All Forum Posts by: David Dey

@Wayne Brooks is right, and you are right.  There is a right of redemption that is available to the IRS for a certain amount of time.  (The time is different from state to state)  

1. In accordance with IRC § 7425, the Internal Revenue Service has the right to redeem real property which was sold in nonjudicial foreclosure action by a third party to satisfy an outstanding encumbrance which has a priority over the Notice of federal Tax Lien.
2. In accordance with Title 28 U.S.C. § 2410(c), the Internal Revenue Service has the right to redeem real property which is sold in a judicial sale where the United States position is junior to the foreclosure party.
3. The time period for a redemption after a foreclosure sale with respect to either a nonjudicial or judicial foreclosure is 120 days or the period allowable for redemption under State law, whichever is longer.

however, once the time has passed, as Wayne mentioned, it is automatically removed by "operation of law."

You are right, tax deeds supersede almost everything.  The only things that are not wiped out are municipal liens, such as IRS and State tax liens, but also local municipal liens like code enforcement.  

Just figure, the whole point of tax deeds are to pay municipalities, so they would make sure that they didn't wipe themselves out.

The main thing to look for is doing a name search in the county records.  If there is a lien against the person it will show up in that counties public records.  If it isn't there you should be fine. 

That being said, if you are new to searching public records, it might be better to hire a title company or title researcher to pull a search on the property for you.

Hope this helps.

Originally posted by @Robert Rainey:

Thanks for the replies and the connects guys. Im glad I posted up.

 @David Dey:

What source do you use for phone numbers? And i have been seeing this term lumpy mail throughout threads I research. Is this just an item (i.e. a fake key) to intrigue people to open to see what it is? 

Also how does a greeting card differ from say a postcard? When looking at DM companies Ive only seen postcards and letters advertised. 

 Lumpy mail is exactly what it sounds like.  Mail with a lump in it, pen, magnet, fake key, use your imagination, the lumpier the better.  (I received a letter that was actually taped to a huge bouncy ball, yes I opened it)

Greeting cards are one of the most opened mail out there.  When you see an envelope with balloons or snoopy on it, and you know it's a card of some sort, don't you open it?  That's the idea behind greeting cards.  

Hope this helps.

yes, anyone can come.  They do charge a cover, but it should be worth it.

Does anyone have any experience with the Charlotte reia?

I'm planning on going tonight as I am flipping a couple houses I just picked up.

Would love to meet some BPer's in the area as well.  :)

1. Can you purchase tax deeds with hard money? A) Not the traditional way. A standard hard money lender is going to require a lenders policy along with a mtg at the time of the loan. As someone had mentioned on another post in this thread. You have to have the cash up front to buy it. B) if you do have a good relationship with a backer or private lender, what you can do is actually have them buy it at the steps and then owner finance it to you, this way he has the protection of the property being held by him while you get the details of clearing the title resolved. (This takes a little educating of the lender, so it needs to be someone that you already have a good relationship with... Also, you need to make very sure that you have checked to make sure everyone has been named in the tax foreclosure and you actually will have clear title in the end. (What to really look out for is municipal liens like code enforcement and tax liens) oh and yes I'm aware that I used parentheses within my other parentheses, that is some high level parenthesesing) 2. Are there any seasoning requirements before you resell a tax deed? (ie. do you have to wait any specific amount of time before resale) You do not have to wait to resell, however there is a 3 year timeframe before any title company will provide title insurance without you either, 1) getting a quiet title. 2) clear the title yourself (example: get quit claims from previous owners and sats from previous lien holders... Easier to do than you would think but a lot of leg work) 3) use a service like cleartosell.com, I have used both tax title service and clear to sell and CTS is by far superior. First, CTS takes around 21 days instead of 45-60 days, which was my experience with TTS. Second, TTS does not give you true marketable title, (read the small print, you will have to use first American as your underwriter for the next 3 years with them) CTS is used by old republic but after the first time, you can use anyone and you get TRUE marketable title. (No, I am not affiliated with either service, but I am sold on CTS and I have done hundreds of tax deeds) 3. Is the most typical way of re-sale done using a quit-claim deed? Yes, typical approach to sell these are QCD. If you want top dollar though, use one of the techniques above and offer title insurance and a warranty deed. 4. If I buy a property at auction, do the back taxes automatically get paid for with the money I use to purchase? (ie. after I purchase, will I be responsible for paying any back taxes) Yes and no!! The minimum bid that is listed is set to pay the certificate holder that has applied for tax foreclosure. So in that aspect, you are covered. However, it doesn't have to be the oldest certificate holder that has applied for tax deed. Ex: 8 yrs back taxes. Anyone from the 3rd year to the 8th year can apply for tax deed. If it is the 8th year, he will have to "buy" all of the inferior certificates, then apply for TD. That's all 8 years paid in that scenario. And you are all set. The 3rd year however could buy the inferior certificates and apply, but if you bought this deed, you would still be subject to the 4th through 8th years certificates and you would be responsible for those back taxes or still be in danger of tax foreclosure yourself. Like the other guy said, do your homework with each deal. Hope this helps!!

Robert Rainey As you can see, many people have an issue finding deals. You're building up a buyers list without even trying. :) Regarding your actual question, if you are going to go with a DM campaign.m, I would recommend one of 3 methods, yellow letter, lumpy mail, or greeting cards. The most important issue is getting your letter opened and your message read. All 3 have a decent open rate (with my favs being #2 greeting card, #3 lumpy mail, and 4# yellow letter. "You miscounted," I know you're saying. "No, I didn't." My absolute favorite approach and by far the most effective approach is an actual call to the owner. If you have created the best list possible, then the best approach will be to actually call them. (More on that if you want) The thing is though, whether you decide to call or use one of the direct mail approaches, you need to choose the right list to reach out to. Are you going after abandoned properties? Are you going after pre foreclosure? What is the problem you are going to solve? (That is how you find deals, by finding people with problems and solving them) If abandoned, go a little deeper. Add behind on taxes. If pre foreclosure, maybe ask for only estates. This way you are mixing pre foreclosure and probate, or include individuals or private lenders as the plaintiff. The point is, try to make your list more specific to get a different list. Hope this helps.

"you can market all over the world, but your real buyer is just a stones throw away."

This is what my mentor Walter Riddle taught me over 18 years and over a thousand deals ago.

I have tried it both ways and I can tell you that he was telling me the truth.

"What does that statement mean?" You ask.  

Well here's how I can explain it to you then I will show you how to do it practically.

Back in 2005 or 2006, I bought a 75 unit apartment building in S Florida for 10k a door.  

I had an appraisal for the property at 1.5 million as is and 2.2 fully stabilized.

So I started marketing it on Loopnet at 1.5 or 20k per door.

That first weekend, I got over 1000 responses.  (No exaggeration, I still have the list)  Guess how many of those responses turned into a sale?  Give up???

Zero!!  Not a single buyer from that list, just a bunch of tire kickers.  (Not saying there aren't buyers there, this was just my experience)

In the end, I sold the property to a guy who owned another apt building just down the street.  See what I mean, your real buyer is literally just a stone's throw away.... Almost everytime!!

When I get a deal, the first thing I do is go to my property appraiser site and pull up a radius of about a mile surrounding my property.  (Some property appraiser/assessor sites are easier to navigate than others, but every assessor has a database of every property transaction in their county and you have the right to access that list through public records.

Look up the owners that are in the radius specifically looking for corporations and trusts and obvious investors (obvious investors are the ones that own multiple properties in the same vicinity) also look for the sales that have happened within the last year and you will have the perfect buyers list.  The only reason you will find these people on your list is if they actually pulled the trigger.

I have used this method more times than I can remember and it has almost always yielded me with my wholesale buyer.

Hope this helps.

Depends on how you do it. You are right that the biggest issue on a buy back scenario is when dealing with homeowners. The problem isn't limited to just that though. There is plenty of case law where the judge has ruled that the buy back on personal properties, (not as a corporation and not a commercial transaction) as a loan and as a result if the "loan" return is higher than the 18% then it can be considered usury. Take it to your Atty and, at the very least, get a letter of opinion from him/her to base your transaction on.

Originally posted by @Marcus Simon:

I've recently decided to start a career in REI. To increase my chances of success I've been reading a lot of books, posts on BP and I'm starting a licensing class in a couple of weeks. I also thought about the need for a mentor.

About a month ago an investor has posted several signs in and around my neighborhood stating that they're seeking a student to make $5k - $10k a month. I'm going to call because I figure it couldn't hurt. But, is it normal practice for investors to post ads like these?

Thanks,

Marcus

Actually, I know a number of investors that I've worked with that have used those bandit signs when looking for an assistant and or bird dogs for leads.

The positive is that you will normally get somewhat of a free education as you need to understand what you're doing in order to assist or at least to find deals.  

However, many investors will only give you a piece of the puzzle as they don't necessarily want to train their competition.  Also, make no mistake, you will not be salary or wages at all.  The "5-10k monthly income" will be finders fees and commission.  (Usually $500-1000 per deal based on how involved you are.)

Bottom line, there are positives and negatives to this scenario.  On one hand, you will be getting you feet wet and will get at least the start of the equation, and of course depending on who you're working with and how close you pay attention, you may get more out of it then others.  On the other hand, they will not necessarily give you the whole key and this is definitely not a get rich quick scenario. 

As long as you go in with your eyes wide open you can make a informed decision if this is right for you.