Newbie Question - Posted by Tammi

Posted by Tammi on March 14, 2000 at 13:44:24:

Thanks for the reply and good question about the amount of taxes. If taxes reach a certain % of the home’s value, does that determine when the foreclosure process begins? I don’t think my friend investigated the situation fully to tell you the truth! Thanks

Newbie Question - Posted by Tammi

Posted by Tammi on March 12, 2000 at 16:53:52:

Here’s a question regarding a friend’s deal. I have just started learning about rei, and am very excited about all of the possibilites, but want to gain more knowledge before I “venture in.” I don’t think my friend has too much experience, either, in fact I think this is the first deal for her. She found the info. on a house owing back taxes (I think) by going to the courthouse, she doesn’t live here, so the house is four hours from the city she lives in. Here’s the deal: she received the deed for a house by paying the owner $300 to move out(she physically helped him) and apparently he owes app. $13,000. in back taxes. The property is appraised at around $30,000. which is comparable to others in the area, needs around 2,000. in repairs from what I understand. My question is, if she repairs it, can she then rent out the property before paying the taxes? Is this illegal or a bad way to do business (seems like it to me). She isn’t sure what direction to go, if she decides to sell will a mortgage company finance the house and pay off the taxes at the same time? Or does she have to pay them first and then apply for a loan? Hope this question wasn’t too cloudy, as you can probably tell I am new to this and was hoping to get some clarification. By the way, this is such a great place to learn, and I have received good advice on some books, which are on order! Thanks so much for any help.

Re: Newbie Question - Posted by JoeB(Atlanta)

Posted by JoeB(Atlanta) on March 12, 2000 at 21:57:28:

Hi Tammi, I got the feeling from your post that your friend did not use a title company/attorney to do an official closing. If she didn’t, then first step is to have a title exam run to make sure she didn’t inherit even more liens than the $13k.

She could rent out the house without paying the taxes, but I would think the city and/or whoever purchases (or already purchased) the tax deed at auction would be much friendlier and safer bet, if she pays off the back taxes very quickly.

Yes, she can refi and the loan will pay off the back taxes.

Hope this helps,
Joe Brillante

Re: Newbie Question - Posted by Andy in Michigan

Posted by Andy in Michigan on March 12, 2000 at 19:46:52:

I have one question:
How does any municipality let a $30k FMV property get $13k in arrears on taxes?
Something doesn’t make sense. Please explain further.