Will property debt kill this lead??
6 Replies
Malita Robinson Real Estate Investor from Philadelphia, Pennsylvania
posted over 3 years agoHey BP!
In doing research on a lead, I was able to find that the property owner has a little over $7k in back taxes according to the tax revenue site.
I also was able to check other public court records by the owners name and locate documents that show unpaid utility bills ranging from a few hundred to a few thousand.
As I stated in a previous post, the owner of this property is renting out this house that has 3 units (1 unit is occupied). Of course from this same site, I was able to locate Landlord/Tenant court records that show the owner has been to court at least 5 times evicting tenants for nonpayment.
My questions are:
- If all goes well and I am able to get this property under contract, will the property owner be able to use funds that they will get from the deal to pay off the debt, specifically, the back taxes? For example, owe $7k back taxes, we agree to buy house for $20k – debt = $13. Or, does the owner need to come to the table with the money.
- Since the owner is renting out the home, are they responsible for paying the utilities that are behind? If so, can the above example apply to paying off this debt as well?
- Is personal debt found when doing title search?
Thanks
James Stevens General Contractor / Real Estate Investor from Temple, TX
replied over 3 years agoI think that the back taxes portion would HAVE to be paid buy the current owner at closing, so yes your example is correct. As far as the utilities, I'm not sure. They're not in your name, but is it possible for them to put a lien on the property until payment? I haven't actually heard of that, but just asking.
Dan Perrott from Indianapolis, Indiana
replied over 3 years agoin the Indianapolis area, the utilities must be paid by whomever is on the utility bill with one exception. The sewer bill which is part of the water bill must be paid by the property owner if it is past due. I am sure the utilities vary by area. Call the utility companies and ask for the department that deals with rentals. They can answer your specific questions.
In our area, the back taxes are paid at the closing. They are usually paid by the seller but it is a negotiable item - but they must be paid.
JPaul Mills Wholesaler from Navarre, Florida
replied over 3 years agoHere in FL any liens, backed taxes, or judgments can be taken from their proceeds so as long as the amount they are selling it for more than what is owed then they will not have to come to the closing table with anything.
Mike D'Arrigo Investor from San Jose, California
replied over 3 years agoI'm presuming your closing through a title or escrow company, so make sure that they have instructions to pay the taxes for the sellers proceeds. You don't want to leave it up to the seller to pay them themselves.
Malita Robinson Real Estate Investor from Philadelphia, Pennsylvania
replied over 3 years agoThank you @Mike D'Arrigo @JPaul Mills @Dan Perrott and @James Stevens . All of your posts was very helpful and informative.
Tomorrow is the meeting. Ill keep everyone informed on my progress with another post.
Thanks again.
Jade Davis from Syracuse, New York
replied over 3 years agoThe "something new that I learned today" was this. TY
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