Hey everyone, I have a question about an individual I met who says they he "owns" over 200+ properties by way of Quit Claim deeds via pre-foreclosure sellers.
In other words, home owners facing foreclosure, $1 deed the property to his LLC and he now has the controlling interest of the property even though the bank has not begun the foreclosure proceedings. He then cleans up the properties, and rents them out.
His business model is built around the acknowledgement that at some point, the bank will begin the foreclosure proceedings, and his interest in the property will be lost when the home sells.
Now I understand that a QC deed is not clear title, since the bank has an outstanding mortgage on the property. This guy does not have to pay the mortgage obviously, but what he did tell me that was interesting was, he claims he doesn't have to pay the taxes on the property either.
He says that the bank continues to pay the taxes on the property through the pre-foreclosure/foreclosure process. He also says that his tenants on these buildings are never put out when the home is foreclosed because in some cases, the bank will pay the tenants $3,000 to move out when the foreclosure process is finalized.
Now, I understand the meaning of the QC deed, and understand that the new "buyer" is not held liable for the mortgage, but how can he be able to avoid paying the taxes too? And getting the bank to cater to his tenants at the end for $3,000?
Basically his business model has him in control of 200+ properties using QC deeds as the instrument. He cleans out the homes, and advertises them for rent, making easy money without paying a mortgage. When the bank foreclosures and lists the home for sale, he just walks away.
But saying the bank is paying the taxes? No other repercussions? Seems like a cash cow business that is too easy.
He was looking to hire a property manager for some of these homes, and one thing that stuck out to me was part of the job duties states he expects the property manager is to "keep him up to date on the foreclosure process"
Can this be a true depiction of his business model? If so, how could he possibly avoid paying the taxes? And what happens when the bank forecloses? His deed goes away?
I'm really curious about this post and would love to know if anyone has any information on this process. It sounds illegal to me, considering the true liability of mortgage is still on the sellers. just curious to as why he wouldn't try to take these properties subject to the existing mortgage. is he compensating the seller at all?
Here's what the ad should read:
Looking for a Property Manager to join my illegal team. No license necessary. Experience defrauding lenders is a plus. Ability to dodge homeowner protection laws is a must.
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