All Forum Posts by: Harvey Levin

Check With the attorney who provided the quiet tile or the title company that took care of your certificate. Without having the facts it sounds like there was not proper notice to the estate. 

Quote from @Sam Shinn:

Hi BP, I'm seeking opinions not legal advice on how to proceed:

I purchases a tax lien and had a deed issued in 2022. In 2023 I filed an ejectment suit. I named 2 previous owners in the ejectment suit. I was notified by the courts that one owner was deceased. I was recently contacted by relatives stating the last owner is also deceased which happened recently within the last 90 days. So both previous owners named in suit are deceased. 

This is the current issue before me: 

Relatives are now claiming the home belongs to them and have had an attorney reach out to me stating they will be filing something in probate court concerning the will but nothing has come about that in the last 30 days. Ejecment suit filed in 4/2023. Attorney contacted me a week later saying they would redeem home and mentioned he would file in probate but has not filed anything yet. 

A deed has been issued to me. 

What are my options? Home was deliquient on taxes since 2017. I purchased the tax lien in 2019. Received deed in 2022. Filed ejectment in 2023. Previous owner died in 2023. No attempts by any relatives to redeem at all. 

Previous owner lived in home up until death, now children are basically saying home belongs to them. 

I will answer as many questions as I can. Tax sale is not considered void. 

I always look to be sure there is a better investment to purchase. I always recommend that Investors who no longer have w2 income make sure to hold income-producing assets that produce enough income to cover their personal "nut".  Peace of mind and not having to  make risky deals just to pay the bills are a big plus. 

Quote from @Steve Lehman:

Try Circle City Roofing. Ask for Bill Wright. He is has been doing investing for about 20 years here in Indy. The other companies you mentioned are all corporate owned. They are going to over charge you. 

If you have to use one of them I suggest any of them except Bone Dry. They are rude, disrespectful, and there crews are lazy. That just my opinion. 

 https://www.circlecityroofingi...

 We have had the complete opposite experience with BoneDry. They have been excellent to work with. Constant updates and reasonable pricing. 

@Erich Henson  

You might want to consider selling on contract. If you get a decent downpayment and charge 10-12% interest you will do very well.  Also, contact sales are usually at a premium sale price due to inherent risk Be careful with rent to buy. In Indiana, for instance, the "seller" is still considered a landlord and responsible for all repairs regardless of what the contract states.  Several large rent-to-buy companies have recently found this out. A contract sale is different. Also, check with your attorney and CPA . My understanding is that in a contract sale all profits are paid as they come in at the cap gains rate but I may be wrong . 

Seller financing is very possible for the right seller especially now that it is harder for investors to find deals. It is a fantastic use of self directed ira funds.  Most Realtors do not understand it so they cannot explain the many benefits to the seller. You have to choose a Realtor who is experienced with it. I suggest reading up on any new strategies.  Not one source but many. Subject 2 is also going to be big over the next few years. Both were very big in the high inflation periods in the 1980's as well as in the  early to mid 2000's. Realtors who want to succeed in a slower market will learn about it. Those who have only been successful in a market where zero skills were required will not. The short period we recently experienced of just showing  up is over... for now.  It's all a cycle. Easy days will be back but for now investors ( and Realtors need new skills) . Sellers are always slow to adjust ( myself included still hoping for demand increase in spring) and  buyers are fast to panic. 

A mistake Investors often make is thinking that the HUD FMR applies to every property of that bedroom size. Usually, the FMR includes the utility allowance which would need to be deducted in order to come up with actual rent. If it is not included then move to step 2. Step 2 is that each tenant qualifies for a Maximum rent that is based on family size and Income. This can actually be higher or lower than the FMR without utilities however the rent still should be no greater than FMR (note that in periods of low landlord participation, some housing authorities may offer an incentive of 10-20% OVER the FMR to entice landlords. ) Step 3 is that each property may qualify for a different amount based on amenities and type of utilities. For example, in Indianapolis, all-electric homes have a higher utility deduction because electric heat, water heating, and stoves cost more to operate than gas. This reduces the amount available for rent. Step 4 FMR is actually based on the location and condition, not the city. Usually, the inspector will run comps to approve or adjust the FMR for the specific unit. Depending on the Housing Authority this process may apply to move In rent and renewals or may only apply to Move In. If it does not apply to renewals there can also be a difference based on each Housing Authority. Some may have a maximum increase allowed each year. Others may allow whatever the landlord wants so long as the tenant agrees. Section 8 is a HUD-funded program but there are no universal regulations. Each Housing Authority may file an Administrative Plan up to 1 time per year to modify the Section 8 HUD guidelines. As to how much a tenant would pay for the rent increase ..it depends. We just had an increase of over 15%. Part of the increase was paid by the Housing Authority but the tenant portion increased from $33 to $88 per month. If the tenant complains we have to decide if it is worth lowering the rent increase. I am having a discussion with a supervisor to determine the maximum increase where the tenant's portion will only increase to $50 per month as that is what the tenant is comfortable with and we prefer to keep this tenant long-term. My recommendation is to ask for a meeting with the local Housing Authority and ask them to help you understand how they operate. Get to know the Supervisors in Finance, Inspections, and Housing Specialists (caseworkers). Once you fully understand what the regulations are that apply to your specific Housing Authority it becomes much easier to be a Section 8, Landlord. Also do not be afraid to push back when you see that the Housing Authority has made a mistake. It happens often!

Quote from @Andrew Postell:

@Tyler Livingstone I see you have a response already but you should absolutely be leaning on other, local real estate investors on who they use.  None of this going on the internet stuff...that will lead to a disaster.  Use contractors that other investors have already worked with.  It's not foolproof but it will help limit the risk here.  If those contractors above work out, great.  If you want to continue to search, then join some Indiana/Indianapolis real estate investor group pages on facebook and ask other investors there.  You'll probably have some contractors say "use me" type of thing.  I appreciate people trying to earn business but you need to work through references if you are following me.  Thanks!

I recommend asking other investors for contractors they have worked with either several times or for someone who did the work over 12 months ago. Many times the poor quality doesn't show up right away. We are dealing with a client who now has major electrical issues and concrete poured into the basement drain after the contractor patched the basement walls. Plumbing issues also may not show up for several months. Pex for instance, if not installed correctly can leak at the connection joints.   Also, make sure you have a Certificate of Insurance including not only liability but work Comp Insurance. Anyone injured on the job be it a 1099 or an employee can go after the owner of the property  if whoever hired them does not have a Work Comp policy and nothing can be put in writing to avoid this.  

Quote from @James Wise:

Quote from @Richard Pallarino:

Hi y'all,

Any tips for places I should start looking into for properties to buy to then rent out to section 8 tenants? I've read about Cleveland, OH, Indianapolis, IN, Racine, WI, and Detroit, MI. Can anyone tell me if these areas are good places to do so based on experience? Any other places you can recommend are welcomed!

Thanks,

Rich

 People often try to compare Section 8 tenants vs regular tenants. You get a lot of people saying Section 8 tenants are tourble or Section 8 tenants are bad.

 When doing this people are missing the ball.

It's not Section 8 tenants vs regular tenants. It's having a rental in the ghetto vs not having a rental in the ghetto. If you buy a rental in the ghetto, you're going to get higher risk tenants. When dealing with a risky tenant pool, going with Section 8 reduces your rick because the tenants not paying the rent is the biggest risk you face when you've got a house in the ghetto.

In Indy most Section 8 rentals are not in the ghetto. They are in C or C+ areas.  We do not really have ghetto areas. yes, we have D-class war zones but Section 8 tenants do not move into those.  I prefer Section 8 in C Class (since 1985) because the tenancy typically is much longer than the market. Market tenants tend to move or buy houses as their  Income gets better. Most Section 8 tenants do not see incomes rise for very long.  They value having a nice place to live as they know there is not an abundance of landlords who will rent to them. I am only speaking for Indy as Section 8 as well as most aspects of Real Estate is different in each location.