All Forum Posts by: Sam Bagwell

@Jack Raine

In short, yes.  Once you've completed the barment (foreclosed the right of redemption), then the property is yours, and you can move in, move a tenant in, etc...  

If, though, any of your plans require third-party financing (building, renovating, etc...), you'll still have trouble, since those lenders will require title insurance.  In most cases "marketable" title really equates to "insurable" title.  In some circumstances legal title is a higher standard than "marketable," but in the case of tax deed barments, "marketable" requires the extra step of judicially confirming your legal title by filing the quiet title action.

Georgia is a special animal, and it gets even more niche-y, in that the judgment lien, though having priority, only has priority in the county where it is recorded, even though it is eligible for recording in all counties, so if they plaintiff's lawyer doesn't file statewide, the debtors property in other counties remains unencumbered.

I agree with @Tom Gimer ; check 7 + 3 years in Georgia.  If the lien/judgment is still "live" then it will automatically attach to any real property he acquires.  A lender would likely not agree to be in second position, and so would be unwilling to lend unless/until it is cleared.  I am a real estate litigation attorney in Georgia.  I'm not your attorney.

For future reference, a writ of possession must be executed within 30 days.  If the Sheriff is unable to do so, they have provide an affidavit relating to the delay.  It's cumbersome, but you need to be able to protect yourself in the event your tenant is savvy enough to challenge the execution of the writ.  I am a real estate litigation attorney, including commercial and residential dispossesssories (among many other types of cases).  I am not your attorney.

This is my recurring reminder that granting a tenant the ability to unilaterally "push" funds to you is risky.  If they fall in arrears, and you pursue a dispossessory, they can push funds to you, screenshot the receipt, and have your case dismissed without using their once-in-12-months dismissal.  Make sure that if you intend to stand firm a evict the tenant, your deficiency notice includes a notice that you are disabling unilateral payments as you are not accepting late rent.  I am a real estate litigation attorney, including commercial and residential dispossessory cases.  I am not your attorney.

I am both a tax deed investor, and a tax deed litigation attorney.  Tax deeds can be great, but they are not easy.  You're stuck with the property for a full year, and can't do anything with it during that time.  After the year expires, you must bar/foreclose the right of redemption of all interested parties, not just the tax debtor.  If the tax debtor is dead (and depending on whether he died before or after the tax debt was incurred) things can be more problematic.  Once you've barred the right of redemption, you must still file a quiet title action, since the barment process is not reflected in the deed records, except via a self-serving affidavit.  The quiet title process is also complicated in that most title insurance companies want a full "against all the world" quiet title, rather than the slightly simply "conventional" quiet title.  

Buying in too cheaply can be risky, in that if you incur attorney fees to bar the right of redemption, and an interested party comes forward to redeem, then even with the 20% (or more) redemption period, you may be upside down.

There are also property-specific risks, like HOA dues and limitations. If you end up bidding on "common area" in an HOA, then it may be that literally every other homeowner in the community is an interested party with a right of redemption that must be barred. Further, you must pay HOA dues and assessments while your redemption period runs.

I also hate Fulton County for tax sales, because of their policy of re-selling their tax liens to third parties, who then conduct the tax deed sale, because if a tax appeal is pending of a tax lien that has been sold, often the third party ends up selling a tax deed based on a void tax levy, and untangling that results, best case scenario, in only a refund of your money, but no reimbursement of your time and costs in getting that refund, which can be extensive.

Long story short, they're great investments if you are savvy (or have a savvy team of helpers), but there are landmines along the way for sure.
 

An LLC is a useful first step, both for liability and for accounting. As noted, good insurance is a far better liability protection than the LLC, but I find the LLC useful in keeping my books separate. Anyway, the process of getting up and running as a landlord in Georgia isn't super complicated.

Step 1, form the LLC (done!).

Step 2, open a bank account (you'll need an EIN, which you can get online from the IRS at this link https://sa.www4.irs.gov/modiein/individual/index.jsp.)

Step 3, sign a deed of your property into the LLC. DO NOT USE FORMS YOU FIND ONLINE!!! Different states have different rules, and saving a buck here is stupid. Literally any closing attorney you know will take care of this for you for $150 bucks (I know, because I do this for my clients).

Step 4, If you will be self-managing, get 3 documents ready to go: a lease, a deficiency notice, and a non-renewal letter.  These aren't that hard, and I guarantee that the closing attorney who prepares your deed will be able to prepare these as well, or send you to someone who can. (again, I know this because I do this for my clients)  Eventually you will probably want to get more detailed, but start with the basics.

Step 5, once any necessary renovations are done (that could be its own thread), either start posting ads to get applications, or start interviewing property managers.  If you are going to be significantly cash-flow positive, given that the mortgage is paid off, I'd lean toward hiring a manager.  I've done self-managing, and had managers.  A bad manager made me want to never use one, and self manage everything, and then I found a good manager, and I've never looked back!

Don't be reluctant to talk to attorneys.  The things you need are very formulaic, and most competent real estate attorneys can do these very cheaply, in the hopes that if you ever have a "more expensive" need, that you'll contact them for that, too.

Congrats on getting up and rolling, and best of luck!

 I hope everything goes smoothly.  If we can ever be of any help, please feel free to reach out.

Tagging on to @Account Closed's post, keep in mind that ownership is not the same as voting rights. 51/49 of voting rights in a corp or LLC is fine. A property owner holding 49% is still able to decline to sell (or refi, or anything else), which 100% kills a deal. If you want a democracy, form a company with governing docs outlining voting rights. You can designate equity disbursement terms in a JV agreement, but those don't appear in the deed records. If your buyer (or their lender) requires title insurance, as they should, then you won't be able to sell over the objection of a 49% stakeholder.

Is your lien based on a loan made for the purchase of the property, or a judgment against the debtors for another type of debt.  Both can be foreclosed.  If you are a private lender, does your private security deed have the necessary power of attorney language and waiver of borrower's rights to allow a non-judicial foreclosure?

My first advice would be to speak with the closing attorney who prepared your private finance documents.  If they are not able to handle it, they can provide a referral.  If that fails, feel free to reach out to me or my office.

Best of luck.