No Red Tags in my area :( - Posted by John(KS)


#1

Posted by Doug on December 16, 1998 at 09:58:59:

I can undestand what you are tying to say… Yes you can get the title company to give you Insurance as long as you allow for an exclusion of property taxes and I already said in my previous post that no mortgage company will finance a property unless back taxes are paid in full… But if you work it right you can turn owed taxes into a great deal for yourself… Heres an example…

Property owes 5,000 in back taxes… The property is under contract for 35,000… You take a credit for the 5,000 in taxes…( now you only need 30,000 to close) The title company will always give Insurance but will list exclusions of Insurance and in this case the back taxes will be an exclusion to there Insurance… Anyway You borrow against another property, life Insurance, credit cards, etc. to come up with the 30,000 to close the property… Now once you closed you have ttle to the property and you owe the property taxes… Anyway then you refinance it for the 30,000 you borrowed and the 5,000 in taxes that are owed and you pay the back taxes… This just gave you the tax deduction for paying the 5,000 in back taxes since you were the title holder when the taxes were paid…

If you just purchase the property in the first place for 35,000 and let the seller pay the taxes at the closing then the seller will get the deduction for the back taxes since the title was in sellers name at time they were paid…

Its kind of creative but I have done it on a handful of deals in the past and it gives a nice deduction for you at the end of the year…As far as title Insurance like I said the title will be insured with the exclusion of the back taxes…But thats no big deal as you are going to pay them yourself anyway once you refinance…

Douglas Timko

notes4sale@yahoo.com


#2

No Red Tags in my area :frowning: - Posted by John(KS)

Posted by John(KS) on December 14, 1998 at 13:42:05:

I called the Enviromental Code Services office for my City at lunch today. I asked for a list of the condemed houses and properties that had been closed for code violations. The gentleman I talked to said that there were no list of properties he could give me. He said that the properties that I wanted were sold to the city for demolition.

The way it works I guess is the owners get called to a hearing to discuss their code violations and what will happen to their home is it is not brought up to standards. If they cannot fix it, it gets condemed and sold to the city. He told me I could find the list of owners that are going to be at the hearings in the paper, and contact them that way.

Did I ask the wrong question, or did I just find out it takes more work than just obtaining a “magic” list.

John(KS)


#3

Re: No Red Tags in my area :frowning: - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 14, 1998 at 21:38:20:

Go to the hearing WITH CONTRACTS – there will be a few VERY motivated sellers there.

In our area the red tag list is public info.
Dig a little deeper. Ask to talk to the person in charge of the code enforcement department.

At the very least find out which paper they publish the list in - and when it is published. Try sending a letter or postcard to the owners – you should be able to track them down through one of the people finders on the net – or go to the property and knock on neighbor’s doors – ask them if they know where the owner is and how to get in touch with them.


#4

Re: No Red Tags in my area :frowning: - Posted by Rob FL

Posted by Rob FL on December 14, 1998 at 19:07:55:

I found some at the recorders office also. I just did a title search for recent liens filed by the county or the city. I just run “City of Orlando” in the computer. I find all kinds of liens, and the liens give the property address. (luckily here in orlando, all the recording are on the internet, so I just do all the title searching without leaving the house)


#5

Re: No Red Tags in my area :frowning: - Posted by Joe Kaiser

Posted by Joe Kaiser on December 14, 1998 at 15:01:14:

John,

The list is down at the recorder’s office. Our county calls it a “complaint for dangerous building.” I was just down there today and pulled a couple to look at. One was a total wreck but the other looked decent so I’m in pursuit now.

After the complaint, a hearing is scheduled and the owner or lien holders have the opportunity to state their intentions regarding returning the property back to livable condition. The results of that hearing are recorded as well (again, in my area anyway).

Often, the result of the hearing is “owner did not appear” and the property gets scheduled for other actions (like leveling the darn thing).

Even still, there’s time to locate the owner and if it makes sense, get a proposal into the proper authority’s hands which allows you do get the property rehabbed.

Joe


#6

Re: Smorgasbord of Houses - Posted by DJ

Posted by DJ on December 14, 1998 at 19:50:29:

Joe,
There are alot of houses in need of rehab in my area,
that have been abandoned or condemned for one reason or another. I can find the owners through on-line
tax records. But, most of these houses are in the
low-income/rough part of town. I am a remodeling contractor and know what to look for when inspecting a house for problems. My question is, can you see a market for this type of housing/people, or should it be left to the government? The reason I ask, is because most investors would look down on these type houses/areas. What are your comments?
Signed,
“Tryin’ to find a Niche”


#7

Re: Smorgasbord of Houses - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 14, 1998 at 21:47:27:

Just because many of the properties are in the lower income neighborhoods - don’t assume ALL will be. You still need to keep an eye on the list --and make sure all your bird dogs know to look for the “red tags” in their neighborhoods.

The best red tag deal I got was a $250,000 house in a really nice neighborhood. My price was $100,000!! $30,000 at closing (to pay the back taxes)and the seller carried $70,000 for a year.

hint hint – did you get that part about back taxes – another clue to check in to…


#8

Re: Smorgasbord of Houses - Posted by Joe Kaiser

Posted by Joe Kaiser on December 14, 1998 at 20:01:38:

DJ,

Whenever I look at info related to poor condition property, I go straight to the property address. If it’s a good area, I’m interested. If it’s not in a good area I immediately cross it off my “possible” list.

I can fix a house or flip it to a fixup investor, no problem. It takes someone with more brains and deeper pockets than I to take on a house in a tough area since I can’t fix the entire block (though lord knows I’ve tried).

Joe


#9

Re: Smorgasbord of Houses - Posted by Doug

Posted by Doug on December 15, 1998 at 03:15:30:

Was the hint for the 30,000 down at the closing for back taxes a credit for you? In case anyone doesnt realize you can take back taxes on a property as a credit to lower the amount you will need to close the deal and pay the taxes at a later date… Although if you are having to apply for a Mortgage for this deal they will want taxes cleared up before they lend against the priperty… Another thing to remeber is if you take the taxes as a credit and transfer the title when you do finally pay the back taxes you will recieve a tax deduction for the payment of those taxes as you were the title holder when they were paid… Thats how you can get a deduction for a downpayment…
Douglas Timko
notes4sale@yahoo.com


#10

Re: Smorgasbord of Houses - Posted by Doug

Posted by Doug on December 15, 1998 at 03:24:06:

I have to agree with Joe I have in the past bought many houses in these areas as it was a way to get into the real estate business the fastest… It was a nightmare and dont suggest these areas to new unexperienced Investors… I know what he means when he says you cant fix the entire block because I purchased just about and entire block to help control the tenants on that street and not allow any bad tenants to ruin the values of my rents in the other properties on the street… But bad tenants alway scam a way in… I had people rent from me only to find out they never moved in Drug Dealers paid them to rent the apartment for them… Its just not worth the headaches and nightmares… Consentrate in better areas… It is a bit more work as in bad areas the deals are a dime a dozen.
Douglas Timko
notes4sale@yahoo.com


#11

Re: Smorgasbord of Houses - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 15, 1998 at 15:31:52:

I’ve never heard of using the back taxes as equity – especially not when the property set for foreclosure BECAUSE the taxes haven’t been paid in 5 years.

I can’t imagine a lender would want to get tangled up in that kind of a mess (let alone a title company) I believe their lien would be junior to the taxing authority – not something most lenders would accept.


#12

Re: Smorgasbord of Houses - Posted by Bud Branstetter

Posted by Bud Branstetter on December 15, 1998 at 11:36:17:

I’m not sure what state you operate in but in Texas I haven’t found a title company willing to give title insurance without paying the back taxes. Yes, I can buy el cheapos all cash without title insurance and negotiate with the tax authority to spread the back taxes out over a short time. I am not sure if the title company would exempt taxes from the title policy if I asked and I not sure I would want to do that anyway.


#13

Re: Smorgasbord of Houses - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 15, 1998 at 07:43:41:

No, the hint was simply that properties with back taxes can also be good deals.