Got a quote from Alabama D of R for a house in Birmingham that has been delinquent on Taxes in 2015. Quote is for a Tax Deed!
The homeowner (older lady) still lives in the home and purchased the home in 2006. Not sure if there is still a mortgage on the home or not. A friend drove by and took some pics of the outside and it looks in pretty good condition.
I'm very interested in this house, but I'm more interested in working with the owner than putting her out.
Now for the questions:
1. If there is an existing mortgage...will I be responsible for it?
2. Suggestions for monetization?
Good chance there’s no mortgage. Most mortgages escrow taxes so they would’ve paid them.
However, I’ve bought some where the owner quit paying the mortgage and the mortgage holder didn’t pay taxes and didn’t even bother foreclosing. I guess it was crazy times in 09-11 for them.
Great advice! Thanks!
@Robert Sims , the only risk with a mortgage on an Alabama tax deed property is the risk that the lender will redeem. They cannot foreclose without redeeming first. You have no personal liability, under any circumstances.
Be sure to give your written notice to any lienholders and wait out the year, when they will have lost their redemption rights. I've never had insurance or tax escrows with any of my properties, so the fact of the tax sale is not a firm indication of the lack of a mortgage. Sometimes older people's properties are sold because they turn 65, believe they are exempt, but never go down to the courthouse to file their paperwork. Or, they file it the first year, and don't realize they need to do it every year.
I'd say get the tax deed and approach the former owner about making needed repairs and renting it back to her for a modest monthly rent. She probably can't afford to make repairs and does not want to move. Especially if she does not have any heirs to whom she wants to leave the house, this strategy might solve many problems for her. Make sure you get a quitclaim. Once you have a proven track record with a paying tenant, it is fairly easy to sell the property.
Awesome! Thank you all!