All Forum Posts by: Drew M.

I suggest you check out IRS Publication 3402, from which I copy and pasted the following:

Now you will need a tiebreaker on the next question: Is the business entity a community property? Sure you reside in California, a community property state, but the LLC is organized under the laws of the state of Indiana. All I can say is consult with a tax professional or three.....good luck!

Hello @Roman M., I would be interested in receiving more info about your pool of tax liens.

Unfortunately you can't auction off students as collateral when they default on their loans.  ;)

It's an interesting thought but that is simply debt collection work which has all sorts of challenges of its own.  Although student loans are typically non-dischargeable I am sure that the state and federal consumer-protection laws would still apply.  You would probably get sued frequently if you were doing high volumes, whether or not you actually ran afoul of the FCPRA etc.

I agree with @Ned Carey - depends greatly on how title to the property is held.  Since you have already tried and failed to obtain a loan that tells me title was not held via an entity.  

I am also guessing this is some sort of income tax or other personal tax lien which means it has super priority and no lender is going to touch it unless you get the lien resolved.  

If I were you I would be looking to get out of the house and get away from this 'partner' as soon as possible.

Welcome from just up the coast.  There are opportunities out there yet.  Obviously the cost of real estate in California is a higher barrier to entry than other places.  But that's just the beginning of the calculus not the end.  

When we bought our first house, it was a duplex and we lived in one unit and rented out the other.  This was before I had ever heard the term "house hacking."  But it was a great decision--I am not sure why so many people around you discouraged you from doing so.  Among the lessons I have learned from the experience are that multi-family properties are the way to go for investment purposes.   

If you are handy (and have the time) you can get a lot of value out of purchasing a property that needs some repair work and taking care of it yourself.  

Good luck on your investment plans...

The first-position lienholder bank can't lose like this.  You don't mention a jurisdiction so this is really just an apocryphal story.  But if you think about, it really doesn't make sense.  A judicial foreclosure auction is for the benefit of the lienholder.  Therefore, in pretty much any jurisdiction, the minimum starting bid is going to be the amount needed to make the lienholder whole.  Then if there is any overage it goes to any junior lienholders and finally to the homeowner.  

What the credit bid does is allow the first-position lienholder to acquire the actual property without putting any further money down.  If any bidders want to come over the top of the credit bid, that is allowed and will result in the first-position lienholder receiving payment.  Title to the property would go to the winning bidder.

So in the scenario you describe where the bank doesn't submit a credit bid, assuming there are any other bidders the bank would still get paid.  It makes absolutely no sense that anyone would set a minimum bid of $1k on a substantial lien foreclosure.  

@Account Closed Thank you for the reply.  I'm not too worried about the opinions of anyone who would shy away upon hearing what my profession is without knowing any further details about me.  In reality I consider my personal integrity and reputation to be of utmost importance and I am confident that will be readily apparent to anyone who interacts with me.  

Here's my favorite lawyer joke, which was told to me on my wedding day by a much older attorney.  I apologize if anyone thinks it is too crude:

An accountant and a lawyer are talking over drinks at a bar.  The accountant is complaining about his poor dating and social life.  The lawyer tells the accountant, "hey, I have great success when I meet people at bars and tell them I am a lawyer.  I always take someone home at the end of the night."

Spying an attractive member of the opposite sex at the bar, the lawyer suggests that the accountant go up to the bar and introduce himself as an attorney instead of an accountant.

The accountant decides to try it out, and what do you know, he's a hit. It;s only a few minutes before he is going home with his mark.

Back at the accountant's home, the the newly acquainted couple are getting undressed.  The accountant starts laughing hysterically.  "What's so funny?" The accountant says "I've only been a lawyer for 20 minutes and I'm already screwing somebody!"

Anyway, you hit the nail pretty head on with what I am interested in.  I am interested in getting more involved in liens as well as distressed notes/distressed properties.  I'm also interested in buy-and-hold RE investing for long-term cash flow generation.  Thanks!

Hello everyone!  I'm an attorney by day, real estate investing hobbyist by night.  I bought my first house about three years ago.  Although my only prior experience with rentals had been as a tenant, I ended up doing what is known around here as "house hacking."  That was my first taste of leveraged real estate investing.  It opened my eyes to the possibilities when you can generate passive cash flow based on other people's money.  My stepfather is a financial planner and he always told me that investing in the stock market was historically a better investment than real estate.  But I realize now that is only if you ignore the leverage you can get with real estate.  I got hooked on the concept and hope to grow my real estate "empire" to be a substantial source of income eventually (although my wife says I can't call it an empire with just two houses.) 

Currently have just one investment property in addition to our SFR residence, which was purchased last October. The SFR residence is zoned multi-family, so there is the possibility of adding a second unit later on, which I intend to do when I have the spare cash.

I've also got a few other personal projects going on.  Working this summer on converting a family-owned cabin into a vacation ski rental.  I also recently purchased some tax lien certificates on improved residential and commercial properties in Colorado as an experiment.  I have been research tax lien certificates for several years and have finally pulled the trigger on a few.  I started small in scale just to get some experience, and expect that I will end up getting my certificates redeemed within a year @10% simple interest.  I suppose there is a minimal possibility that the certificates will remain outstanding long enough for me to foreclose the properties but that is so remote that I am not counting on that in any way. 

I am interested in more exotic strategies than flipping or wholesaling because I think it plays more to my strengths.  While I can swing a hammer without hurting myself or others, I am by no means "handy."  I don't have the time or the interest in fixing up a property myself.  Thanks to my day job though I have had quite a bit of experience with real estate litigation, including foreclosures, litigation between co-owners, and property tax issues.  I feel comfortable reading a title report, pulling vesting deeds from a county recorder's website, or navigating special assessment districts.  When I first started lurking on BP I was thinking that an attorney would be an attractive partner for some people, but I am getting the impression that most people around here view their attorneys--if they have one at all--as a line item expense on their budget and not an integral part of their operations.  

Anyhow I am looking forward to participating on the discussion forums here.  While I can't give anyone specific advice about anyone's legal matters I hope I can still make some good contributions to the community and get to know some like minded folks.  See you out on the forums!

I suspect that the IRS, being the IRS, would likely not give any weight to your county's tax assessor records. If there is an audit I am guessing if they can make some sort of plausible argument that there is non depreciable land included with your title they will do so. 

I can also imagine a scenario where the common areas are owned by some type of non profit HOA where the condo owners don't have alienable ownership right but merely some type of permanent easement. I'm speculating though.

You might want to see if the property has any delinquent taxes.  If no one has been paying the property taxes, you might be able to acquire the lien for delinquent taxes that you could then foreclose.  The main advantage being that tax liens usually have priority over all other liens (I'm not familiar with NJ law).