Ok so a quick back story. The property Im interested in is actually the house I grew up in. Before talking about emotions hear me out. My mother had a thirty year $30000 mortgage on the house with the mortgage company Beneficial. A little over a year ago she was given the notice that they were starting the foreclosure process. She didnt have the money to fight any of it and was kind of done fighting it. She ended up filing for bankruptcy due to other financial problems.
So a year passes, the foreclosure never progresses, and the house has been empty for about 9 months. About a week ago she got a letter in the mail saying something about the house being her's free and clear, that she just has to pick up the deed and pay the property taxes.
That seems strange to me that they would send that and not try to get any more money from her. Has anyone ever heard of this before? Can it be legitimate or is it too good to be true? I can upload a picture of the document as soon as I get a copy.
If it is true then I will be buying the property from her on the cheap then either flip or rent out the house. That part Im not concerned with, I just wanted to know the validity of this strange document.
Thanks for any help, you guys are the best!
Shooting from the hip, it sounds like the back taxes are more than the property is worth.
Sounds odd, but you never know! Hopefully she doesn't owe too much in taxes. You could always run a title search on the property to make sure there are no more liens attached to the house.
Maybe you could "help" your mom flip the property herself. Now I'm not a tax professional, so consult with yours. BUT, if she sold it directly to the new buyer, she potentially wouldn't have to pay tax on the first $250k of capital gains (depending on whether she's live there for 2 of the past 5 years). If you bought it from her then sold it, you'd be paying straight income tax on all the gains. Definitely ask your CPA about this scenario.
Banks screw up plenty. Legally the BK wouldn't clear the title unless she filed a 13 and they got crammed down and paid out through the plan.
Unlikely, but very possible they'll give it to her. You're gonna have to read the paperwork. BofA deeded one back to my trustee one time after foreclosing on my land trust. They sent her a letter saying if she didn't take it back they'd sue her. She freaked out, I read the letter, took the house back and sold it. Crazy stuff.
Thanks for the input, i never would have thought about the possible taxes situation
Be sure to check the legitimacy of the letter and who it was from. I don't mean to sound paranoid, and your letter is probably exactly what it purports to be, but there are also some pretty slick scams out there.
For instance, I hold a few registered trademarks, and I get bills all the time for "renewal fees" that don't need to be paid and "servicing fees" that are really just some dude hoping I'm not paying attention. They usually look extremely official.
Again this is probably not applicable (hope not!), but it came to mind so I thought I'd chime in.
You can probably check the tax situation on the county tax assessor site.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
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