All Forum Posts by: Bruce Lynn

What state is the condo?

@Kalen Mills   Were you able to get this one worked out?

Interesting....I do see a Denton County sale from last month. My AVM says $300K value. Last mortgage was $136,000. HOA lien was sold for $8000. So that probably is an interesting deal. I'm thinking no redemption for HOA judgement, but not sure about that. Take possession of the house, pay off the mortgage and get a house for about 1/2 price with some work.

@Felipe Lois Affini   Collin County typically does not have a lot of tax sales.  Big County, Nice County for the most part, but that mostly means newer homes with mortgages where the taxes will be escrowed to the lender and the lender pays them.  So there are less chances for the properties to go to tax sale.  Mostly what we see at tax sales is older paid off homes...so with 20-30 year mortgages...that will mean homes that are that old...20-30 years old or older.

Happy to meet up with you when you are in Texas although I am pretty busy day before and day of the foreclosure sale...first Tuesday of the month.

In most cases you probably need to attend the auction in person, bid and pay.  

Struck off is an option if you can't attend in person, but for the most part the stuck offs are not interesting.

Not sure if Texas is the best state or not, but here are a few ideas.

There's not really much of a struck off list in most places.  

Every county handles this a bit differently.  Some allow you to bid immediately after the sale....some don't allow that...some put them in the auction again in the future one or two times, before they really hit the struck off list that you could bid on.  I think there are a few places that hold them for a couple years to get rid of the redemption /contest issue and then resale them either at auction or on the struck off list.

So you want to know what is the situation, before you immediately begin fixing the house.   You want to know what the redemption period is, if any before you start fixing.  If for some chance there is a redemption or contest of the sale, you are only limited to recovery of your purchase price plus the penalty and repairs that were due are safety, security, or preservation of the property.   For example if you had a bad roof, you might be able to put on a new roof to preserve the integrity of the property, but you might not be reimbursed for paint, tile, carpet if it was not needed..to protect the safety or security of the property.

Redemption are probably rare....but they do happen.  I have one going on right now.

Some say the redemption period is 6months, but I think in reality is 2 years.  Redemption period starts once the deed is filed with the county in your name in most cases.  As mentioned above sometimes the taxing entity will strike off in their name and then not resell it until the redemption period is over and then if you buy there would be no redemption period.

You are correct about not getting straight answers.  That is because most of the time you won't talk to anyone who really knows...and often the people you talk to at the law firms are not attorney's or even paralegals..sometimes they're just office staff.   Not a slight at all...some know plenty and share plenty, but not always.  Sometimes the taxing entities don't know.  I called one county this month about the December sale and the only person in the office said there was no sale.  I pushed and pushed and then she said the Tax Assessor is out until 12/3 so they couldn't have a sale on 12/4.  Finally was able to confirm there is a sale.

So after you buy at the sale or even after the sale it may be anywhere from a couple of days to maybe 4 months before the deed is filed.  Normally about 30 days in my experience, but had one last month filed same week, and another one last year took about 4 months or maybe longer.  So the time period, either 180 days or 2 years doesn't start running until the deed gets filed.   Working on one now that has taken about 3 months to get the deed.

What counts.....well you have to think of what a judge or jury might find in a court of law.  I probably would not want to test these theories for fear the decider wouldn't agree.   Every expert I know says don't rehab them....change the locks, fix the leaks, repair the broken windows, but don't replace the carpet, the countertops, etc.  They often tell you that at the sale is well.  If it is a vacant lot, don't build a house...until the redemption period is up....I'd say until 2years is up.  

Be aware it is not only the owner that can redeem, but someone who purchases their rights.  There are plenty of people watching...you make the house really nice, maybe we hunt down the prior owner, give them $1000 for the redemption rights and buy the house back from you.  Believe me...there are people watching.

In my experience including in your county Brazos....the sheriff sales are mostly tax foreclosures, not judgements.  There may be the occasional judgement but I would thinks this is rare.

They are held inside at the Brazos county courthouse atrium.  Fair amount of people ready to buy.  

In my experience few have mortgages.  If you think about it most lenders require escrow of taxes, so they know the taxes get paid.  If that is not the case the mortgage company is still notified and will pay the taxes, then do a mortgage foreclosure against the owner if they don't catch up.  

When the list comes out you will see properties with mortgages, but they tend to get paid off before the sale, or even the morning of the sale.  

Theoretically if the sale goes through, the mortgage company will see the change in ownership when the deed gets filed.  Then they will contest the sale....and it will end up costing you money.

Probably what you want to focus on are sales without mortgages.....but that's the majority of the tax sales anyway in Brazos.

Hope this helps.

I go to tax sales every month for years now.  It would be rare that a real ranch not sale at the regular monthly sale.  Occasional but pretty rare.   You can occasionally find some lots, but have I have seen are not very interesting for investors in most cases.  They might be interesting if you lived in the town and wanted to build a house, or it was the lot next door and you wanted to expand your own yard.

The other trick I think you will see is that the values are tough to make much money.  It's a fair amount of work for a fairly small return.  Let's say you pay $1500 for one that is worth $10,000.  You may have to hold it for a couple of years, pay taxes and insurance for a couple of years, then fees to sell it...maybe a survey and title insurance.  So 3 years later maybe you make $3000-$4000.  

Not impossible but fairly rare from what I see.

The other trick is how do you do it long distance.  For the most part in today's world you have to be here and bid in person...and pay the same day.

One thought is, I think investment property might be very different from the home you want to live in.  I often tell my clients don't mix the two up.  For example I often think almost the lowest price you can get for an investment property is a positive.  You may not want the fanciest house....less granite, less high end appliances, less yard for example.... however where you want to live and you will take care of might be much much nice.   Here in Texas for example $150,000 might get you a nice rental.  I would be less excited if my investor clients wanted to buy $300,000 single family for investment.  People do it, but the market is much more robust at $150,000 for rental than at $300,000....at $300k the market is much thinner. 

Hope that makes sense.   There's also a limited market for 6 month rentals.  Possible, but less popular, but that also depends on where you buy.   That might work in Florida for example where people want to live for the winter, like your fellow Canadians, but don't want to be there for the summer, so you might rent it for 3-6 months in the winter, and then you live it in during low season.  This can complicate tax matters so that is something to think about too.

1.  "Adjudged Value"  is typically the tax assessed value.  I see different amounts in different counties.  In theory it should probably be the value at the time the suit is filed.  This value can often be way way off of market value.   Sometimes way too high and sometimes way too low.  Might be a way to weed out properties...so for example if min bid is $20,000, but the adjudged value is $10,000, maybe you skip that one.  However, I think I saw one tonight that had $1200 adjudged value, but Market Value was about $100,000.  I almost skipped it, thinking it was probably a vacant lot.   Minimum bid is typically back taxes and all the fees associated with bringing the property to sale.  Attorney fees, filing fees, etc.   Minimum bid can also be thought of as the starting bid.  This is also through the date of the judgement...and it is not uncommon in the larger counties like Tarrant for the judgement to be 2-3 years back, so taxes will still be owed since the judgement date in many cases.   Be careful about that and know what is owed.

2.   Payment....every sale is different.  Some want cash, some don't.  Some want cashiers checks...a handful will take personal checks.  Most want it at the time of the sale or very shortly thereafter.  Last month was at one that announced 30 minutes after the final sale.  Cashier check or cash.

3.   Non-governmental liens should get wiped out, but it may take work to get them removed.  It's not always automatic as others have mentioned.   Good example in Tarrant County is city liens for mowing...typically they are not wiped out.  If there is a big mortgage and they just missed the tax sale, my thought is they are going to find out when the deed changes the ownership....then they will contest the sale and they'll win and you'll spend attorney fees defending the suit.

Best wishes and good luck.  Do your research.  Go to a few sales.  Talk to people.  Watch the properties that interest you and what happens to them after the sale.