All Forum Posts by: Scott Morris

Hello Sherman,

My wife and I have been flipping foreclosures here since 2010. We have added rentals to the mix as well. There is a local REI that meets at the Fuse in Richland.

Welcome to the area Justin.  It is a great place.  This is definitely a sellers market and landlord market.

@Randy Stuart

I've bought many house at Trustee Sale auctions.  This is my usual course of actions leading up to an auction.

I maintain my own list of properties in foreclosure.  It is generated from public county records and updated (cancellations, postponements, opening bids) using Trustee websites.

I generate a weekly list (we have auctions once a week here). I use the county assessment as a starting point for value (county assessment is usually around 5% low here) and the arrears and principal as an estimated opening bid. The properties that appear to have sufficient room in them I go drive and check out. If I can get in I do that and take a look around (sometimes even occupied houses) otherwise I make a guess as to what needs to be done and what it may cost. I plug those numbers into my list which gives me an idea of profits. The numbers are updated when a opening bid is posted by the trustee and if I get a CMA/BPO done on the property. Properties that look promising I start doing research on this is usually a couple days before the auction.

I again use the public county records to make sure that the Deed of Trust (this is what it is called in WA, may be called a mortgage, lien, etc) that is up for auction is in first position, there are no other large liens on the property and that there are no judgments against the owners that may interfere. I also check the county treasurer website to make sure the taxes owed are not out of line. We also have irrigation assessments here that have to be checked. The utility entities (city, commercial) may have unpaid balance that you may be on the hook to pay as well. Finally, unpaid HOA dues may follow the property through foreclosure.

A title report will cover all the items recorded with the county (Deeds of trust, most liens, judgments) but all others (utilities, sometimes taxes, sometimes HOA dues) are on you.

Good Luck and Happy Hunting.

I agree with Chris, the public record will be the best site but you will have to maintain your own list.  

I draw all my initial data from public record (county auditor here in WA).  Updated info I get from Trustee websites (updates on cancellations and auction date changes).  I buy at the Trustee sales and don't touch pre-foreclosures (distressed owner laws in WA are crazy and are a legalistic minefield).

Regards,

Some more info on this.  As Bryan said, it can be complicated.

http://www.reapsweb.com/hoa-foreclosure-auctions-let-the-buyer-beware/?reapsweb/XHhk_(REAPS_-_Real_Estate_Association_of_Puget_Sound)

Awesome, thank you so much!

I've been thinking about this for quite some time. It seems like renting from yourself (or through an entity you own) would be a great way to reduce expenses/taxes overall. Renting from yourself would have a few of advantages over owning:

Depreciation deduction of the property,

Deductions of repairs (this is different than improvements),

Privacy/Risk (you no longer own a property in your own name)

It would have some disadvantages:

Loss of tax protected appreciation when sold (although a 1031 exchange handles that)

The only question remains is this frowned upon (audit risk) by the IRS? Has anyone done this? It seems to me that it is often done in the commercial world. A company buys a large building in a holding entity. Leases out part of it to itself (the other parts are leased to other companies). Why would residential be any different?

I've been thinking about for quite some time, I'm glad I'm not the only one. Renting from your LLC would have a couple of advantages over owning:

Depreciation deduction of the property,

Deductions of repairs (this is different than improvements),

Privacy/Risk (you no longer own a property in your own name)

It would have some disadvantages:

Loss of tax protected appreciation when sold (although a 1031 exchange handles that)

The only question remains is this frowned upon (audit risk) by the IRS?  Has anyone done this?  It seems to me that it is often done in the commercial world.  A company buys a large building in a holding entity.  Leases out part of it to itself (the other parts are leased to other companies).  Why would residential be any different?

hi,  Brad,

Welcome,  I live in kennewick.  My wife and I have been in this real estate market since 2010.  PM me if you have any questions about the local area. 

Regards, 

Scott

Dave,

I just read a blog post from a attorney in Spokane about this subject.  http://rowleylegal.com/2014/12/01/washington-land-trust-not-entity-can-legally-hold-title-real-estate/

The short answer is no.