Distressed Owner/Bankruptcy?/Major Taxes Owed

9 Replies

Hello All!

I hope all is well. Let me get straight to the point.

I had an owner contact me via my direct mail.  He owns a house which he hasn't paid taxes on since 1995, the house has not been to auction, and I was told by the Dallas County Tax Office that there is a lawsuit against him from a lawfirm that handles most Tax Delinquent Cases.

Additional Info:

Taxes owed: 89k! No this is not a typo. The owner claims he received a letter from the tax office saying " If he paid his taxes now they would reduce the taxes owed by 50%" I have never heard of such a thing and I have not seen the letter he speaks of.

Labor Lien: 3.5k

Is this even worth pursuing further? 

If he hasn't paid the taxes in 20 years I can't believe they haven't foreclosed on the property. So are you trying to decide if it is still a deal if you have to factor in an additional $45K to pay off the taxes? 

@Bara Nwokoma

Whether it's worth pursuing is going to be completely determined by the ARV of the property, where it's located and what the rehab costs are.

As an example...let's say this property has an ARV of $200k and needs an incredibly modest $20k in rehab. Now, let's assume his letter is real, and the taxes can be reduced to $45k. You could pay the back taxes and liens, as part of the purchase, and give the seller $20k in walking away money and still be $51k below the 70% rule target purchase price of $120k.

So, heck yeah, it could be worth pursuing. 

I am wondering if it's still a deal. I am also shocked the property hasn't been foreclosed on. 

This property has alot of weird things going on that I am not familiar with.

Hasn't paid  taxes in 20 years, some lawsuit against him that I can't find info on and the law firm won't tell me; since I'm not the owner, and the normal labor liens for a vacant property.

What I'm trying to figure out will the property be troublesome? Why has it been sitting there for so long? The owner moved out about 15 years ago. I would love to help him and if I can't, I would like to give him other options. @Mark Nelson

So Vacant for 15 years and he hasn't paid taxes for 20. Is he willing to let you do a walkthrough to get an idea of the condition? I agree with @HattieDizmond it is all about the ARV. Try to figure out what kind of work it would need and figure that into you evaluation. I would love to get ahold of a 15 year vacant property! But that stuff with the taxes and the law firm sound pretty shady.

ARV for the property is about 100k. I wish it was around 200k!

The house is completely boarded up so I did not enter the property. The owner said it was ok for myself to enter the property, if I could find a way in. I decided against that.

But now as you all have mentioned the ARV should determine further proceedings, I may not be the one able to help him.

@Mark Nelson @Hattie Dizmond

@Bara Nwokoma

With the property address you can go to the Tax Assessor's site and verify the current state of the taxes, because I'm having a hard time believing they haven't been auctioned before now.

Also, have you checked DCAD or TAD to verify the person you're speaking with is actually the property owner?  There are a lot of shady folks out there, and I've personally encountered a situation where someone was trying to sell a property that didn't belong to them, even though they were living in it.

However, with a $100k ARV, if it does go to auction, it's going to sell for next to nothing.

Yes I have done everything mentioned. From what I have researched, I am speaking with the owner. Have I met him in person? No he lives next to Tyler,TX and the property is located in Duncanville. 

Needless to say, It's baffling! I have yet to encounter a property such as this. @Hattie Dizmond