OfflineHello All,
This is my first big post asking for help. Many of you have seen me on here for quite some time now without a success story thus far. BUT I might have my first deal lining up and I need some advice on what to do next...
Here's the situation. I have found a potentially amazing deal. I found the property by driving by it on the way to my day job. I'd noticed that the property had no activity for months so I called the assessors office and found out that it's in arrears and owes 3 years back taxes. Which means the county can take the property by the end of this year for the taxes which add up to about $12k. (NY has a 3 year redemption period. But I don't know if that means the 3 years of not paying taxes, or is tha 3 years after the county seizes the property?) I also found out on the county clerk's web site that it has no mortgage on it and it's owned outright. So I went to the property and found some postings on the door with the owner's name and corporate entity. I searched him online and after a week, finally got in touch with him.
I'm getting to the part where I need advice...I had left 2 messages at his home explaining that I wanted info on the property at ____ address, and he called me back 5 days later. It was a brief conversation. He sounded very stressed and in a rush. His first question was how I found his company, so I told him it was posted on the property on the permit in the window. He kind of chuckled and said oh. I proceeded to tell him that I was a "local real estate investor who had noticed the property's vacancy and was wondering if he wanted to get rid of the property". He said "oh, um, maybe but I have to show you the house first because it isn't complete". So I said that was fine because I have some partners who are rehabbers, so I am still interested. Then he explained that he had bought the property with the intention of fixing it and selling it, but he got into a nasty divorce and just let it go. He said the work was about 70% done, but I've seen the property and think it's more like 50% because the floors need to be done, there's no kitchen cabinets or appliances, everything needs painting,(I couldn't see the bathrooms, but suspect they're not done either), and there was a notice on the door from the electirc company advising that their lines and box need to be updated. The outside of the house has been completely updated as far as windows, siding and roof. The conversation ended with him saying he would call me "next week to set up a time to see the house because he's too busy right now".
Now I need advice. That conversation was 2 wednesdays ago (it's Saturday), and he didn't call. I did call him once on Tuesday to let him know I was going to be in the area at the end of the week if he was able to show me the house then, but no response. So what do I do? I don't want to be pushy and make him mad, but I was thinking of sending him a letter explaining more about what my intentions are....Is that a good idea? Do I want him to know what I'm offering to do for him? Which is finding him an investor buyer for the property so he can make some $ from the loss of the property vs. losing it and getting nothing if the county takes it. I was also thinking of telling him that we're talking wholesale price not ARV. What should I do? Wait? Send a letter? What would you do? PLEASE I need someone's feedback!
Oh yeah, almost forgot... The ARV of the house is $315k. So my offer would definitely be 50% or less.
Thank you for your time. Sorry this is so long but I wanted everyone to know the details so you can really think of what you would do. I appreciate your insight. Any comments are welcome!
-Allison
Life is full of choices, and these choices become your reality... YOU are in control of your future! YOU decide the direction your life will take. YOU have to make things happen, no one will do it for you!
When opportunity knocks, will you answer?
The reason why he doesn't get back to you right away is perhaps he's not very motivated as of now. He bought that house to fixed it, he might be a seasoned investor and is playing games with you because you might sound so excited while talking. We are now in a Buyers Market, I always think about that everytime I make an offer. Ask him if he still have mortgage and any tax liens even though you already knew it, just to bring up a conversation. Yes, you can send him a letter. Don't be too pushy, he still might be recovering from a nasty divorce. Offer him 50% less minus repairs. Blessings to all. LA
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
Obviously, your excitement is not his excitement. You have done all the right things but you can only do so much. Send a letter indicating that you want to discuss the property but don't go into details as you need to have a house tour first. He has to make the next step as you can't force him to sell. PS - The tax liens for back real estate taxes is probably a tactic to make the house worth less for the divorce proceedings. On the surface that should also tell you something.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
I appreciate your comments. Yes I guess I will write him that letter. Any other suggestions?
Life is full of choices, and these choices become your reality... YOU are in control of your future! YOU decide the direction your life will take. YOU have to make things happen, no one will do it for you!
When opportunity knocks, will you answer?
Dear Allison:
I feel your anxiety and excitement! It’s good your antennae are up, your radar is working, and
you’re detecting deals. I’m glad for you! Don’t stop! Keep up the good work!
Areas of concern I would have are:
3yr tax arrearage (back taxes)
3yr redemption period
outstanding liens
divorce
corporation
Three years of back taxes without a tax sale seems a little long to me. Tax sales commonly take place long before the passage of three years.
Question?: If there hasn’t been a tax sale, why hasn’t
there been a tax sale?
Question?: If there has been a tax sale and the property
wasn’t sold, why wasn’t it sold?
Didn’t anybody know about the tax sale? (I suppose
that’s possible.)
Didn’t any body want the property? If not, why not?
“Three year redemption period” generally means that the delinquent taxpayer/property owner has 3 years, from the date the property is sold at the tax sale, to “redeem” the property, i.e., to get the
property back. For example:
Let’s say, on 1/1/11 the property owned by “John Delinquent Taxpayer” was sold at a tax sale to “Jane Tax Sale Purchaser”. “John Delinquent Taxpayer” then has 3 years, until 1/1/14, to “redeem” his property, i.e., to get his property back. John has a redemptive right to get his property back.
Question? What does John have to do to get his property back?
Answer: Generally, pay Jane.
Question? How much?
Answer: At least the amount Jane paid at the tax sale (?).
Possibly some interest (?); possibly costs Jane paid
for improvements made to the property(?); possibly other
costs, fees and expenses incurred by Jane(?).
Question: If John redeems, can Jane still make a profit?
Answer: Jane has to determine the answers to these questions to see.
Point is, Jane should know the answers to these questions, absolutely and positively, "before" purchasing the property!!!
Also, Jane should consider the viewpoint of the investor. If Jane is buying the property to re-sell or assign it to “Tom and Sally Investor”, how will “Tom and Sally Investor” look at this three year period? Would they want to deal with it or would they rather put their money into “several”
other deals during that same three year period whose outcome is far more certain and profitable?
Outstanding liens? John did some rehab work on the property (about 50%-70%.) does he owe anybody any money in connection with that? Any contractors, suppliers etc? Do any contractors, suppliers etc. have any liens on the property? Even if there’s no mortgage on the property, there may still be liens against the property. If there are liens against the property,
they’ll have to be paid.
Divorce. Does divorced wife own any interest in the property? If so, her signature will be required. She might want to get paid.
Corporation. Same thing: Does corporation own any interest in the property? If so, its signature will be required. It might want to get paid.
Allison, I’ve only briefly touched upon these areas of concern. I’ve tried to give you some idea of some of the kinds of questions they raise. When you determine and verify the answers, deciding your next step should be a little clearer and easier.
I wish I could write more, but there’s just too much to cover in a single writing. Even this has taken much longer than I anticipated. If you can figure out a way we could talk, I’d be more than happy to talk to you, at length, to help you. (I don't know how to make further contact with you. My computer skills are limited, This is my first time doing a “post”, and I’m not sure I’m doing it right. I hope you get it.)
bsnave
P.S. I "Previewed" this message, and the formatting is terrible. I tried to correct it, but I couldn't. I'm sorry. I hope you can read it
There is this great property right across the street from my house its been on the market for 4 months. The current owner brought this property as a foreclosure and had remodel it and its just great. They real estate company he is working with just can't get people to clear due to income or credit. Asking price 65,000 it appraisal is 76,000. Another deal just fell through I would love to get the property and turn it over as lease with option to but after reading chapter 3. I already read the first 9 chapter this evening but my delima I have no money and my credit it crazy. How do I make this happen and saw gregs video and thought it was wonderful my question is what does it mean to "buy on contract" no bank loan and no money down?
I am so ready to do this and submit my first video by June 1st!
Let's keep it moving!
Thanks
Faye
You may want to post your question in another forum so that it gets more attention, or post your own topic. But to answer your question I believe you're reference to buying "on contract" just means buying directly from the owner....no banks or realtors involved. Just a purchase from them to you either with seller financing, or lease option. "No banks" is obviously no traditional mortgage financing, instead the seller would hold the note. And no money down could either be negotiated (which doesn't sound very likely to me if you're purchasing for yourself, but there may be someone on here who's done it.), or if you do an assignment you have the buyer pay the $ down (escrow), or if you do a sandwich lease option the $ can come from the end buyer that you lease to. If I've learned correctly, that's how it can happen. It has a lot to do with how you structure the deal and use your contracts.
Huge disclaimer: I still haven't done my first deal so I don't speak from experience. However I've been on this site for over 6 months now and have learned a lot. If anyone needs to correct something I said feel free!
Best of luck to you!
Life is full of choices, and these choices become your reality... YOU are in control of your future! YOU decide the direction your life will take. YOU have to make things happen, no one will do it for you!
When opportunity knocks, will you answer?
That's how it usually works, and the seller pays for back taxes, too. The rest of the $ is their profit.
I feel your anxiety and excitement! It’s good your antennae are up, your radar is working, and
you’re detecting deals. I’m glad for you! Don’t stop! Keep up the good work!
Areas of concern I would have are:
3yr tax arrearage (back taxes)
3yr redemption period
outstanding liens
divorce
corporation
Three years of back taxes without a tax sale seems a little long to me. Tax sales commonly take place long before the passage of three years.
Question?: If there hasn’t been a tax sale, why hasn’t
there been a tax sale?
Question?: If there has been a tax sale and the property
wasn’t sold, why wasn’t it sold?
Didn’t anybody know about the tax sale? (I suppose
that’s possible.)
Didn’t any body want the property? If not, why not?
“Three year redemption period” generally means that the delinquent taxpayer/property owner has 3 years, from the date the property is sold at the tax sale, to “redeem” the property, i.e., to get the
property back. For example:
Let’s say, on 1/1/11 the property owned by “John Delinquent Taxpayer” was sold at a tax sale to “Jane Tax Sale Purchaser”. “John Delinquent Taxpayer” then has 3 years, until 1/1/14, to “redeem” his property, i.e., to get his property back. John has a redemptive right to get his property back.
Question? What does John have to do to get his property back?
Answer: Generally, pay Jane.
Question? How much?
Answer: At least the amount Jane paid at the tax sale (?).
Possibly some interest (?); possibly costs Jane paid
for improvements made to the property(?); possibly other
costs, fees and expenses incurred by Jane(?).
Question: If John redeems, can Jane still make a profit?
Answer: Jane has to determine the answers to these questions to see.
Point is, Jane should know the answers to these questions, absolutely and positively, "before" purchasing the property!!!
Also, Jane should consider the viewpoint of the investor. If Jane is buying the property to re-sell or assign it to “Tom and Sally Investor”, how will “Tom and Sally Investor” look at this three year period? Would they want to deal with it or would they rather put their money into “several”
other deals during that same three year period whose outcome is far more certain and profitable?
Outstanding liens? John did some rehab work on the property (about 50%-70%.) does he owe anybody any money in connection with that? Any contractors, suppliers etc? Do any contractors, suppliers etc. have any liens on the property? Even if there’s no mortgage on the property, there may still be liens against the property. If there are liens against the property,
they’ll have to be paid.
Divorce. Does divorced wife own any interest in the property? If so, her signature will be required. She might want to get paid.
Corporation. Same thing: Does corporation own any interest in the property? If so, its signature will be required. It might want to get paid.
Allison, I’ve only briefly touched upon these areas of concern. I’ve tried to give you some idea of some of the kinds of questions they raise. When you determine and verify the answers, deciding your next step should be a little clearer and easier.
I wish I could write more, but there’s just too much to cover in a single writing. Even this has taken much longer than I anticipated. If you can figure out a way we could talk, I’d be more than happy to talk to you, at length, to help you. (I don't know how to make further contact with you. My computer skills are limited, This is my first time doing a “post”, and I’m not sure I’m doing it right. I hope you get it.)
bsnave
P.S. I "Previewed" this message, and the formatting is terrible. I tried to correct it, but I couldn't. I'm sorry. I hope you can read it
Allison,
If the property owner contacts you, let him name the price first. By then you will already know what your maximum offer is.
I would not call him-he has your contact info. Let him do the talking... there's probably a lot more to know about that property.
Wishing you success,
Valerie
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
He's definetly not motivated, and that's probably because he still owes the taxes, and he'll still have to pay them. I'd wait and buy the property at auction, if I had the money, or I would move on.
You need to check if yours is a state where you can buy a tax lien certifcate on the house. You may be able to buy a tax lien against the house and get it for just what is owed in back taxes.
Rick Allison, Realtor
Amarillo, Texas USA
Find comps, private lenders and cash buyers nationwide: www.TheRealEstate.PRO
Foreclosure and pre-foreclosure search engine: http://tinyurl.com/b6w7h6o
The People Helping People Movement: www.greatEPXsite.NET
I'm very disappointed by now. It seems that this may not happen. I just don't understand why someone who is going to lose something and get nothing out of it wouldn't look into getting some money by selling it
Life is full of choices, and these choices become your reality... YOU are in control of your future! YOU decide the direction your life will take. YOU have to make things happen, no one will do it for you!
When opportunity knocks, will you answer?
Move onto the next one that isnt too much of a time waster like this one.
If you would have pursued it, it would be a headache and time and resource drainer.
Allison,
Don't be disappointed. Re-read your own signature. He has a choice! You GAVE him one, but it's up to HIM to change his circumstances. But we never truly know what's going on in someone elses life.
Deal or No Deal.....Nothing is ever wasted as long as we don't waste it. Look how much you have learned through this whole thing. Be proud of yourself and get back out there looking for the next!
Keep your head up! Keep taking action! The results will come!
God bless my friend,
Jen
You only want to deal with MOTIVATED sellers and I believe at this point he is not a MOTIVATED seller spool what do you do ....move on as elix suggested.like they said above....your radar is on and you are getting in the game.use patience but determination.keep looking for another deal.keep a few irons in the fire.look for vacant houses.did you put up any bandit signs????? Go to the courthouse and look up lis
pendens. Stay hungry for your first deal.......it will happen.keep looking and you will find a good deal.!! Remember....peoples needs and wants change day by day.If you hound him on a not so great deal then you become the MOTIVATED buyer and this is not what you want to portray to him.heck he may call YOU in a week or Mnth and pester you to buy.like epic says ........spend your valuable time on finding the next one.
Jay
Click Here For homepage www.jaysthilaire.com
need to sell ? http://www.jayhousebuyers.com
Need me to FINANCE a home ? http://www.jaysrenttoown.com
CHECK OUT MY JOURNAL http://www.deangraziosi.com/real-estate-forums/investing-journals/20063/...
I love it! You're right on the money.
Allison, don't make it look like you're the motivated buyer. Let him come to you. If he does, great. If not, it's ok. You will get you a deal, just keep going. In fact, I have a motivated landlord that owns a couple cashcows in the same town I live in. He keeps dropping the price on both, and blowing up my email every few days. He's been doing that for the last week or 2, ever since I showed interest in both (which have good renters who pay ontime every month).
What I'm saying is, don't waste your time on this if it's not producing any fruit.
pendens. Stay hungry for your first deal.......it will happen.keep looking and you will find a good deal.!! Remember....peoples needs and wants change day by day.If you hound him on a not so great deal then you become the MOTIVATED buyer and this is not what you want to portray to him.heck he may call YOU in a week or Mnth and pester you to buy.like epic says ........spend your valuable time on finding the next one.
Jay
just remember these two rules:
1)it is not against the law to be stupid.
2)95% of all people will act in a stupid fashion.
The first rule is easy to understand. The second rule is a function of our innate psychological state. As people we are prepared to make decision between good and bad; we aren't programmed to make decisions between bad and worse. A lot of people just can't let go of their house even though it is eating them alive. Therefore, we generally make poor decisions in a declining market. While this precept is rather new as applied to housing, this concept has been proven over and over in the stock market as people just hang on to a losing stock longer than common sense would dictate.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Can I have your autograph??
I know you guys are right. I will move on. I really appreciate the advice. It's just hard to walk away from something you know is good for everyone involved. And I really need a deal to come through. My husband is giving me an ultimatum to either get this done by next month or I have to get another job because we need the money. I'm unfortunately running out of time and I don't have enough time to myself as it is to do much more than I'm doing already. But I will try. (I wish sleep was optional.)
My best wishes to all my fellow DGers!
Allison
Life is full of choices, and these choices become your reality... YOU are in control of your future! YOU decide the direction your life will take. YOU have to make things happen, no one will do it for you!
When opportunity knocks, will you answer?
Allison, even if you have to get a 9-5 you can still do this on the side. Dont ever give up!
Richie
I understand the "ultimatum" thing...but keep this in mind...while I do other things, I made the decision to do REI. My wife is the most important thing in the World to me...but my Father told me a LONG time ago, usually the person who "makes you" make a choice, loses. You WILL get your first "deal" done...just go after a simple assignment and bring a check home...that is what I did and now Mrs. Lubin is wondering when the next one from the "Real Estate Thing" is coming in. Once they see a CHECK...whether for $20 or $20,000, they will jump on board. Get him involved. Ask him to come look at one with you and ask his advice. Tell him the numbers, the potential...he will come around.
Try this, find someone who rents houses in the paper or by a sign, call them, find them a house and assign it for $500...it will work and you will have the first deal done, and support behind you.
God Bless!
Jon A. Lubin
Investment Properties Group L.L.C.
Birmingham, Al.
www.connectedinvestors.com/investmentpropertiesgroup
"You Miss 100% of the Shots You Don't Take" Wayne Gretsky
Nobody says you have to get a 9-5 job -> It can even be part-time as long as it meets the budget you have. He just wants to see extra $ coming in, that's all. And when you have a family to support, it's another thing. Sometimes, we do what we do to keep our relationships & family happy. And yes, you can still do rei even if you have a FT or PT job. I'm trying it with a Fulltime job, working from 3p to 11:30p (rough 2nd shift, I know). Never give up on your dreams, and try to include him on everything if he's interested. One day he'll come around, as my x was that way.
My best wishes to all my fellow DGers!
Allison