All Forum Posts by: Thomas B.

I've just finished my 1st tax deed auction in more than a few years. The last one I attended was actually "on" the local Courthouse Steps with a few dozen spectators, maybe 5 actual bidders, and quite a few properties getting no bids at all. 

I am in much better financial place now and ready to transition from spectator to participant; however, the whole process for our county has gone on-line. No problem, just a few more hoops to jump through... or so I thought. 

I should have known better. Every Tom, Dick, and Harry, would be Real Estate Investor from around the country (maybe world-wide) is able to bid on-line, driving up the bidding to astronomical heights! Most of the properties were paid off before hand (probably making under the table offers to the owner) but the others I was bidding on got ran all the way up to full market value. These "out-of-towners" are screwing up the market! 

I live in Corpus Christi, TX... it's no Austin, Houston, or Dallas. Its much more blue collar, industrial, small to mid-sized city. I witnessed the same speculation fueled realestate insanity before the crash of '08 when I lived in Miami, FL. The rural areas for hundreds of miles around were inflated beyond reason by out-of-towners who were largely ignorant of the local economy. "Carpet-Baggers" is the historicaly accurate term for these folk. 

OK... ranting aside; I know this is probably happening all over. Is the Tax Deed Auction angle played out? 

Is there certain paperwork, forms, or format I should submit to the owner (or heirs if deceased) for an offer to clear their property taxes before the auction, in exchange for the deed? Do I need to consult a RE Lawyer to ensure it is all legal?

I am currently stuck with a 60 day waiting period since I just paid off a car loan I made against my TSP. I want to know the best way forward to purchase my 1st rent house as soon as my waiting period is up. The waiting periods between loans would definitely slow me down from buying my 2nd property; however, it is not a deal breaker. What would put me in a bind would be an inability to quickly refinance... say within 6 months to a conventional 30 year loan. There doesn't seem to be any advantage to a cash purchase rather than using the TSP(401K) loan for just a down payment.

I'm trying to navigate my way around the best option to finance my 1st income property. 

I'm looking to invest in small 2/1 or 3/1 single family houses in the lower income neighborhoods of the city where I live. They typical range from 40-75K. I can use my TSP (Fed employee 401K) to loan up to $50,000 at 0.75% interest with a 5 year term.

I plan to rent to Section 8 since the HUD Fair Market Rent for our county is considerably higher than many of comparable units in the area are rented for. There is a lengthy list of applicants and the rent partially guaranteed by Big Brother too.

In the BRRR strategy, at what point would I need to refinance? With a 5 year term, the $849.32 payments are unsustainable for very long. Is there a time period I have to wait after the initial closing before refinancing?

Would there be any advantage to doing this over using my TSP loan for the down payment on a conventional loan?

Thanks Suzie, 

As a Federal Employee, I planned on using a loan from my TSP (like a 401K). The interest rate for the loan is based off the US Treasury Bond rate, which is insanely low right now. Last I checked it is less than 0.7%! A Residential Loan would allow a 15 year term compared to the General Purpose loan's term of 5 years. I could possibly use tis to make a "cash" offer, getting a better deal. IDK. There is a $50K limit on the max I can borrow.

A more conservative move would be to use the TSP loan for the down payment. I plan to be re-approved by the end of the week. The BRRR was my plan before I knew it was an actual thing. For my 1st deal, hopefully it will be light on the rehab. Buy, rent, payoff TSP loan, repeat.

I have been lurking around here on BP for a few years, soaking up all the info I can... but at some point I just gotta jump in and just do it. Having recently turned 40, I have had a fire lit under me to get something going to bring in some side money/ passive income. I want to be able to retire by the time I'm 50 and still able bodied enough to enjoy life. With that end goal in mind, I have 10 years to replace my current income, roughly 5K per month.   

It's a long way to go and a short time to get there; but every journey starts with a single step. I have been looking at some of the older small single family homes in town recently in the neighborhood of 50-70K. Even though they are in lower-income areas, Flippers have been driving the price up on these lately with only cosmetic touchups; however, as a Section 8 rental they should still cash flow nicely, based on HUD Fair Market Rents.

I'm sure I'll have tons of questions as I dive in to all this and look forward to sharing what I find out as well!