All Forum Posts by: Mike Cartmell

First off, please excuse my ignorance on this matter and thanks in advance.

I have come across a property with a tax lien on it where the owner would like to redeem. He has recently been through a bankruptcy and has horrible credit so he cannot get a loan to cover the lien.

The property is worth around $200k free and clear and the total lien is approximately $5,000. I have attempted to purchase the property but he wants to stay in the house and will not consider a lease back. He really just wants a loan and is open to using the property as collateral.

1. Is this a good candidate for creating a first position note?

2. I have found a copy of our county's standard Deed of Trust form, is this the correct form to use?

Thanks again!

Welcome David and congrats on the REO. I am originally from Abq and often wonder why there isn't more activity on BP from New Mexico.

@Jeff Yang - @Scott Seaman

Scott is correct that you should determine if your site will be on a septic system which will limit the buildable area of your lot.

I work as a Civil Engineer in the Development Services Department in Colorado Springs and I recommend that you contact this department in your area.

Here in my department the process starts with our planners which cover zoning and will determine the type and quantity of structures you can build. After this is determined the application will be run through our engineering department where we cover traffic/access and drainage improvements, then the health department to determine if you have the proper water and wastewater services. There are many reports that must be submitted to these department which include:

Preliminary/Final Drainage Report, Erosion Control & Grading Plan, Water Report, Traffic Study and an Erosion Control Permit will be required if the area of disturbance is greater than 1 acre, which @J Scott mentioned.

If all is good, the project would be taken to the Planning Commission which is technically a public hearing. If nobody is opposed to the project this will likely be a consent item meaning the PC members just okay it without further discussion and the project moves onto the final hearing with our Board of County Commissioners.

Once the project is approved a final plat will be recorded if you are subdividing lots. You would be dealing directly with the Building Department from this point on to obtain your building permit.

I'm oversimplifying the process but those are the general steps. There are many submittal fees that are required with this process that can easily add up to $5,000 or more here in Colorado Springs.

I agree, month to month for low income rentals. For my properties that rent for around 1200-1400/month, I prefer longer leases and so do my tenants who are middle income working class and want a steady home.

Dean Letfus - What terms did you offer to secure your deal at 30k?

Tim G. - Who are you wholesaling these houses to at 80%ARV? Are these landlords?

This is what I have in my lease agreement.

"14. PETS: No pets, birds, fish, or other animals of any kind, permanent or visiting, indoor or outdoor, shall be permitted on the property without prior written consent of Management. Any such pets, if allowed, requires the payment of a refundable pet fee of $_____250______ per pet, plus additional rent of $____25_____ per pet per month (this amount may not be included in paragraph 3 above). In no instance will more than one (1) pet be allowed. Authorized pets must be listed below. By this listing, Resident agrees to be fully liable for damages and injuries to property and/or people, which might be caused by pets. Resident agrees that if said pets should at any time become annoying, bothersome, or in any way a nuisance to neighbors, Resident will, upon notice of Management, immediately remove said pets from the premises. Any unauthorized pets found on the premises shall be removed by Resident and above stated pet fees, retroactively to the date of this Agreement, shall be paid immediately to Management. Only the pets listed below are authorized on premises (name(s) and description(s):
_Teddy an 80 pound golden retriever "

I made an exception with these tenants and made the fee refundable as they were referred to me by a family friend.

Note: I am not an attorney and you should seek legal advice about lease agreeements.

I allow dogs on a case by case basis and charge a $500 non-refundable fee plus $25 dollar pet rent. As Tanya H said, Colorado is a very pet friendly state and I was turning away 80% of potential tenants because they had pets. I had to reconsider and it hasn't been bad since.

I do not allow cats anymore though because I find that cat owners are very hands off and the cat was spraying in the corners of closets that would make the whole house smell. I had to recarpet and use Kilz on the subfloor to remove the smell.

Can't thank you enough for sticking with this thread J. I love when the framing starts and you actually see the structure coming together. I bet the neighbors are happy.

Thanks Brian Gibbons

I understand how options work but was just wondering if you are completely hands off after you have assigned the lease option to the new buyer. Are you basically just the middle man finding a lease option buyer for your seller at a 3% fee of which the seller receives none? I like this strategy if this is the case. Seems much quicker than a short sale.

Thanks again.

I didn't mean to hijack the thread. Sorry Brian Porter

@Brian Gibbons - Can you please explain a little more about your assign for an option release fee?

Is this fee received from the seller or your tenant/buyer that you have found from them?