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#1
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Thinking about another distressed property...
I've found another distressed property we're interested in...but I have a question.
The property is currently 3 years behind on taxes...to the tune of about $3k, and the adjacent property, which is part of the sale, is also behind by about $1500. If I buy the property, am I held responsible for the back taxes, or is that on the seller? We've picked up 3 distressed properties in the last year, and have them generating an income that will pay for the purchase within 1.5 years...but they were all paid up on their taxes. We're going to look at this property later today. It sold in 2006 for $63k and has a selling price of $27k. It's a larger home, converted into a triplex, and should bring in about $400 per month, per unit. I'm looking at a ROI of roughly 2 years, providing I get good renters.
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1987 560SL 85,000 miles Meet on the level, leave on the square. Great words to live by Were we directed from Washington when to sow and when to reap, we should soon want bread. - Thomas Jefferson: Autobiography, 1821.
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#2
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i've always thought that taxes have to be current to transfer,but i'm not a real estate guru so don't take my word for it.
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#3
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Usually, taxes have to be current, but it's between buyer and seller on how to make that happen. Is their an agent involved? He or she should know. If not I'd say a call to your title company, if your state has them, or to the county would answer the question.
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You're a daisy if you do. __________________________________ 84 Euro 240D 4spd. 220.5k sold 04 Honda Element AWD 1985 F150 XLT 4x4, 351W with 270k miles, hay hauler 1997 Suzuki Sidekick 4x4 1993 Toyota 4wd Pickup 226K and counting |
#4
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In Texas, the land is forfeit if taxes are due no matter who owns it. The state blocks the title transfer until all taxes are paid, and in many cases confiscates the land during the sale process if it looks like no one is going to pay up, which is how the buyer gets burned. It goes like this: You write a check for the land, the state takes the land during the title transfer process, and the seller is in Costa Rica with your money.
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#5
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Thanks.
Now I know what to deal...
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1987 560SL 85,000 miles Meet on the level, leave on the square. Great words to live by Were we directed from Washington when to sow and when to reap, we should soon want bread. - Thomas Jefferson: Autobiography, 1821.
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#6
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The very short indicated return on investment on properties in your area are the best I have ever seen with real estate. Unless you have hit a series of flukes.
What is troubling to me is I can underside some downside potential in owning property living up here in Canada .To actually have see it happen around you must be almost unbelievable. The drops in values are far greater than small market corrections. Potentially it could happen here as well at some point. It once did in the dirty thirties I understand. Correction of costs at closing for existing back taxes I expect is an alternative or at least might be up here. |
#7
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Call the local real estate tax folks and see what they say.
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1985 300D 198K sold 1982 300D 202K 1989 300E 125K 1992 940T "If you dont have time to do it safely, you dont have time to do it" "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." |
#8
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Your goal is to have a clear title on these properties at the time that the deed is transferred into your name. Back taxes should be addressed at or before the time of the sale. If the current property owner doesn't have sufficient cash to address it prior to sale, then an amount sufficient to address the arrearage should be escrowed at the time of sale (deducted from the sales price) and the arrearage should be addressed at the time the deed is transferred into your name.
You should also confirm that no liens are on the property due to delinquency on utility payments (often delinquent sewer system use payments are the culprit). See if you can secure the tax map or tax assessment numbers for these parcels. |
#9
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Quote:
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http://i680.photobucket.com/albums/v...7/scotflag.gif http://i680.photobucket.com/albums/v.../scot2flag.gif "If women are so bloody perfect at multitasking how come they can't have a headache and sex at the same time?" Billy Connolly |
#10
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Quote:
To amplify on it a bit, normally a title insurance policy will take care of all this in most states. The preliminary report will report the status of unpaid taxes, and any and all liens that could attach to the seller or the land in question. As well as easements and other things that are relevant to a purchaser and/or borrower. Buying title insurance thus shifts the risk of loss to the issuing carrier, as with any kind of insurance. On the actual morning of closing, a title insurance agent typically does a "run to date" (last second recordscheck)' from the County Courthouse to look for any "last second" liens or any other document that got recorded and affect the property's status, and any updates to the property's status. Then the actual title policy is issued. There may be exclusions for forged signatures, etc. and things az title search could not detect. Which is why is is good to read your title policy. Once it is good to go, escrow then closes, and your deed and concurrent mortgage(s) - if any - get recorded then and there at the Courthouse. YMMV but these are my recollections from the days when I worked for title companies, and then after that, at the CountyRecorder later, as an employee of the City and County of San Francisco.
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1991 560 SEC AMG, 199k <---- 300 hp 10:1 ECE euro HV ... 1995 E 420, 170k "The Red Plum" (sold) 2015 BMW 535i xdrive awd Stage 1 DINAN, 6k, <----364 hp 1967 Mercury Cougar, 49k 2013 Jaguar XF, 20k <----340 hp Supercharged, All Wheel Drive (sold) |
#11
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Quote:
The property needs a number of small things dealt with, such as gutters repaired, walls painted, storm doors replaced, but nothing that 2 weekends of sweat can't take care of. My wife and I are going to sleep on this, but I think we're gong to offer $21k. I'll either get my ROI in rental or in flipping...if I can find a buyer.
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1987 560SL 85,000 miles Meet on the level, leave on the square. Great words to live by Were we directed from Washington when to sow and when to reap, we should soon want bread. - Thomas Jefferson: Autobiography, 1821.
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#12
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You buying from the homeowner or the bank or for back taxes?
A tax sale is a different animal I think. The previous owner can reclaim the property by paying the taxes for a period of time after you purchase it.
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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC] ..I also have a 427 Cobra replica with an aluminum chassis. |
#13
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Quote:
MV |
#14
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Quote:
I'll be speaking with him Friday afternoon about it over the phone. The property hasn't even been given a proper listing yet...he's giving us first shot at it, since we picked up the other distressed without much fanfare or hassle. Besides, he knows we pay cash, without dealing with a bank.
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1987 560SL 85,000 miles Meet on the level, leave on the square. Great words to live by Were we directed from Washington when to sow and when to reap, we should soon want bread. - Thomas Jefferson: Autobiography, 1821.
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#15
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I have become a great believer in title insurance as well. It is usually just too good a value to ignore. I always envied it being available in America during the time frame it was not available here. It has been available here for at least ten years now.
That said I have no knowledge what it would be like to deal with the insurer if an issue arose. I guess that given a choice the past performances of a title insurance oompany could be looked at somewhere for comparisons with others. |
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