All Forum Posts by: Helen Kirk

I am just getting started and am arranging my finances to purchase my first property. I'm leaning towards getting an LLC (already drafted the Operating Agreement), and putting any properties I obtain for rental purposes in a trust with the LLC as the beneficiary. I imagine I would put any property for flipping purposes directly in the LLC without being in a trust.

There are a few things I need to figure out before I do this. I have about 32K in liquid funds. I have also applied to get pre-approved for a loan (mortgage?) through a local bank to use in assisting with the purchase of my first property. Should I go ahead and set up the LLC, and put my 32K in an LLC bank account?

(1) Would that affect the pre-approval of the loan if I put those funds in the LLC.

(2) I have a little over a week before the auction of a SFH that I'm interested in bidding for. Would it make sense to bid through the LLC? Can I even get the LLC recorded and in place in a week? (unlikely)

It has actually helped me organize my thoughts by putting them down in this manner. I think my next step should be getting with a real estate attorney to get the LLC started. If anyone has any ideas that could be helpful, I would appreciate hearing them!

@Dennis Weber

A lot of liens, yes, but not the good quality ones. I went to the tax sale a few weeks ago with the properties picked out that I wanted to bid on. Unfortunately all the bidders were bidding a lot higher than just what was owed on taxes and I couldn't compete. I'm hoping to either get this auction, get another property that I know of that is going through a short sale, or get a duplex I found on the MLS that is just now going through foreclosure. I feel like I'm getting a slow start, not having purchased anything yet after a few months of educating myself, but I'm getting closer, and I WILL start investing in Real Estate soon, I know it!

I will be attending an auction in a few weeks, and I was also wondering if there were any liens on the property I am interested in, so I went to our county courthouse to the room they keep the deed records and spoke to the receptionist.  She was able to look up the property for me, and told me that it had a current bank loan on it that was being foreclosed upon.  I am assuming that this means the property is going to be a foreclosure auction, and not a bank owned auction.  The receiptionist found the registered owner and looked up any liens on that person.  There was a medical lien on his person, not attached to that property, and it was around 8 years old.  She didn't find any other liens, and there didn't appear to be a 2nd mortgage or home equity loan on the property either.  She did emphasize that she was not qualified to search liens herself and that any information that she gave me was not that of a title expert.

This made me a little more confident should I decide to participate in this auction, but I may only go as an observer anyway since I don't have immediate access to more than 32K in funds.

Hope this helps.

@Nick Hall Hey and WDE!

I live in Auburn, and like you, am looking for my first investment property. I have looked at a few, including a short sale, but am not quite ready to pull the trigger. Still going through the Podcasts and other information on this site.

I've joined a Montgomery Based Real Estate Investor's group, and have been to two of their monthly meetings. If you'd like to go, I'll let you know when the next one comes up. The coordinator is Mark Jennings [[email protected]]. I'm still working on my networking skills and would like to network with you as well.

Can you go into a little more detail please?

I'm kind of new, so bear with me.  Isn't a short sale when the owner is upside down on his mortgage?  This doesn't appear to be the case with this seller.  Could you use a "subject to" strategy to take over his mortgage, giving him 15K.  You would wind up with 55K equity this way, minus any rehab costs.

Make sure you have good insurance.  We have had a relatively calm few years, but the gulf coast is prone to hurricanes.

Dang it... I had a long response typed out and then hit a key that erased it all... anyways, I hope I remember everything I typed....

I have heard of what you described, but I don't know of anyone actively doing this.  I recently attended a tax sale in my county.  Buyers were paying a lot of money over and above the taxes that were owed.  I was amazed and wondered why they were doing this. They weren't necessarily getting bidded against for the larger amounts.  I know that they get 12% of interest on any overpaid amount up to 15 percent over what the taxes are, so that can't be the only reason.  I think it might be because the owner has 3 years to pay back the taxes and any overage plus interest to the buyer or they lose their entire property.  If the buyer pays enough down, maybe the owner will walk away.  That is the only reason I can think of for these large overages.

That said, the county revenue agent acted as if these overpaid funds were already part of the county's revenue, leading me to think that they don't give the owners much opportunity to recover the overpaid amounts.  If I were an owner, I would definitely want my share of that payment if I can't redeem the entire amount!  I kept a record of the winning bids and was wondering if I should contact these owners myself (for the larger amounts) and let them know for a small fee.  Not sure though.... should I profit from their loss, or am I doing them a service...

Hi Ethan,

I live in Auburn and have been checking out duplexes near the university.  You could potentially purchase one of these, live in one side and rent out the other.  I know of three right now that are up for sale in the range of 90K.  How would you arrange financing?

Helen Kirk

Hi Donnie, and welcome to BP by another new investor.

I know of a number of duplexes that are available in the Auburn and Opelika area.  You can find them by looking on realtor.com.  I have looked at a few, and some of them look promising.  I've walked through two of them, but decided that my first property will be a short sale on a single family home instead of a duplex.

There is also an active investor meeting each month in Montgomery, AL.  I went to the meeting last month (my first one), and was impressed by the networking opportunities available through the members.  Contact Mark Jennings for the next meeting.  His email is:  [email protected]