All Forum Posts by: Scott Morris

Bernie,

Welcome to Bigger Pockets.  I'm from Kennewick.  

The answer to your question is as with many things it depends (on goals, level of risk, etc.)  It sounds like you are just starting out and working on building a portfolio.  Have you read the Ultimate Beginners Guide yet?  

Regards,

Scott

I often have to look up the deed of trust referred to by the notice of auction.  You have several ways to verify the proper property.  In the end it is best to contact the trustee and point out the error.   Technically,  if they screwed up the notice the auction could be called into question by the owner.   Why do you think the property is 2 Rockwood Trail? I don't see that anywhere in the notice.  If everything is pointing at a different property...

Comps.

The lenders/appraisers will usually value based on comps on 1-4 units. They don't usually use NOI and cap rate until you are into commercial loan space. Even if you get a commercial loan they can use the comp method for the 1-4 units.

Although, it is easier to use NOI and cap rate it is not what is important. You need to know what you can get a loan for or what you can sell it for (and then what the buyer can get a loan for).

Regards,

Scott

It sounds like the property is still owned by the couple in GA.  The servicers will not talk with you until you have a signed authorization from the owners.  Your only hope at this point is getting the owners to work with you.  If you have an address for the owners you can try searching for phone number there using white pages.  Another method I have used is to find phone numbers for their neighbors of their current residence and calling them to see if you can get a phone number for the owners or have them give your number to the owners.  You could also hire some one to go in person to contact the owners.  

REO agents do not come into play quite yet. They will be involved once the property goes through the foreclosure process and is owned by the bank. The bank will sometimes send out crews to secure the property even if they do not own it yet. Typically, these crews will leave some sort of notice at the property (stickers on the door or windows) that they were there and some contact information. They will not be able to help other than to tell you who sent them out there.

Finding, contacting and working with owners of vacant property can be very challenging.  Good Luck!

Regards,

Scott Morris

Does anyone have a status website for Clear Recon Corp Trustee auctions? I'm trying to maintain my list of NTS properties and opening bids but haven't been able to find a website that they post auction details onto.  I have the filed NTS but often the auction date changes and they post an opening bid and other information to a website like Northwest Trustee Services does at  www.usa-foreclosure.com.  

Clear Recon Corp.

9311 S.E. 36th Street, Suite100

Mercer Island, WA 98040

Regards,

Scott

Your local permitting office should be able tell you if it was permitted.  

If it wasn't then you are in the right spot to get the permit.  

Regards,

Scott

You can take several paths on this.

Although, I am not opposed to talking about my REI business including profits, expenses and most importantly risks a lot of times people are just curious. You could answer with another question "Why do you ask?" or "Why are you interested in that?".

Most non-investors simply don't understand the expenses involved in investing nor do they understand the risks involved.  For instance when I am looking at foreclosure auctions I don't even begin to investigate a property unless there is at least 20% or $25K profit.  But the risks involved with foreclosure auctions are pretty high and I need that headroom to make up for any unseen problems.  Non-investors simply don't understand the business but are intrigued by the large numbers.  Discussing profits without the context of risks and business models may lead to a distorted view.

I would recommend not having profit discussion with complete strangers.  Once you know them and educate them in investing then you can discuss profits, expenses and risk.

Regards,

Scott

@Jay Hinrichs:

So Oregon has a similar law?

Dan,

I've bought several house in WA at Trustee Auction (auctions at the court house steps).  If that is the type of auction you are targeting you may need to rethink your strategy.  In all the trustee auctions I've been to here in WA the full purchase price was required to be paid that day.  In fact the auctioneer would pre-qualify bidders by reviewing the cash or cash equivalents the bidder had prior to the auction.

Now auctions of owned property may not have the same requirement.  Auctioning of REOs and other owned properties you may be allowed 30 days to setup the financing.

Things to check:

Liens, back taxes, unpaid utilities, if the property is occupied you need to have a strategy for that (not sure if you want a tenet, if not you need a lawyer for the eviction or try a cash for keys), you won't have it in Seattle but on the east side of WA you have irrigation assessments.

The IRS lien is rather a right of redemption:

The right of the United States of America to redeem the property, if applicable under Federal law

They get 120 days from the date of transfer to redeem the property. That means that if the IRS so chooses they can force you to sell the property to them.  The sale price would be the price you purchased it for plus any taxes or liens you paid.  They will not pay market value nor will they pay for any improvements you made.

I've bought 2 properties at auction that had IRS liens.  In both cases the IRS never redeemed the properties.  I also waited a major portion of the 120 day before I started any improvements.

If you can't sleep some night you can read the IRS code on this:

5.12 Federal Tax Liens

http://www.irs.gov/irm/part5/

And the Redemption part

http://www.irs.gov/irm/part5/irm_05-012-005.html

Regards,

Scott