Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
Hello everybody,
Yesterday I found a property on craigslist Cleveland, a 8 unit (6 apt. and 2 store front) for only $95k. Building is rented out (month to month) and I can buy this house with my own money, but there is a snag.
Property has back taxes $12k and a pending tax lien, the owner will retire, he has more properties in Cleveland, but this is the only with back taxes.
The back taxes are not my problem, it´s the tax lien. I have no experience with. So please advice me, what should I do?
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
Don't confuse cheap with good. Cleveland is a depressed area with MANY bad neighborhoods. Obviously, the current owner couldn't make money with this property, otherwise it wouldn't have a tax lien. You need to determine why the owner was losing money on this property. Is it in a gang infested slum? Is it filled with non-paying crackers? Is there any demand for the store fronts? How much deferred maintenance is there? Are there any city fees or fines pending? Unpaid utility bills? Who pays the utilities - the landlord or the tenant? Etc, etc, etc!
You also forgot to mention the most important thing - the rents? What are the actual and potential rents?
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
16y
Anthony, sorry but I don´t understand your statement.
I´m the buyer not the seller, the ask price was $119k, now it´s $91k.
$1,5k NOI every month is very good cash flow. There is no appreciation in the game (if you mean the value of the propertie?).
Uwe, I was actually talking about the bricks and morter insurance. That will be a commercial policy covering against damage and liability.
The title insurance will automatically be in place when the property closes (if you've requested it).
The bricks and morter/ liability insurance you must order separately. The title company doesn't do that for you. Since you are flying to the closing, you will have the insurance all arranged in plenty of time. It sounds to me like you have everything organized.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
16y
P NW,
Yes I created a roadmap for this deal.
I don´t know the propertie personally, only from photos and a video from a home inspector (cost me $650 bucks) in November. So I have an release clause in the contract if something is not right.
Now to the bricks and mortar insurance, I don´t know these. I thought the propertie insurance covers all.
So please let me know which insurance I need?
I know umbrella, title and propertie insurance? Which insurance companys you prefer? I would overtake the existing propertie insurance from Nationwide ($164 month).
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
16y
Puhh this was a long time, finally I can close on the 8 units in Cleveland. Not as sheduled on 01-15-2010 but on 04-29-2010.
I fly to Cleveland for the closing, was a long way, seven month from first contact to signing but be profitable :).