Abandoned Property & Tax sales -- please advise

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Abandoned Property & Tax sales -- please advise

Jane Leyderman
Chicago, IL · Member since 2012 · 3 posts · 0 votes

Hi BP-ers,

Like a lot of people, I've been reading this site for a long time, and this is my first post. I am very interested in wholesaling and have just started to really explore it.

I've read that a great source of leads is houses that look abandoned. There's one in my neighborhood--boarded up windows, etc., definitely abandoned.

I looked at the tax assessor's website (I live in Chicago), and saw that the property's taxes had been paid by a tax buyer for the past 3 years. Cook county holds tax sales once a year.

I also looked at the Cook County Circuit Court website and found that the property has a Lis Pendens against it, filed in 2011.

My questions are:
1. If a tax buyer bought the taxes, doesn't that person have a lien against the house/can't they take ownership of the house?
2. Is this place a wholesale candidate?

Thanks in advance for your advice!

Jane

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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y

Congratulations on your first post - you don't have to e shy.

Yes this property could be a great wholesale candidate. I don't know if your area sells tax deeds or tax liens. For wholesaling purposes it doesn't make much difference. I will reply as if it is a lien. If it is a tax deed than in most areas there is a redemption period where the owner can reclaim their property.

1) Yes the tax holder has a lien against the property. This simply gets paid off at settlement. Yes the tax holder can foreclose. In either case this is negotiating leverage with the current owner. If it is an active foreclosure the issue is more urgent. However until the foreclosure is final, the owner has the right to redeem by paying off the taxes.

2) Yes this property could be a great wholesale candidate. I don't know if your area sells tax deeds or tax liens. For wholesaling purposes it doesn't make much difference. I will reply as if it is a lien. If it is a tax deed than in most areas there is a redemption period where the owner can reclaim their property.

I suspect the lis pendens is simply the tax foreclosure case. It could be something else which might complicate the deal but also adds opportunity.

Now the above is general info and the rules vary by state, and even from county to county.

Step one is, track down the owner and see if you can work a deal. I did two deals last year with just this situation. One I paid $1,200.00 and the other I paid $2,000.00. Of course those were exceptional deals and not at all typical.

The hard part will likely be finding the owner and if the owner has truly abandoned the property, he or she may not be at all motivated.

Good Luck - Ned

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    14y

    Congratulations on your first post - you don't have to e shy.

    Yes this property could be a great wholesale candidate. I don't know if your area sells tax deeds or tax liens. For wholesaling purposes it doesn't make much difference. I will reply as if it is a lien. If it is a tax deed than in most areas there is a redemption period where the owner can reclaim their property.

    1) Yes the tax holder has a lien against the property. This simply gets paid off at settlement. Yes the tax holder can foreclose. In either case this is negotiating leverage with the current owner. If it is an active foreclosure the issue is more urgent. However until the foreclosure is final, the owner has the right to redeem by paying off the taxes.

    2) Yes this property could be a great wholesale candidate. I don't know if your area sells tax deeds or tax liens. For wholesaling purposes it doesn't make much difference. I will reply as if it is a lien. If it is a tax deed than in most areas there is a redemption period where the owner can reclaim their property.

    I suspect the lis pendens is simply the tax foreclosure case. It could be something else which might complicate the deal but also adds opportunity.

    Now the above is general info and the rules vary by state, and even from county to county.

    Step one is, track down the owner and see if you can work a deal. I did two deals last year with just this situation. One I paid $1,200.00 and the other I paid $2,000.00. Of course those were exceptional deals and not at all typical.

    The hard part will likely be finding the owner and if the owner has truly abandoned the property, he or she may not be at all motivated.

    Good Luck - Ned

    1Reply
  • Jane Leyderman
    OP
    Chicago, IL · Member since 2012 · 3 posts · 0 votes
    14y

    Hi Ned,

    Thanks so much for your response, I appreciate all the insight. You're right that tracking down the owner is extremely difficult. I believe he is deceased, and I am trying to find the contact information for his children.

    On different note, when you approach an owner, how do you present the deal? If you plan to wholesale the house, do you let the seller know this, or do you simply tell them you'd like to purchase the house and make a cash offer?

    Thanks again,
    Jane

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  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    14y
    Originally posted by Jane Leyderman:

    On different note, when you approach an owner, how do you present the deal? If you plan to wholesale the house, do you let the seller know this, or do you simply tell them you'd like to purchase the house and make a cash offer?

    Thanks again,
    Jane

    I let homeowners know that I buy properties for myself and also find properties for other Investors (which is true). They never have a problem with it. Other wholesalers tell homeowners that they have a 'partner' who will ultimately be buying the home and they would like to bring her buy to see for herself.

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  • William D.
    Member since 2009 · 155 posts · 41 votes
    14y

    Just to chime in on finding the heirs, generally, if someone dies they will probate the will (assuming there is a will) in order to get title to the property into the intended beneficiary. The will gets filed in probate court and is a public document. You can then determine who the heirs are and who the executor is by viewing the will.

    If there is no will and the property was not survivorship with another owner then the only way for title to come out of the estate is through a court approved deed. This means you will contact the court and the fiduciary and not the children.

    The distinction is subtle but can save a lot of time sending letters and making phone calls to people who are not even in a position to negotiate.

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    14y

    You are looking for motivated sellers, If they are motivated, details like you wholesaling it aren't important to them. If they are not motivated, you probably don't have a deal any way.

    If they ask, I say "sometimes I rehab the houses and sell them, sometimes I hold them as rentals and if if it doesn't work for me I can usually find another investor who would be interested."

    I do not say "what is is worth", Just what it is worth to me.

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  • Jane Leyderman
    OP
    Chicago, IL · Member since 2012 · 3 posts · 0 votes
    14y

    Thanks, all. And sorry for the late response! I never received an email that there were new responses.

    William D. -- Thanks for this info. I will check the probate records.

    Ned Carey -- You're totally right! If they are motivated to sell, the details aren't important. It's easy to get hung up on the details when you're new =)

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