Hey everyone, I am a real estate agent in New Orleans, but I am relatively new to the investing side of things, so I am hoping that someone can help me understand this particular topic a bit better...
I am looking to invest in adjudicated properties in New Orleans through CivicSource, which I understand is supposed to be safer than investing in tax certificates or liens, since the adjudicated properties are advertised as being sold with clear title and title insurance.
I've read quite a few negative articles from around the time the city starting using CivicSource back in 2015, so I'm wondering if anyone has any recent positive experience with this type of investing? Are adjudicated property investments really as "safe" as CivicSource and the city advertise them to be?
Any input is greatly appreciated!
One of my attorneys does the due diligence and title insurance examination for Civicsource. IIRC civic source is self insuring the title on these properties, but the vetting meets the best practice requirements for ALTA.
Hey @Cory Cheramie . I know several investors and builders that have had nothing but issues with properties bought through CivicSource. Everyone I know says to stay away from them. Yes, they claim the properties will have clear title but it seems it doesn't work out that way in actuality.
Hey @Braden Smith , thanks for the input. Like I said, almost all of the feedback I've heard about Civicsource is negative, so that's pretty telling. Since I'm new to real estate investing, I liked the idea of adjudicated property investing because it would allow me to start small, with limited funds. But it seems I may need to explore other options...
Also, as a side note, I really enjoy reading your posts - you seem to have extensive knowledge on the local market here, and I've learned quite a bit from your contributions on BP and the "New Orleans Metro Realtor Mastermind" Facebook page. My wife and I are both new agents (we just started with the family business, based in Belle Chasse), so we appreciate the opportunity to get an experienced perspective like yours!
Thanks Cory! Glad to be of help. If you have any questions that I can answer let me know! I dont mind sharing info.
@Cory Cheramie I only know one (1) person that purchased and NOLA adjudicated property. This main issue as it was described to me was that you can only get title insurance up to your purchase price, and any subsequent buyer is limited to that original purchase price. After 10-15 years, that will not be an issue. So if the plan is to buy and hold, maybe not an issue, but to buy and build/rebuild and they plan on selling is a big issue as you cant get adequate title insurance.
I have looked into them, but only because I buy/build and hold with no plans on selling.
@Braden Smith I assume that is similar to what you have heard.
I bought a lot off civic source.com and I will never use again. The lot I had bought was an old gas station and little did I know the tanks are still in the ground! I called up DEQ and they still had liens on the property from contaminated soil samples. I tried to get my $4600.00 back but was not happening. I never did go to closing on it due to the liability of the tanks which still had fuel in them.
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