All Forum Posts by: Teren Cooley

@Tim Herman No date has been set for the auction yet.  This particular county just had an auction a couple weeks ago and they only do 2 per year, so they've told me it won't be until the fall at least, but they don't announce the date until about a month before.  The amount of back taxes owed is so high that the current owner has no plans to pay them off before the auction.  Because of this, I've negotiated a very low price relative to the value of the land.  My plan is to close on the property soon, leave the tax debt as is, and try to market and sell it before the auction takes place.  Right now, my margin is large enough that I estimate being able to price it to sell in a short period of time.  Even if I'm wrong about that, in Virginia, you are able to collect tax sale overages, meaning that if the property is auctioned off for more than what is owed in taxes, fees, etc., the owner is entitled to the surplus after the auction.  So if that's the worst case scenario, I'm gonna go ahead and move forward with the deal.  

What I'm really trying to figure out is whether I'll be able to buy this property after it's entered into the collection/auction process with this third party lawyer.  If I'm gonna hit a roadblock there, then a title search/insurance policy would just be a waste of money.  From what I've researched so far I don't think it's gonna be an issue, and I'm in the process of getting as many opinions as possible, but I'd like to be more certain before I move any further.

Thanks for the advice guys.  So generally speaking, liens don't need to be paid off in order to buy a property?  I assume that in this case, where the county has passed the collection case on to a private attorney, that the lien would've been placed by the county?  Or would it be the attorney?  Also, I'm fine with purchasing the property with the lien and owed back taxes then figuring it out with the end buyer if that's possible.  Is there anything that would prevent me from being able to do that other than chain of title issues?  Thanks again!

From my last direct mail campaign I received a signed purchase contract for a piece of vacant land in VA. After a little digging I found out that the property was recently handed over to a law firm for collection efforts and eventual auction due to delinquent taxes. I called the law firm to get more details, but they wouldn't tell me how much is owed on the property. They will only give that information to the property owner. I didn't ask but I'm thinking that they will only accept payment from the owner as well. I recall that being the case from a similar previous experience. They did tell me that the auction won't be for at least 6 months and the property can be reclaimed up until the date of the auction if the back taxes are paid off.

I've already tasked the owner with contacting the law firm and sending me an email with a breakdown of what's owed (I assume along with taxes owed, there are also some fees from the law firm, just not how much to expect)  After I get this, I'll be able to decide if it's gonna be a worthwhile investment.

Assuming I decide to pursue the deal, how should I execute it so that I can finance the owner to pay off their debt without the risk of them taking my money, reclaiming the property, and then deciding not to sell it to me.  Would it be possible to get a signed purchase contract from the seller before paying off the debt via a cashier's check or other form of payment, then moving forward with closing after the property is released?  If anyone has dealt with a similar situation, your input is greatly appreciated.  Thanks!

@Jeffrey Douglas Not exactly business related, but “12 Rules for Life” by Jordan Peterson. Sounds like a self help book, but it’s far from it. More like a collection of psychological theses on the fundamental problems that hold people back from real success. Peterson is one of the most important intellectuals of our time, do yourself a favor and check him out. You can also find thousands of hours of his lectures on YouTube.

My girlfriend and I recently bought a drone (DJI Mavic Air to be specific). She’s big into landscape photography and photo editing and it seemed like the logical next step to really expand her repertoire and open a whole new skill set. Not to mention it’s an extremely fun new toy. Since we bought it, we’ve done a lot of work on our real estate investing business and she’s started her own real estate photography business that’s seen some really positive response even in its infant stages. Through helping her research pricing for photo shoots I’ve found what seems like a huge opportunity for drone shots/footage in the same market. For example, to do a photo shoot for a property you can charge somewhere between $100-300, but for aerial shots and videos, including interior videos you can charge upwards of $500/hr. Seems like an amazing opportunity that I’d like to exploit. Just by owning a drone I feel I already have a foot in the door. Of course, I plan on expanding my skills, but I feel like I can start looking for clients right away, charging much less at the beginning, and learning that way. Anyone out there with their own drone business and some advice for a newbie please share any advice/experience. Thanks!

@Jason D.

It definitely doesn't make sense for someone to sell their property for a small fraction of what it's worth, but that doesn't mean it doesn't happen. If you send out enough direct mail you see all sorts of stuff. Specifically with vacant land, some people own it for a long time, pay the taxes and never use it. These people begin to see it as a burden. Other people quit paying their taxes altogether and face foreclosure. A lot of other people just don't have much invested in their property, because they inherited it rather than bought it. It's not uncommon to see north of 500% ROI if you can buy at the right price.

As for this other property, no I haven't seen it. I live out of state, so I've only seen it on google earth, but I have done plenty of research. I've called several county departments and have a pretty clear picture of exactly what I'm dealing with. As far as comps, I don't have access to the MLS, so I only have what I can find on my own on Zillow, etc. When I get a little further along in the process, I can probably find a realtor to pull comps for me, as I have in other places I've worked, but with such a big margin, I just need to be in the general ballpark.

Now to your last point, there definitely could be something I don't see, but there's always a certain amount of uncertainty.  That's part of the reason I don't want to buy the property outright, rather find a way to find a buyer without fully investing.  I am fairly certain that there is a healthy deal to be had, though, or else I wouldn't be pursuing it at all.

@William C.  Yeah I get what you're saying and I've been told before that the real money lies in land development.  As of right now, I'm nowhere near the point where I could pull off something like that. I'm really just looking to grow my investment capital and pick up some knowledge on the way to bigger more complex deals.

So let's say hypothetically I find a piece of land that the owner will accept 20k for, but I believe the market value to be around 100k, giving me a rough margin of 80k to work with, before closing costs, marketing, etc.  In a hot market, I would think it's reasonable to expect to find someone willing to pay 80k in a relatively short amount of time, still leaving 60k profit, give or take. In your opinion, what would be the best course of action?  Try to get a contract and assign it with a huge assignment fee? Find a hard money lender and double close? Partner with another investor? Or buy and close the property under a finance agreement, then find a buyer?  Any other suggestions? Keep in mind I would be trying to close this deal quicky, without giving up too much margin, so that I could move on to the next deal. Thanks!

@Ayne C.  I feel like he would, he's already agreed to sign an option contract knowing that I plan to find a buyer and assign the contract rather than buy it myself.  I just don't want to do anything shady and get myself into trouble.  I doubt it'll take a year, I'm thinking more like a month or two considering what I feel is a pretty large margin.  Thanks for the reply

@Alan Johnson  Perfect, thanks!

@William C. Yes, this "dirt" is potentially a very good deal. It's just a few miles from Disney and one of the rare vacant lots in the area zoned for single family residential.  The owner is looking to liquidate all his assets and is willing to sell it for what I believe to be a fraction of market value.  To answer your second question, no, I do not plan to build there.  I plan to wholesale the property to someone who is looking to build there however.  The reason I'm not planning to buy it outright is that I don't have enough free capital to do so, which is why I'm trying to figure out a different option. Thanks for your reply