All Forum Posts by: Thor Fink

Good question. I don't quite know ALL of the specifics, but these are tax deed/sale properties which:

1) can be redeemed by the former owner for a specific amount of time after the sale, AND

2) anyone with an equitable interest in the property can have the tax sale reversed/undone up to 2 years after it occurs if they can somehow prove they were NEVER notified of the sale prior to it occurring.

Below are some disclaimers/warnings directly from law firms that host the tax sales.

"All sales are without warranty of any kind. Purchasers receive a Sheriff or Constable's deed that is without warranty. Bidders should satisfy themselves concerning title and location of the property and improvements on the property including any encroachments prior to bidding. Neither our firm nor our clients can guarantee the title to any property. The tax sale is an "as is," "where is," and "buyer beware" sale. If you have any questions about specific liens or ownership of the property, you may research the title yourself or through a title company. The judgments in these cases list
the parties included in the tax suit."

"Purchasers at this tax foreclosure sale will receive an ordinary type of Sheriff’s Deed which is WITHOUT WARRANTY, express or implied. Title to property is NOT guaranteed. A policy of title insurance may be difficult to obtain."

"All successful bidders will receive a Sheriff’s Deed within approximately 30 days from the date of the sale. A Sheriff’s Deed is not a Warranty Deed."

"No Title Policy will be provided"

I am looking for lenders who can help finance or refi properties that you cannot typically get title insurance for in the first 6 months up to 2 years in some cases. However, you do get a Sherriff's Deed for the property.

@Lori Williams absolutely!

Thanks for that feedback, @Wayne Brooks! I'll have to explore the quiet title action you referenced.

Totally agree on this! It's just not something I am very familiar with unfortunately. Some attorney consults may be in order, but even then - it still may not be definitive as you stated.

Honestly, all of the nuances regarding the ability for a sale to be retroactively invalidated (Sec 34.08. I believe) is even more of a question mark to me.

I'll have to try and research this as you did. Do I just search for TX appeals decisions that reference Sec. 34.08.? Thanks!

@Timothy Hero thanks for posting. I'll reach out when the time comes.

@Celine Crestin - Please refer to my previous post from a moment ago and it should answer your question. I'll have to explore portfolio loans and private funding, so thanks for the suggestions!

@Ernesto Puig Thanks for the intro. To answer your questions, let's assume there's a 2 year redemption period. The strategy would be BRRRRing tax sale properties for primarily LTR's. The properties would likely be in need of repairs and upgrades, but I would get all "required" repairs done ahead of the refi. Upgrades would have to wait or you risk losing the money spent on them if the property gets redeemed. Hope this helps!

@Kevin Romines The main things I'm aware of are:

1) The former property owner gets up to either a 6 month or 2 year time period to redeem the property and take back ownership. They have to pay extra to get it back of course (I won't get into specifics) and the time period depends on the property and its usage essentially.

2) Anyone who has an equitable interest in the property that can somehow prove they were not notified of the tax sale whatsoever can get the sale reversed/undone up to 2 years after the auction. I am less familiar with this and all the specifics it entails. I have heard that it very rarely ever happens though.

@Effram Barrett yes, that’s my understanding. I mentioned renovations that are absolutely necessary in my earlier post… No value-add would be reimbursable if I’m not mistaken. Apologies for the confusion.

@Bruce Lynn you bring up a lot of great points!

I’ve heard something similar regarding a redemption for a HS and how they don’t have to have the exemption on record to still get the 2 years. A rep from one of the big 3 law firms told me that…

Glad you kept me honest with your response, because I’m really not sure what would be reimbursable if the sale were voided down the road. Fortunately, and as you mentioned, sales rarely get voided/reversed after the fact. I’ll have to explore this further nonetheless.

Thank you @Effram Barrett.

I was referring to the section below which is in Texas's Property Tax Code. Are you familiar with this component of the redemption period? If so, how do you understand or interpret it? I underlined the pertinent parts. @Bruce Lynn feel free to weigh-in here as well.

(2) "Costs" includes:
  (A) the amount reasonably spent by the purchaser for maintaining, preserving, and safekeeping the property, including the cost of:
    (i) property insurance;
    (ii) repairs or improvements required by a local ordinance or building code or by a lease of the property in effect on the date of the sale;

Thanks @Felipe Lois Affini!

I agree it's unlikely anyone can refi tax deeds, but I had to pose the question and challenge the status quo.

Sounds like I need to start figuring out how to raise private capital. I considered doing this in the past, but I wanted to prove myself in some regard first so potential investors could take me more seriously. I still don't quite have a full year of tax deed investing (and RE investing for that matter...) under my belt.

@Bruce Lynn Yes, but I understand we can rehab it to the extent it's in habitable order/up to current code and still recoup that amount plus the penalty percentage of it if it gets redeemed. I guess that still may not necessarily be a refinanceable condition though which would be a concern.

2 years is too long to wait and there has to be some way around it. If not, perhaps one needs to be created...