Hi, I'm a complete newbie to real estate but desperately want to and plan on getting into investing sooner rather than later. There is a property in a historic neighborhood that has been up for sale for awhile. The price has steadily dropped down to $29,000. I know it needs several repairs just from walking by and looking at the outside. I'm very interested in rehabbing older homes and this one was built in 1925, a beautiful brick cape cod. Okay, getting to the point, looking online at the listing it currently says:
THIS ASSET WAS ACQUIRED THROUGH TAX SALE, CONSEQUENTLY THE BUYER MUST USE SELLERS CLOSING AGENT SINCE THEY WILL SUPPLY THE TAX CERTIFICATION. THE SELLER WILL NOT PERFORM A QUIET TITLE ACTION.
Can anyone please help me understand what this means and the exact reasons why I should steer clear of this property as my first investment?
Quiet Title is mean to extinguish any rights of the person who lost it to tax sale. Most places wont insure over this. Who he is closing through? I dont provide quiet title (though I have done it before) but I do insure it usually. Whats the ARV? I can give a wealth of knowledge on this, if you want to call me there are a few ways to work through it if it is a good deal.
BTW Welcome to BP and always great to see another Hooiser
Not the place to start buying real estate unless you are ready for an educational experience beyond description.
If you are a cash buyer with the money buying a hole in your wallet it might be okay, however prior to resale or refinancing you with need to pay an attorney to file and complete the QTA. This means you run the risk from persons claiming an interest post-sale (prior owners, heirs, credits or others waking up to fact of property loss).
In my state, CA, title insurance may still not be available for resale or conventional bank financing for a period of time as they are insurance companies and abhor risk.
In short, if you're new, keep looking. If you're new and without money, invest in your education befire you invest in a property.
@Rick H. actually a sweet little known fact is we can insure over them, using First American, how sweet that is, just not alot of people know that. In general I agree with your comments though. I was hoping she would reach out to me so I can give her the name of a title company.
@Karen C. Be careful on the purchase, talk to the local building inspector or building official, give them a visit at city hall before you purchase, you might not be permitted to just rehab this like your regular rehab, you might be forced to install a new hvac/water/power/gas supply lines (this might cost up to 50k) and have the building quake proof. Be careful in purchasing +75 year old houses, states and county differs. Good luck.
Thanks to everyone that replied. I'm really just looking for education at this point in time, while building up finances to get into real estate. What I gather from the responses is that a previous owner might come back and try to take owner ship because of their investment in the property or other individual wanting payments due? Maybe I am not reading the replies correctly.
And to answer your question Jeremy, the ARV is in the range of $75 - $80K. So it probably is not a very lucartive deal with the amount of work that needs to be done. Maybe a buy and hold would prove more profitable for this property. It is not very big, around 1100 square feet.
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