Other other investment.
Purchase price: $7,000
Cash invested: $7,000
Sale price: $16,000
I purchased the bare land at a tax deed auction. Cleaned it up, paid for a survey, chased off squatters and then sold it with owner financing. The buyer was often behind but I took pity on the lady because her husband went to jail and her son was in trouble too and she kept having hard luck. Right after I started the foreclosure process, her divorce got finalized and I got paid in full. The dates may not be 100% accurate because I'm filling this in from memory and the form only accepts exact days.
What made you interested in investing in this type of deal?
I got interested in tax deed investing because a friend from church was doing it with money he made from his fishing business. He owned his home outright, invested in mortgage notes, bid on tax deed auctions, and used a HELOC to pull money from his home when needed.
How did you find this deal and how did you negotiate it?
Scoured the borough tax website and then bid a few dollars over the minimum -- actually, if I remember correctly, i was outbid on several more desirable properties in the formal silent auction portion but this property had no other bids so I was able to buy it during the outcry portion of the auction. I think there was one other bidder. I was desperate for a deal at the time since I missed out on the ones I really wanted.
How did you finance this deal?
How did you add value to the deal?
Cleaned up trash and removed old cars. Sold the abandoned travel trailer on Craigslist.
What was the outcome?
It was frustrating. I got death and legal threats. Previous owners trespassed on property and pulled out my survey stakes and removed my no tresspassing signs. The buyers built a shack and filled up the property with trash and junk cars. I didn't want to foreclose because the property would have cost almost as much to clean up as it was worth.
Lessons learned? Challenges?
People that have distressed credit and jail time probably will go back to their old ways. For an owner financed property, purchase price and interest rates are not as important as downpayment and monthly payment -- and the prospective buyer's ability or intention to pay. People often create their own bad luck and any handouts or mercy will be used to perpetuate the bad decisions that got them into trouble. In retrospect, I should have foreclosed immediately after the first missed payment.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with Bret Jameson, an investor and hard money lender and Tyler Bobo, a realtor.
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