All Forum Posts by: Justin K.

Thanks Chris!  I would have never budgeted that much (maybe $2500 but certainly not $10K).  So that is very helpful!

Thanks Chris!  I understand that buying in these sales is risky.  In your experience have you seen the courts deciding that the property should be returned to the original owner (for whatever reason) and if so is the buyer compensated for the money and/or improvements they have invested in the property?

Would my title agents recommendation to hold the property for a year and gain title insurance before beginning work help mitigate the losses I could be exposed to?

How do we ensure that the county has made 'valid personal service'.  Will they provide their documentation of serving notice prior to bidding on one of these properties?  The reason I have shied away from tax sales is fear that the county didn't do their notices correctly and I would lose the property.  My title agent has given me the same advice, but wasnt sure how I could guarantee that the owner was 'properly notified' prior to me trying to purchase.  

I also find it difficult to believe that any owner would sign a quit claim deed without being compensated.

My title agent suggested that any property I would bid on and win at tax sale I should secure and sit on for a year prior to renovating.  Depending on the location of the property that can get costly from holding costs.  Just not sure how I can verify the county did their part to offer the 'valid personal service' to the owner.  Anybody have any advice on that?

^^ That is why I asked for Chris to provide us with some input ^^ 

I love it Chris!  You a wealth of knowledge!

So from how I interpret the statutes that you provided I can basically advise the owner and as long as they enter into their own lease agreement then I am not crossing the line.  I have done that with one of my friends, even helping them craft their own lease, but the lease was ultimately between them and the tenant.  

Thanks again Chris!  If you ever get to PGH let me know and I will have to take you out for lunch!

@Samir Shahani

I understand that to be the law as well, which is what frustrates me about not being able to help friends and family that desire to invest in real estate but dont have the time or get any enjoyment out of managing the asset itself.  Which is why I was curious about Chris' thoughts about managing with a partner broker and how that might work.  Because again getting the brokers license to manage property doesnt really appeal to me personally.

@Chris K.  

Great question Samir!  Others have asked me in the past if I would manage their properties.  I have never seen the financial benefit in obtaining a brokers license to be a property manager.  In my opinion, it is a lot of work to get the brokers license and then property management business model (as typically done) doesnt align the managers interest with the owners which tends to lead to management companies running on as small of a staff as possible to serve their owners somewhat marginally.  Certainly not as good as I manage myself.  In some instances, I would love to serve as property manager and help close friends and family achieve their financial freedom goals as I have been doing.

Chris, as the BP expert on PA law I would love to here more of your thoughts once you have a chance to read over the statute again.  Your thoughts are always appreciated!

What Chris said is correct in my county.  The weird thing in one of the counties I invest in is that the Taxes run Jan 1 to Dec 31, but the bill doesnt come until the beginning of March.  My experiences before I started investing in that county was taxes were always 'prepaid', so if the bill was due May 1, the taxes ran May 1 to April 30.  Long story short each county can have some minor differences to how they do things.  Just make sure you have the whole yearly taxes in your analysis and when they bill them or what periods they cover wont be a huge issue.  Missing a school tax for my one property would be a $2000/year mistake.  That isnt something you want to miss!

@Percy N.

This is how I do it. I believe that I am abiding by the law but I would encourage you to consult a local real estate attorney.

Q1: Kind of.  It is my interpretation that the law requires you to hold the security deposit (of >$100) in a separate escrow account.  Even if your lease term is a year your tenant may stay for multiple terms (we hope)!  So we always put the funds in there.

Q2: You do not need separate accounts for each tenant, but you do need to account for each tenants funds.  We keep a log with our escrow account checkbook and update it because we feel that is easier than opening a new account for each tenant and then closing that account every time a tenant moves out.  

Q3: You are just required to provide them with the bank name and address.  Which in my opinion is stupid.  The only thing it does for them is tells them you are following the law, but regardless of what financial institution it is held at they cannot access it.  Where our lease discusses security deposits we have a section telling the tenant where the security deposit is being held so we don't have to provide notice after the fact.  Again, trying to streamline things on our end.

@Chris K. just out of curiosity (basically my learning), does PA allow wage garnishment? 

Thanks @Chris K.! I agree with what you said about listing early.  After I have done my property inspection at step 3 I will at least know what repairs I need to do and can begin marketing there.  I will tweak that in my processes and procedures.  That article was also good and how I usually approach landlord-tenant relationship issues.  I think I will order 'getting to yes'.  I have gotten pretty good at getting to the heart of what tenants are after in a negotiation, but doing that for property (and business) owners for me has proven to be much more difficult.  

And what @Steve Babiak said is also true.  For the cost of a newspaper, its to cheap not to cover all my bases.

Thanks for the insight guys.  Love improving my processes and procedures!