Tax Delinquent Property Lead!

13 Replies

Hi everyone! I need advice!

Alrighty, I'll cut right to the chase.  I started mailing out letters this week to tax delinquent properties with absentee owners in my area.  To my surprise, I got a call from an owner within the week!  

Going into this, I had a very specific idea for how I wanted to start out my foray into real estate... hopefully acquiring a property on the cheap through marketing tax delinquent absentee owners, updating the property as needed and again HOPEFULLY selling for a profit!  It seemed to work for Seth Williams from podcast 39 anyway.

I'm not sure what I was expecting with an absentee owner though... of course they have tenants! So I get the call from the owner today asking what my offer would be on their place.  To make a long story short

-The property is a 1.5 story 2 bed 1 bath building that seems to be fairly well maintained based on the appearance of the front of the house.  

-The taxes owed are right around $10.5k, property was bought in 1986 for about $55k so it stands to reason that they have significant equity in the property.  

-They do have tenants, I was stupid (and nervous) and didn't even think to ask what they were paying monthly.  

-The properties around it are generally going for about $120k-$150k. 

-The city will not file suit until next july and around here the owners have a full year to pay before the property is auctioned off.  So they basically have a year and a half to pay off whats owed.  It seems to me that this would make them a little standoffish to a low ball offer, but then again I've never done a deal before and I have no idea!  

Any experienced investors out there willing to lend some advice or suggestions?

Thanks everyone!

First step, don't assume there's equity.  Hopefully you can check online, county clerk, recorder, whatever it's called there.  Then proceed from there, either they're motivated or they're not, you can change it...but maybe time will.

@Wayne Brooks  Great point.  A friend of mine mentioned that if they did own the property free and clear, they could have taken money out of it to pay down the taxes.  I'm sure there are any number of reasons for this though.  Unfortunately after a call to the assessors office (seemingly the only real estate department here) they told me that they don't have any information on whats still owed on a property.  Is this info that a realtor might be able to find from some sort of bank database out there?  Thanks for the input!

Definitely don't assume anything.  They could have pulled out all the equity in 2007.  Your seller might not be motivated at all. The tax default isn't much a motivation IMO.  There are many people who don't pay until they have to.  They pay the taxes to save it from tax sale and then start the cycle over again.  You do need to know the status of the tenants.  Do they have a lease or are they month-to-month?

Get a title report and find out what you are working with.

@Ardie Mansouri  

Recorders Link

Enter name, look for Deed of Trust.  It will show when the mortgage (deed of trust) was originated, and the amount.  No, it won't tell you the current balance, you'll have to guess/deduce on that yourself.

http://mo4laredo.fidlar.com/MOStLouisCity/DirectSe...

@Wayne Brooks  Wow thank you so much!  I had found that website a while ago, but for whatever reason completely forgotten it existed!

I did find that the deed of trust was issued in 1986 and the deed of release was issued in 2013.  I'm not an expert, but with the brief bit of research that I did it seems that this means that the mortgage company is no longer owed anything on the property.  Is this correct?  Thanks again!  I really appreciate your help!

Yep, a release means it's gone. If no other mtg.s or liens are recorded, it should be clear, except for property taxes or any kind of I recorded as of yet liens....maybe HOA or code violations.

Don't make the first offer. Always ask the Seller what he wants. 

Originally posted by @Ardie Mansouri :

Hi everyone! I need advice!

Alrighty, I'll cut right to the chase.  I started mailing out letters this week to tax delinquent properties with absentee owners in my area.  To my surprise, I got a call from an owner within the week!  

Going into this, I had a very specific idea for how I wanted to start out my foray into real estate... hopefully acquiring a property on the cheap through marketing tax delinquent absentee owners, updating the property as needed and again HOPEFULLY selling for a profit!  It seemed to work for Seth Williams from podcast 39 anyway.

I'm not sure what I was expecting with an absentee owner though... of course they have tenants! So I get the call from the owner today asking what my offer would be on their place.  To make a long story short

-The property is a 1.5 story 2 bed 1 bath building that seems to be fairly well maintained based on the appearance of the front of the house.  

-The taxes owed are right around $10.5k, property was bought in 1986 for about $55k so it stands to reason that they have significant equity in the property.  

-They do have tenants, I was stupid (and nervous) and didn't even think to ask what they were paying monthly.  

-The properties around it are generally going for about $120k-$150k. 

-The city will not file suit until next july and around here the owners have a full year to pay before the property is auctioned off.  So they basically have a year and a half to pay off whats owed.  It seems to me that this would make them a little standoffish to a low ball offer, but then again I've never done a deal before and I have no idea!  

Any experienced investors out there willing to lend some advice or suggestions?

Thanks everyone!

HI Ardie,

I wish you much success with your lead. Neat strategy. Question for you: how did you find out who were the tax delinquent out-of-state owners?

Keep us posted.

v/r

Alyssa

@Alyssa Baron  Thank you very much Alyssa! I have gotten all of my leads using agentpro247.com You can filter by absentee/owner occupied properties, as well as distressed/non-distressed properties (which means tax delinquent).  

Following up on this lead though.... I called the owner to get a little more information on the property.  For whatever reason they were completely unwilling to tell me anything about the current lease (what it rents for, how long current renters have been there, when their current lease is through) and insisted that that had nothing to do with the value of the house (I guess I can see their point).  Also, would not allow me to come look at the house at all.  They did know about their delinquent taxes, but didn't seem to think that mattered.  Also threw out a ballpark number of around $100k for a asking price.  So unfortunately, it looks like this owner is not quite motivated enough for what I am looking for and this deal won't be happening.  Either way though, I did learn quite a bit from all of your feedback.  I really appreciate it! @Joseph Ball  @Wayne Brooks  Kristine Marie Poe 

Originally posted by @Ardie Mansouri :

@Alyssa Baron  Thank you very much Alyssa! I have gotten all of my leads using agentpro247.com You can filter by absentee/owner occupied properties, as well as distressed/non-distressed properties (which means tax delinquent).  

Following up on this lead though.... I called the owner to get a little more information on the property.  For whatever reason they were completely unwilling to tell me anything about the current lease (what it rents for, how long current renters have been there, when their current lease is through) and insisted that that had nothing to do with the value of the house (I guess I can see their point).  Also, would not allow me to come look at the house at all.  They did know about their delinquent taxes, but didn't seem to think that mattered.  Also threw out a ballpark number of around $100k for a asking price.  So unfortunately, it looks like this owner is not quite motivated enough for what I am looking for and this deal won't be happening.  Either way though, I did learn quite a bit from all of your feedback.  I really appreciate it! @Joseph Ball  @Wayne Brooks  @K. Marie Poe 

I'd not give up on that one.  Details about the lease and rents at this point are irrelevant.  You don't need to see the house.  

Someone asking for $100K today may well take $75K tomorrow.  It's your job to know the condition of title and have knowledge of outstanding liens.  It's your job to know and understand value.  $120-$150K is not useful.  In that price range, the $30K difference could make or break the deal.  You need a real number to determine if there is a deal there. 

@Ardie Mansouri  

Thanks for sharing about agentpro247. I'll check it out. And best of luck with the lead. Looks like you got some great advice.

@Ardie Mansouri  , Hey I seen your post tax delinquents and your from st louis as am I and I'm in the process of wholesaling a tax delinquent property, contact me directly [email protected], we could possible do some co-wholesale deals together, thanks.

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