I'm looking to buy a property in New Port Richey, Florida.
I went to the property to check it out and it was disgusting. It was vacant, in really bad shape, animal feces in multiple places and overgrowth growing into the property. Overall needs a lot of work - But I'm not concerned about the rehab.
I'm looking to pick this property up from a wholesaler and the property was owned by an individual that died. The wholesaler is telling me the closing is going to take place in about 30 days as court passes the property to whoever in the family inherits it. Additionally, the property has 4 liens in the county clerk which are:
1. Water bill +- $250
2. Paving the streets / special assessment bill for $3000
3. Code enforcement +- $300 for being unsanitary conditions
4. Another special assessment (not sure if the same) for $5475.50
. We are going to use a title company for the closing. Being a relatively new investor, am I taking a risk here with these liens ?
What should I look for to make sure I don't slapped here. Overall there's a there's upside potential on the deal.
Another interesting piece of information is that the taxes for the property have been paid by a bidder - can anyone clarify what this means ?
Do you have the date of the most recent water lien? You should call the water company and try to find out how much is owed. Just because they have a $250 lien doesn´t mean they are going to turn on water after you pay $250. Multiple times I have bought properties at foreclosure auctions that had public liens of $200-$300 and actual water bills of $2000+.
If a property is vacant and nobody switches off the water, they just keep adding up the monthly bills and penalties, often for years. Sometimes you can get those bills reduced significantly with a bit of negotiation and other times they´ll offer a $50 reduction on a bill of $2550.
So don´t let it discourage you from buying - just bear in mind the actual cost to get water turned on could be 10 times higher than the lien they put on it, especially if that lien date is 12+ months ago.
On the other hand, you might find it pretty easy to get that code enforement fine waived if you can show them that you cleaned up the mess left by the previous owner. Again, involves a bit of back and forth with the county.
Not much you can do about the pavement assessments, they need to be paid, but very straightforward.
Either way, none of the above liens are complicated for a title company, all pretty standard. What gets complicated is if the probate/title wasn´t transferred cleanly in the past.
Thanks @Colin Murphy I appreciate the in-depth answer. In 'complicated' situations isn't it the title company's job to have it resolved ?
Depends what kind of searches they are doing @David Tsedaka . Not all title agents clear utility liens before transferring ownership. If you specifically request it, then you should be ok.
Yeah, all the liens get paid out of the seller’s proceeds. Just make sure you gat a Full title search....in addition to “recorded” liens this will include letters of inquiry to the various city/county depts and utilities to find “pending” liens (code enforcement, etc). The current code enforcement is likely growing at $100-$250/day.
The property tax thing is nothing...someone just bought a tax certificate for 2018 taxes....that gets paid off at closing.
This all assumes you buying by way of a normal Warranty Deed, with title insurance....not by Quit Claim Deed which you should Not do.
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