions.

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Originally posted by @Account Closed:

Hey all,

I'm a complete newb to BP and to real estate investing in general, but I've gone through over 10,000 properties scheduled for the 2015 foreclosure and am chugging along quickly. I'm only selecting properties in areas that have experienced growth (or have been highly recommended to me by a local) and that meet specific set of criteria (low back taxes, low property taxes, empty lots, proper zoning for improvement, etc). I'm hoping for a long-term return over the course of 15-20 years and will not need the money any time soon.

@Theodore B., I just need to clarify that I'm reading your comment correctly: the properties sold in the October round of auctions don't have back taxes attached to them? Like, any of the back taxes!? There are some buildings with $100,000+ - does that debt just disappear?

From what I understand, that is correct. If properties do not sell in the September auction, the go back up with a $500 minimum bid and all(with some small exceptions) liens get wiped out. Just a heads up, they recently extended the deadline to may12th for occupants to take care of their back taxes. Many of the homes that are currently listed will not actually go to tax sale.

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Originally posted by @Jerel Garner:

@cierraSeay thank you. since i can't get in contact with the owner. I guess i will have to try my chances at the auction.

The nice thing about buying it at auction is that it basically clears the title of all liens (with some very small exceptions).

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Originally posted by @Jerel Garner:

@cierraSeay thank you. since i can't get in contact with the owner. I guess i will have to try my chances at the auction.

The nice thing about buying it at auction is that it basically clears the title of all liens (with some very small exceptions.

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Originally posted by @Tyler Larsen:

Yes @Joshua Woolls I did find a place thank you very much

Awesome. Good luck!

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Originally posted by @Theodore B.:

Wayne county has their auction in Sept and October, its usually better to wait till October to participate because the prices start at 500 bucks, unless its a bundled sale or a premium property and then the price jumps to the thousands.

I am not really interested in the $500 properties. The ones I am looking for will sell in the first round.

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Does anybody here have any experience with the Wayne county(Detroit) tax auction? There are several properties that I am very interested in. I know that March 31st is the deadline for having payment (or a payment plan) in place. Does this mean that if this has not been taken care of before the 31st that the property is likely to go to auction? How long before the auction will we know what is actually going to be for sale?

I appreciate any help. As a side note, I am not looking for $500 properties that I think I am going to rent for $700 a month. I know the area very well that I am looking at. This is not so much a discussion as to why or why not buy in Detroit as it is about how the process works here specifically.

Thanks!

1 Vote

Originally posted by @J Scott:

Originally posted by :

OK. Simple math test...

Your math test didn't have any questions about risk, equity or liquidity! :-)

Great to have you chime in here. My wife listened to your podcast episode yesterday and she loved it. It made her more excited about real estate than anything else she has listened to and she also told me that it made her realize that I need to quit swinging hammers and we need to pay someone to do it(good for me!).

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Originally posted by @Joe Villeneuve:

@Joshua Woolls

OK. Simple math test. Assuming you are buying a Redford house (HUD), and the house cost you $50k in cash for everything (buy, rehab, etc...). The house was worth about 72k based on sales comps. Also, this house had a rent of $950/month, and the T/I, and PM totaled $350/month...so your CF without debt was $600/month. If you leveraged the house with a refi in 6 months, your monthly payment would be $230/month...so your CF with refi would be $370/month. Here's the multiple choice test:

Q1: If you are not going to refinance, what is your net cash position on the property after the first year?
A - Positive $4,440
B - Positive $7,200
C - Negative $42,800
D - None of the above

Q2: If you leveraged the house in 6 months with a refi, getting all your cash back, what would your net cash position be on the property after the first year?
A - Negative $45,560
B - Positive $5,820
C - Positive $4,440
D - None of the above

Q3: If you didn't leverage the house, using Q1's criteria, how long before you break even with your cash?
A - Immediately
B - Trick question...you're ahead by $5,820 after the 1st year
C - 7 years
D - Trick Question...your're ahead by $7,200 after the 1st year

Q4: If you did leverage the house, using Q2's criteria, how long before you break even with your cash?
A - Immediately
B - 7 years
C - Trick question...you're ahead by $5,820 after the 1st year
D - Trick Question...your're ahead by $7,200 after the 1st year

I'll give you a hint. The answer for all of the above questions is the same letter.

I see it and I understand. I also do not disagree. My biggest issue is that there is more risk with leveraging too high (negative changes in the market have a bigger impact) and you become too dependent on cashflow (unoccupied properties are very painful). That doesn't make them the wrong decision for others, but we are not in a hurry and like the security of knowing that if 50% of our properties are for some reason unoccupied for 2 months, we are still cashflowing. Our intention right now is to borrow about 50% of the equity and use that as leverage to buy/flip and as we accumulate cash, buy more rental properties. In 2 years, we would like to be buying 1 property a month and flipping 10 houses a year, accumulating 2 houses as rentals. Who knows how it will all work, but this seems very doable based on where we are.

And this is not our primary income. I have a great day job that I cannot imagine leaving any time soon. Our real estate is an investment only and does not support our lifestyle. The fact that I have a day job will mean the burden of the real estate will fall primarily on my wife. We need to ramp her up slowly.

Long story short. We are looking for moderate risk at this time and are not trying to expand too fast right now.

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All Forum Posts by: Joshua Woolls

Joshua Woolls has started 8 posts and replied 158 times.

Post: Detroit Current Events

Post: Experience with Wayne County (Detroit) Tax auction?

Post: Experience with Wayne County (Detroit) Tax auction?

Post: Buying a tax lien foreclosure?

Post: Buying a tax lien foreclosure?

Post: Looking for House to Rent in Livonia, Farmington Hills, or Redford Michigan

Post: Experience with Wayne County (Detroit) Tax auction?

Post: Experience with Wayne County (Detroit) Tax auction?

Post: If you were just starting out and had $150,000 to invest in real estate where would you begin?

Post: If you were just starting out and had $150,000 to invest in real estate where would you begin?