All Forum Posts by: Derrick Lind

@Dan Mahoney, your initial post is a masterpiece. On behalf of all the noobs out here, thank you. I’m in CA so there will be differences but most of it is quite applicable. Thank again.

Also thanks to all you other posters. Your responses add additional flavor to this topic.

I love BP!

I’m planning my first tax auction now and getting all my prep work done now. Best of luck to you guys out there. Happy New Year.

I’m in CA and looking at buying at my first tax auction. It’s coming up next month. I have my list and am trimming it down and gathering info as I do that.

I think my next step is to check some of these properties for liens and such. I’m not too concerned about IRS liens as they seem to handle themselves out in a few months. Yes there is risk on the Reno costs. I’m trying to balance the costs of doing prelim title with the risk of not. ProtitleUSA can do some title work for about $80 or is each. If I did 10ea that’s about $800. Not too bad but I won’t even know if they will go to sale.

I can do some work myself but am new to this whole thing so could over look something. Seems like relative to the potential upside the lien risks seem generally small. But I don’t know.

I’ve heard people getting title companies to do free ones for them. I need to try this. If I get one then I’ll need to have my title cleaned after with a quiet title process anyway. So maybe there is something on the other side for them if I win one.

Any tips on getting cheap bulk liens searches would be helpful. Or any other advice.

Definitely read Greene's book.  It's a must.  Brandon's rental property book is also great.

Best of luck.  Hopefully, we'll see a flow of success stories from you over the next few years.

Isn't this community great.  Gotta love the BP spirit!!!  Thanks @Joshua Dorkin!  (and others)

Thanks for your all your input on this title/lien issue. I still have a lot to learn, but it's great having access to such excellent advisors. I'm in debt to you all, and will be sure to pay it back over the rest of my REI career.

This level of response is only possible because of members like you guys who take the time to contribute.  So .... cheers to you!  Have a cold one on me!  I'll be glad to buy one and share a few with you in person once this lockdown thing is behind us.  Maybe at a future BP Con?

@Tom Gimer  Thanks.  I agree.

Two questions though.

1.  If the bank cleaned up the title when they foreclosed, why would they post a title report that shows those liens in their auction posting?

2. I agree that my title company should review the property records to ensure we found everything, and I'll ask anything remaining to be resolved. My main question is will I have an out with my EMD if they refuse to resolve it. I think that is my risk is my EMD once under contract. Right now, I'm bidding so I need to understand my exposure to those liens now, prior to all the DD title work.

@Tom Gimer thank you for your thoughts. I agree with you on the known liens. I’m a total novice but understand the basic principles. The insurance is for something that was missed.

My initial question was should I expect the bank to resolve those liens that I found in their own preliminary title report. In this case they have told me about them already of me bidding on the auction. If I bid 80k for a 130k house great but not if it has 102k tax liens and judgments. If they will clear them or I have an out then I'm willing to bid on it. The SATX auction.com sales agreement is less clear than others I've seen. Other agreements directly say that the buyer has the ability to request cleaning up any issues that are found in their title search. But they aren't obligated to clear them. However if they don't I can walk with my EMD in hand. Even with this language they don't have to clear them but at least I have a solid out.

I'm mostly trying to see what people have experienced on such REO online auctions WRT liens.

Thanks again everyone for your input. I love having a resource to get answers on such issues.

I'm looking at bidding on an auction REO in San Antonio, TX. Fortunately, Auction.com provides a title report (for whatever it is worth) with their listing. Their report shows about $102k worth of liens (federal tax liens and judgments). I understand from most of the postings that REOs will typically purge most liens. I think whatever is shown in MY title report, I ask them to clean that up, then they must choose if they will or if not then I walk with my EM deposit. Is this correct?

I'm a little gun shy over the tax liens and judgments. I remember seeing that those types of liens are always senior. I don't want to get stuck with these things. I just want to ensure my understanding is correct. I know the right answer is to have my attorney review the condition, which is probably a good idea. Also, I need to review their contract to see what the outs are for me getting out with my EMD. This amount is huge, and nearly equal to most of the ARV of $130k.

There is another similar property with much smaller tax liens, but same issue applies.  Apparently, this is a thing in San Antonio.  

Be careful out there guys!

@Justin Tahilramani. NC all the way!

I was top bidder on a Hubzu SFR REO auction in Fayetteville, and the reserve was met. I think I just bought a house. I know it's not final as the offer hasn't been officially accepted yet but I'm excited. Looking forward to going through the full purchase experience. This will be my first as an investor.

Thanks for the fun posting. It’s good to see all the activity that is out there. And know people are still active and making progress in their own way. Good work bringing some positivity to us all. Cheers!

@Alexander Felice. I’m curious about your criteria mentioned. What is meant by minimum 1.3 price/rent? I thought lower price/rent was better. I’m guessing you are meaning compared with a 1%rule I.e. minimum of 1.3% rent/price. Please confirm. That sounds great. I live in Bay Area and cash flow is hard to come by out here.