Wholesaler/ Investor · Houston, TX · Member since 2014 · 491 posts · 113 votes
Hello everyone, I have a quick question. Earlier today I went to go check out a house that an individual was selling. It's in horrible shape and needs to be torn down, literally! I told him that I would be able to give him an offer once I got home and ran the numbers, thinking that I would be able to get it for next to nothing. Until I saw that he owes $19,000 in back taxes. What can I do? Hopefully there is something, because he's really trying to get it off of his hands. And honestly, I wouldn't mind acquiring get for myself. Any input would be highly appreciated. Thank you
Please correct me if Texas works different, 19k on back taxes I wouldn't even talk to the seller anymore. I would go straight to the county clerks office and see if you can purchase over counter tax deeds. 19k on a property like that tells me that property hasn't been paid in years. So now if the seller doesn't redeem and pay you a certain percentage plus your 19k (state by state I think Texas is around 20%) you will get the deed to the property. Win-Win to me.
If the property is blighted and an eyesore some jurisdictions may be open to negotiating the taxes but generally it is a tough fight. Since TX is a tax deed state they are likely to first take it to tax sale. If it doesn't sell them they may be willing to negotiate. Make sure they understand the current owner is on board and will get nothing for the deal and they will get a property back on the tax rolls.
What is the area like? Looks pretty rough. It's probably a teardown. What is the land worth? Is it close to schools, stores, mall, restaurants ect? I am not familiar with your area. I love deals like this if I have the right answers to those questions...
@Chris Boyd Area is ehhh C-class, schools rankings are 2's and 3's, land is worth 7k according to the county in 2015, not close to any schools... just close to big highway, 20 min from downtown Houston, no malls, mom and pop stores and restaurants all around.
How many acres? Find out of the land is subdivisible. (Something i just learned on BP). maybe the possibility to build two houses or trailers on the lot and rent them out. If it's subdivisible, then you could actually build two houses, maybe three on the lot and sell them. Or maybe just sell the lots themselves. Just creative thinking here.
@Jacquelyn Sarpong Thanks for the creative thinking (I'm def going to learn about that) but the lot is only 7,132 sf. So not even close to an acre :(
Just spoke to seller and he said that someone has offered to pay the taxes off in whole and give him $4,500 on top of that. I'm not sure if he's just saying that but I asked him if I could get him 5k in addition to paying off the taxes would that be a deal and he said yes of course. I'm going to try and figure out ARV tonight and then tomorrow try and probe him to see if the other offer is legit.
Mmmmm do the due diligence. He maybe pulling your chain. I mean what can you really do with the property unless your investor wants to build a brand new house. And i doubt it bc it's not even close to anything. Of the numbers don't add up, focus your energy elsewhere.
This is a tough one. When in doubt, walk it out. Unless you have strong buyer on hand, or plan to build a new structure, I walk on this one. Good luck bud!
Why would pay 25,000 if the property is not worth 10,000? 19,001 to pay off taxes and 4,500 on top of the 19,001? Sound like you losing money if you go that route
I got this because I monitor 'BC' for British Columbia, where I live. I'm not sure why this is complex to analyze. The roof is shot and it's structurally unsound (by the time you try you may as well start from scratch). So the property is worth land value - taxes owed - teardown cost - all the hassles that go with that. It should be easy to come up with a number. So it only makes sense to buy if it's worth building or holding. BTW a 32' wide lot with a teardown recently sold in Vancouver for $2.7 million CDN - $300,000 over the asking price. It made the National News.
@Benjamin Blackburn, the seller claiming he has another offer seems a little fishy. Definitely do your due diligence, but this might be one to walk away from.
Hi @Benjamin Blackburn if I understand correctly I believe you said that the land is worth $7,000 according to the county and the house is a tear down and if this is the case then it's not a deal and I wouldn't purchase it from the owner, but what I do recommend is contacting the tax offices first that collect taxes on the property and finding out if it's in the process of going to auction and I also recommend going online to the website of the law firm (Linebarger Goggan Blair & Sampson LLP) that handles the tax sales and continue searching for the property in order to determine when the property would be auctioned. In my opinion bidding on the property would be the best way to get a deal. Once the taxes are delinquent there are limited things that the taxing jurisdictions are able to do based on the process that's in place according to the law.
Thank you all for your responses. It's starting become more and more clear that this is far from a deal. It's basically just a lot with 19k worth of taxes owed on it. I think I just got a little ahead of myself and my mind was going all over the place. Thanks a lot
I will try and upload some pics so you all can see
I have bought some tear downs. But i dont tear down block or brick houses. It might be salvageable if block or brick. Those can last forever with extensive renovation. But you have to decide if the numbers work.
Please correct me if Texas works different, 19k on back taxes I wouldn't even talk to the seller anymore. I would go straight to the county clerks office and see if you can purchase over counter tax deeds. 19k on a property like that tells me that property hasn't been paid in years. So now if the seller doesn't redeem and pay you a certain percentage plus your 19k (state by state I think Texas is around 20%) you will get the deed to the property. Win-Win to me.
Please correct me if Texas works different, 19k on back taxes I wouldn't even talk to the seller anymore. I would go straight to the county clerks office and see if you can purchase over counter tax deeds. 19k on a property like that tells me that property hasn't been paid in years. So now if the seller doesn't redeem and pay you a certain percentage plus your 19k (state by state I think Texas is around 20%) you will get the deed to the property. Win-Win to me.
It's my understanding that all such properties must go to auction first. If they don't get sold then I'm not sure what happens, but I imagine some counties might be more willing to deal directly with an investor at that time... Gotta do something. Most of these types of auctions are run at the county level - on the courthouse steps, as it were.