Posted by Paul on December 06, 1999 at 23:54:50:
If its the right price Eric, take it. I’ve bought property at tax sales for pennies on the dollar and sold them to people who don’t know about tax sales. If it is a nice complex, it should sell quick enough. You can always provide seller financing and then sell the mortgage.
Good Luck!
Help! nice townhouse at tax sale, but I’m nervous? - Posted by Eric Timmes
Posted by Eric Timmes on December 06, 1999 at 11:17:53:
I’m thinking about buying a single unit townhouse at tax sale, but they’re never discussed in “HOW TO ARTICLES”? The complex is immaculate; the association fees are reasonable; and the price is low. It seems like an okay deal, but I’ve never bought a townhouse before so I’m scared. Comments please!!!
Is there anybody who writes about condo/townhouse deals?
Where is the “Lonnie Scruggs” of condos?
Re: Townhouse expert - Posted by gl
Posted by gl on December 07, 1999 at 09:17:39:
There is a Canadian real estate “guru” named Raymond Aaron who has speciallised in condo townhouses for years. He has been investing since the early 70’s and giving seminars since 1983. 90% of the hundreds of properties he has bought have been condo townhouses.
His reasoning is that you can get practically as much rent for a townhouse as you can for a house, yet he can buy them a lot cheaper. So it is easier to get a positive cash flow.
He likes to buy with low down payments, rent them out and hold for 5 to 10 years.
If you have any Chicken Soup for the Soul books he has a couple of articles in there.
Re: Help! nice townhouse at tax sale, but I’m nervous? - Posted by tb
Posted by tb on December 06, 1999 at 18:00:49:
Hi Eric,
I was just wondering, you mentioned that this is a “tax sale” property.
In a Tax Sale, sometimes known as a Tax Deed Sale, the successful bidder would come away with any number of actual deeds (Sheriff`s Deed, Limited Warranty Deed, etc.) from the county which is holding the sale.
On the other hand, if you are mistaking a “tax sale” for a “tax lien auction”, the successful bidder would simply walk away with a Tax Lien Certificate on the property for that tax year. You would only own the lien on one years ad velorum property taxes for which you would collect an interest rate set down in your particular State Statutes. You would be a long ways from actually “owning” the property.
There are some very good opinions on this board concerning tax sales and tax liens, but you must provide more information in order to receive guidance.
Hope this helps.
tb
Re: Help! nice townhouse at tax sale, but I’m nervous? - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on December 06, 1999 at 11:46:20:
Don’t know if I am the Lonnie of townhouses, but I do have a good bit of experience over the last 3 years buying, renting and selling townhouses. I am not familiar with the tax sale procedures in your state. But isn’t the price they normally list the starting bid? Or can you actually buy at that price? What is your plan for this property? Rent it out, sell it to an owner occupant or lease-option?
A couple of things to look out for : Make sure the association is in good shape. Do they have a reserve fund? Are there any potential assessments coming up? Is there a lien on the property you are buying for back HOA dues? What does the association provide? I would recommend you stay away from associations that provide necessary services (water, sewer, electricity, … etc). If the association doesn’t pay the bill for some reason, the whole complex is cut off, and you are stuck with a unit that has no utilities.
If you are planning on renting the unit, you should treat it similar to apartments as far as vacancy rates and repair costs. The repairs would be somewhat lower than a single family house, but the vacancy will be higher as well. Most renters treat a townhouse like an apartment, not like a house. So don’t count on the tenants fixing many things on their own. Also, what would it rent for? Normally, I don’t buy unless I can net $200 per month in positive cash flow. That is after 10% vacancy, 25% for repairs. Make sure you take the HOA dues into account.
Just some ideas, get back to us with your success on this deal.