Auction

14 Replies

I just bought a house from Wayne County Tax Auction for $600???

What do I do now, the house might be occupied. Ideas suggestions?

Contact Darrick Scruggs I met him at a livonia meetup, great guy and very knowledgeable about what to do with properties obtained at the Wayne county tax auction. PM me and I'll shoot you his email, it won't let me post here.

Research what needs to be done as far as a formal eviction process, since that is ultimately what you will be doing here if the occupant doesn't want to leave. 

I've also heard a lot of investors stress the importance of treating the occupant like a tenant and provide guidance, support, and even money if necessary to relocate.  Taking this approach will save time and money.

A house I lived in when I first moved to Cleveland was bought at auction and was occupied by a squatter who claimed he wrote a check for the house and owned it outright.  The court reminded him that he wrote a $100k check from an overdrawn account and it was considered bank fraud.  He responded by explaining that he was a 'Freeman', and it doesn't matter how much money was in the bank account because money has no owners and the bank should have honored the check.  Long story short - a formal eviction process proceeded and the sheriff was ultimately present when the locks were changed and the man was escorted off the property.

Also consider "cash for keys" to give occupants an incentive

@Christian Hutchinson

Congratulations! 

You need to figure out who's the current occupant. Is it the owner or tenants? So that you can plan your strategy once you get the deed. 

Cash for keys if needed. 

gets even better its a duplex with 2b/1ba and a city own adjacent lot I can purchase for $100.

Drove by last night, one unit is for sure occupied.  I think I will keep the tenants charging them minimal rent.  I rather have it filled then empty.  At least until I can get a game plan in the spring.

@Christian Hutchinson You need to talk to only Texas investors/attorneys who know the procedures there.  The only thing I know about TX tax sales is that they have at least a 6 mo. redemption period.  As a side note, I have Never seen out of state investors do well at our auctions here....many times they don't understand what they really have acquired, and the local bidders don't just let screaming deals pass them by.  Maybe the competition there is slack, good luck!

Originally posted by @Wayne Brooks :

@Christian Hutchinson You need to talk to only Texas investors/attorneys who know the procedures there.  The only thing I know about TX tax sales is that they have at least a 6 mo. redemption period.  As a side note, I have Never seen out of state investors do well at our auctions here....many times they don't understand what they really have acquired, and the local bidders don't just let screaming deals pass them by.  Maybe the competition there is slack, good luck!

 This is Wayne County in Michigan 

@Christian Hutchinson How the heck did I read Texas?! Anyway, same advice if you don't already know the local procedures, laws, etc.  We certainly don't get those kinds of deals here.

Did you buy a tax lien or a tax deed?

In either case, the previous owner may have a redemption period.

You said that you'd start charging them rent. With only $600 into the deal, your COC will be amazing until you have to spend it all to get them out.

Brian

Good luck I invest in Detroit And the eastern suburbs and my advise is no your areas because and know the rental rules because if the city inspects your house and finds you need repairs or updates

and hit you with the lead paint inspections you 600 dollar house my quickly turn into 3500

worth of fines.

@Christian Hutchinson send a letter regarding the change of ownership and also go knock on the door. That is the best way to find out the situation. If they are hostile then you may have to evict. But you should be able to work out an agreement. 

Originally posted by @Bryce C. :

Contact Darrick Scruggs I met him at a livonia meetup, great guy and very knowledgeable about what to do with properties obtained at the Wayne county tax auction. PM me and I'll shoot you his email, it won't let me post here.

 you mean this guy?

https://www.biggerpockets.com/forums/92/topics/149...

lol

@George P. Yeah, I did a bit of research on Darrick too after I posted that. I withdraw the recommendation after what I found on BP. I met him personally and he had plenty of helpful tips on how to participate in the then upcoming auction. There never was an 'ask' or a 'right hook', he only added value to everyone in the room through education. I emailed him a day after the meet (as is protocol for me whenever I meet someone that I learn something from at these meetings) to thank him, and he said he would be available at anytime to ask questions if I or anyone I knew had them about the tax auction. I am in no way affiliated with Darrick and cannot vouch for his business practices. I just saw an opportunity to share resources and jumped at it. Sorry!

@Christian Hutchinson

If there's an occupant you'll most likely need to coax them into leaving voluntarily (think cash for keys NOT cutting off their utilities, etc.) or file for eviction on the squatter. Talk with a local landlord / tenant lawyer that practices in the municipal court for the city where your house is located.

@Tony R. Yagiela

Thanks for the laugh! I've heard some doozies in housing court but I've never had anyone raise the "Freeman" defense yet.

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