OfflineI was called off of one of my bandit signs. The seller owns a property outright but can no longer afford to keep it up and is tired of trying to rent it. He owes $10k in taxes. I think I can get the property from him for $130k with an ARV of $200k+. There are actually two houses on the property with very little repairs needed. I simply want to get this under contract and assign it to one of my cash buyers. Clearly the seller will be able to pay the tax bill once he sells the property. How do I work this on the Purchase and Sale? How do I manage this deal considering the tax lien? Thanks for your help.
Dave
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Congratulations on getting a deal like this! Depending on what you want to do, I suggest. 2 things:
1) DD- do your own due diligence and check the County to check on total tax liens actually overdue on property.He may owe 10 k or it could even be more. Make sure there are no other liens. Make sure you get the house repairs estimate and consider this in your offer. That way you make an informed decision on your offer. Also your buyer/assignee will appreciate this.
2) Lawyer-have your lawyer draft the purchase agreement to make sure any encumbrances/ liens are settled at closing. You want to consult a lawyer BEFORE creating the deal. Get his inputs now and NOT AFTER the deal.
Another option you can make is to offer below $130k but assuring him you will take care of the tax liens. assuming the tax liens are actually 20k, offer $100k or $110k.
Hopefully this helps Dave.
Let's go investing at the speed of opportunity!
JM
Thanks for the input JM. I have reached out to my lawyer. I'm also looking for some additional thoughts from others please. Here is my original post.
Dave
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I was called off of one of my bandit signs. The seller owns a property outright but can no longer afford to keep it up and is tired of trying to rent it. He owes $10k in taxes. I think I can get the property from him for $130k with an ARV of $200k+. There are actually two houses on the property with very little repairs needed. I simply want to get this under contract and assign it to one of my cash buyers. Clearly the seller will be able to pay the tax bill once he sells the property. How do I work this on the Purchase and Sale? How do I manage this deal considering the tax lien? Thanks for your help.
You can also try a title company. They can run a title search on the property for about $100. Most contracts will have a title clause in it that requires a free and clear title in order to transfer title to the new buyer. Call some local title companies and ask some questions.
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