So I've decided to go look at a few houses that a wholesaler has. My husband and I are interested in flipping one to start out. What questions should I ask the wholesaler? I don't think he has them locked down because he won't give me an address so that I can do due diligence. And some of the houses have back taxes owed. Any advice is greatly appreciated.
- Back taxes
- Is it an estate property. In some cases other family members might need to sign off before they can sell an estate property
- ARV in the area. List of comps in the would be great.
- Disclosures: any known issues with foundation, termite, mold, unapproved square footages (some turns a patio livable spaces, but did not get it approved by the county. When it comes time for you to flip and an inspector comes by you might be forced to tear the unapproved space down or get a permit for the space)
thanks Shar day! I appreciate it. I'll keep u guys posted.
So I just back from viewing the houses. I'm interested and depending on the numbers I'll jump on it. One thing that sticks out in my mind is how this whole tax thing works.
- will I be able to do a clean purchase with 11k in back taxes being owed?
-how do I find out if there is a tax lien?
-will I be able to get finances with outstanding taxes owed on the property.
I'm soon nervous yet ready to do this. Any advice is greatly appreciated. Thanks
From what you have said that doesn't sound like a good idea for your first flip!? From my experience I've seen the wholesalers numbers and a lot of them are way off the actual ARV and they try sell people on numbers that just don't add up and the repairs are always under estimated. I would just be very careful on the back taxes thing. I haven't had any experience with that because I would probably stay clear of back taxes in a deal!
You have a reason to be nervous. You should only be dealing with a wholesaler that has disclosed "ALL" the issues upfront and do not sign anything or give anyone any money until your attorney has looked at the deal. If they have a problem with this you need to walk and look for another deal.
This might be a good deal but you need to be sure of what and who you are dealing with.
Thank You Bob Wheeler, I will definitely have an atty take a look before I go any further. He seems like a pretty legit guy but how so i know these are his properties. He seemed a little pushy as well come to think of it. Can you refer me to a good RE atty?
Sounds like you should move on to another wholesaler and property. Someone has to pay those back taxes at closing, and guess who that will be. You can always have a title company do a title search on the property of you've checked the comps yourself and if the numbers work.
Thanks for the advance Jenny Cunningham, i think I might be in over my head with this one anyhow. the houses were $4500 each but has back taxes of $11k and $15k. Being that I'm not that experienced with tax issues, I think ill back off.
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