All Forum Posts by: Denise Evans

You are absolutely right, and everyone should consider the dangers and your warning. BUT, before making a blanket condemnation of all wholesalers (I am not a wholesaler or connected with any of them) please consider the following points:

1. Yes, they obtain price quotes from the State and then resell their positions, basically. Can you do that yourself? Of course. BUT the pipeline is very long and very full, and you might not get a response to your price request for a year or two.

2. Some wholesalers have a pricing policy of $1,250 over redemption price for a tax certificate and $2,500 over redemption price for a tax deed. Depending on the property, that might be an acceptable amount of risk for a really cheap property. As real estate investors, we all have to balance risk vs. reward every day, all day long. This is nothing new.  Even with a price tag $5,000 or $10,000 over redemption price, if you know that going in and think the likelihood of redemption is extremely low, that might be an acceptable risk.  One must have enough knowledge to evaluate risk.  Your post will hopefully help people with that warning to gain more knowledge.

I agree, @Nathan Gesner, but that protects the new prospective landlord, not the one giving the bad reference.

Often a $25 gift card per tenant who executes one does the trick, as long as you have a disclaimer that if the certificate shows a problem, they still get the $25.

Arnold, lot rates depend on the market. You'll have to research the area to see where the market is.  There might be sewer all around but no hookup to that property, which might have been on a septic tank since before sewer was out there. If you can hookup, that is good, but usually there is a high fee to do that.

Plus, if it is relatively congested, what is the dirt worth for redevelopment? What is the zoning? Can it be changed to a more intensive use?

Coincidentally, my Multi-Housing News feed just send me notice of an article today about investing in manufactured housing.  I don't think BP lets me put external links in a post, but if you do a search on multi-housing news +manufactured +2023 I bet it will take you right to the article.

1. It is relatively easy to seize abandoned mobile homes under Alabama law.

2. Mobile home lots generally have the best cash on cash returns of any investment, but they are usually also the most management intensive.

3. Do you have sanitary sewer or septic tank?  If septic tank, you must check local health dept regs for how many mobile homes allowed on each septic tank. The last time I checked, it was a maximum of 4.  It might have changed. Also, check into what has grandfathered and what not. If regs have gotten more strict, a failed system might be very expensive to replace because then you will be on new regs. Tenants are VERY VERY VERY hard on septic tanks. They never follow the rules about what they put down the drain, about not doing 18 loads of wash in one day, and about not parking on top of the field lines.  Count on pumping out the septic tanks at least once a year, just to be safe.

4. What are the roads like? Are they concrete or crushed stone or chert or what?  Are  you set up to constantly ditch and crown the roads? Which brings up another point, where does the water go? Have you observed runoff patterns while it is pouring down rain?

I'm a commercial broker in Tuscaloosa. I can help. Contact me.  Denise

You are allowed to take possession with a certificate. You must take it lawfully, however. That means

1.  The owner gave you permission such as signing something turning possession over to you, or signing a lease with you. OR

2. You obtain an ejectment order from a court after filing an ejectment lawsuit against the owner. They can redeem in that lawsuit, but they have to pay your legal fees. OR

3. The property is LEGALLY abandoned, meaning the owner has departed and has no intention of every coming back, ever redeeming, every selling the property.  If the owner is dead, it is their heirs who must have that intention. A property that is vacant and has been vacant for  along time and is in really bad shape is not, all by itself, abandoned.

It depends on what kind of policy you purchased. The contract controls what your rights are. I think most people with agents get the replacement cost coverage. If you have replacement cost but you decline to replace, then they write you a check for only the actual cash value. If you DIY the replacement but submit proof (photos) the work was done and completed, most will pay you the replacement cost established by the adjuster. Some will not. Ask your agent. If you purchased online and don't have an agent, ask the help desk.

Yes, you can sign a contract to sell property or rights you do not yet own.  Outside the tax sales area, this is common with options, or even just flipping real estate purchase contracts.

You need to have an "out" in case you are not able to purchase the tax rights within a certain time period. It does not have to be done through a closing attorney, but an attorney will have to prepare the deed. Usually there is a $50 to $75 charge for that. If the buyer or the seller is an individual (not an LLC or similar) the party that is an individual can prepare the deed. In Alabama, the deed must say the name and address of the preparer. In Tuscaloosa county, the deed must include the Source of Title. Maybe other counties are similar. I know Jefferson does not require it. There is also a required from that includes information about the transaction. Look up almost any deed filed after 2019 or so, and you'll see the form. You can include the same information in the body of the deed, but most people use the form. If the seller is married or single, you have to say that. If it is a local or out of state entity, you have to say that. (Example: Alpha LLC, an Alabama limited liability company or Bravo, Inc., a Delaware corporation)

Buying over the counter from Alabama Department of Revenue can take a long time. Once you receive a quote, you have 10 days to complete your purchase. Because of wholesaler activity, and people asking for quotes on 5 - 10 different days in a row (extending the effective time period to 50 to 100 days) there is a tremendous backlog in some counties. I have heard of people interested in Jefferson County properties being told they will not get a quote for 4 or 5 years because of that.

Redemption rights in Alabama are exceptionally complicated. Not that difficult once an expert explains them, but it takes a while to explain. And, you have to be able to remember a large number of moving parts to know the answer in any particular situation. There are a lot of so-called experts spouting stuff that is completely wrong because they never completely understood it the first time somebody knowledgeable explained it to them. Or, they never talked to anyone knowledgeable, but just picked up advice for investors who have been lucky, not educated.

Do your homework!