All Forum Posts by: Nancy Roth

@Ned Carey don't you have to quiet title in order to sell it anyway? 

Hi, @Hen Ley, the bank-owned properties I've bought have not had ledgers or any information at all, and a courthouse-steps type auction does not give you much leverage to find anything out. The only thing I can think of is to contact the auctioneer and ask if the owner is open to a pre-auction bid. Maybe you can enter a dialogue with owner that includes due diligence on cash flow. Are you working with a realtor? Perhaps the realtor can be an intermediary. If you cannot get any information at all, you need to assume the worst (no cash flow and possible eviction) and bid accordingly. 

I like @Account Closed's suggestion that you talk again to the tenant to ask what repairs are needed, and determine whether the tenant is interested in staying--or is planning to move. 

I have had some success buying investment property via live auction without having seen the interior. How well you know the neighborhood? Have you looked at recent sales there? Have you done much house renovation or repair? Do you have contractors you can call? 

Suggest you get a ledger and lease from the auctioneer showing rent and record of payment. If it's not cash flowing and you'll have to evict the tenant, you are buying a headache. Would you be ready for that, even if the hammer price is right? Also don't forget the buyer premium!

@Ned Carey said it best: there's a lot of risk buying property that way, and you can only hedge it by setting your maximum bid low and be willing to walk away if the bid price goes above it. 

@Patti Camarote  

I beg your pardon for missing this when you wrote last fall. I had to step back from this project in 2017, because it became too hard to navigate the changing policies in government healthcare support under the current administration. We were seeing an attack on publicly supported healthcare programs in the U.S., and I couldn't (and still cannot) foresee where healthcare is headed in this country, let alone what kinds of support families can expect ion providing for their disabled loved ones. So I regretfully decided to sell the building I'd hoped to develop for adults with disabilities.

But there are groups of parents who are thinking like you all over the country. Here's an article in the Washington Post from earlier this month about one such family in the DC area. 

https://www.washingtonpost.com/local/social-issues...

I don't know if you are still interested in discussing but if so please reach out to me via Bigger Pockets account. 

@Ashish Acharya Right! Far better than 1031. But because the law is so new, and IRS has taken all year to draft  regs, QOFs are only now starting up. So it feels like I'm digging for information on Qualified Opportunity Funds that are still kinda in formation.

Another obstacle: the few I've found all require their investors to be accredited. I was particularly surprised to learn Fundrise, which champions RE investment opportunities for unaccredited investors, has set up a QOF with that restriction. When I wrote to them about it, they responded: "Our Opportunity Fund is filed pursuant to Regulation D of the Securities Act, which requires investors to be accredited." 

May I ask which ones you have been looking at? Or are you perhaps considering forming a partnership and setting one up? 

A new capital-gains deferral option was created by the tax act Congress passed in December 2017, which created a set of "Opportunity Zones" nationwide. According to the law Qualified Opportunity Funds (QOFs) can be established to channel investment into businesses or development in these under-capitalized Opportunity Zones, mostly in low-income or transitioning areas. The incentive for investors is the deferral of capital gains taxes in stages over a period of years. 

Has anyone been exploring this tax deferral strategy. My CPA thinks it's great, but it's very new. Opportunity Zones were only just published, and the Dept. of Treasury/IRS is still working out the rules. 

I realized a lump-sum profit on a tax-lien property I sold this year and am extremely interested in hearing any intelligence on it. 

Hi, Marquis, I'm not practicing as a realtor at this time, though I continue to hold my license while focusing on developing my rental business. 

There are no good or bad neighborhoods, in Baltimore or anywhere else. There are only good and bad deals. It is helpful to work with a realtor in setting your investment goals and looking at prospective acquisitions. I can refer you to someone who can help you but you need to reach out to me individually on BP, as they don't allow us to post contact information in the forum. Feel free to do so.

Best,

Nancy

Thank you all. Just to clarify, these tenants came with the house, which I bought at an extremely good price at a foreclosure auction in 2014. I hadn't screened them. But they were in pretty good shape when I acquired the property. They had been there 8 years. She was working and paying her part of rent, going to school to get a higher certification; the older son had a job, and the two kids, aged 14 and 13 at the time, were doing well in school. They had a very good voucher that paid off the cost of the house in a little over a year. Tenant had friends, was going to church, caring for her aging mom, whom I saw one time at the house. On the whole, it was a functional family. 

But everything changed last year when she got really sick. She stopped paying her part of rent, but didn't call me or the Section 8 caseworker to explain that she wasn't able to work. Her checks just stopped coming. She wasn't returning my calls. So I went to the house. It was full of people I didn't know, including the daughter (home on a school day), the older son playing Grand Auto Theft for hours (had lost his job). And the tenant meanwhile was upstairs in bed, seriously ill. Chaos in there. I notified the Sec. 8 case worker, who sent out an evaluator, and determined the voucher payment needed to cover entire rent. 

We have maintained a reasonable rental relationship, with her calling when she needs repairs. I send someone over and it gets done. Haven't had any reason to suspect anything amiss.

Fast forward to August 2018, I get a notice from voucher office that in October the tenant would start paying a portion of rent again. Good news, seemed like. Except I couldn't get her on the phone. Also got notice of the annual inspection and was able to reach her to ensure someone would be there to let the inspector in this past Monday, which was a holiday for me. The inspector cited a slip hazard on the back porch, which was a 24-hour emergency fix. So that's why I was out there yesterday with a contractor. 

I'm a landlord, not a family therapist. How am I supposed to track when a kid gets involved in gang activity? What business is it of mine? I mean, it's in my interest to have a stable family in there because stable families pay rent. But it's really their business to track their own kids. Not mine.

So suddenly we went from having a reasonably healthy and functioning family to a deeply destabilized family and the status quo is no longer sustainable. Everyone who said, make plans to change that unit, is 100% right, and I thank you for that. 

But I don't think I'm obligated to offer help. If she comes to me to ask for help, that's another thing. But she hasn't, and technically, if I hadn't seen the limo I wouldn't even have put two and two together and figured out what happened. If anything it seems like she was trying to keep me from finding out. 

I learned today that an 18-year-old man who was killed in a shooting in Baltimore on August 25 is the son of a Section 8 tenant of mine. 

At the time of the shooting none of the news accounts mentioned the victim’s name and I had no idea I had any connection to him. The tenant, who is almost completely uncommunicative except when something needs to be repaired, has not informed me. I'm not judging, just stating the fact, and noting it's not out of character for her. 

This morning I’d gone over to the property to meet a contractor to follow up on some repairs cited in a recent Sec. 8 inspection. A limo was parked on the block, but it was not in front of my property, and it pulled away immediately after I parked. A large vehicle, like a van, with a "funeral" sign in its windshield, followed close behind it. I didn’t see who was inside either vehicle and had the impression it was for a neighboring family.

The repairs were on the exterior of the house and we didn’t go inside. 

Later I saw in the Baltimore Sun online a news story about a funeral, and I recalled that limo.

So: why would the Baltimore Sun report on a funeral, you ask. Well, because as the mourners gathered at the burial spot, another shooting broke out in the cemetery, leaving one more man dead and another in critical condition. There’s a video of the mourners fleeing the area, scattering among the tombstones. 

It was the news story about these events today that provided the name of the August 25 shooting victim who was being laid to rest. I checked the lease, and there is the young man's name, with his birthdate in January 2000.

Horrible, yes. But hold on, there's more. I just learned this evening, via an Instagram sent by a colleague, that the person who was killed today at the young man's funeral, is the older brother. My tenant's other son, age 32. He's got a 7-year-old son.

I've never had anything like this in six years of landlording, so I'm looking for help here. How do I respond to a disaster of this magnitude? Can I continue the repairs at the house in the midst of this crisis? Do I inform her case worker? What is my role here? Leave them alone? Call? Send a card? None of the things I'd normally do for friends and family make sense. Has anyone had an experience like this? 

Add to this the uniquely corrupt bureaucratic environment of Baltimore City, Maryland (where I grew up)--and its creaky, barely functioning housing-voucher machinery. Would they force her to move into a smaller house? It's not a crazy question. I'm afraid for her and for the impact on, y'know, me.

Appreciate your thoughts.

Nancy Roth

@Seth Parmelee @Wayne Brooks You are rrrrrright! My first tax lien investment. It has been really a long roller coaster ride. Not sure I'll do it again. I didn't even get into all the drama I went through with the predatory DC government with this property. 

@Ned Carey I thought I had told you! This has been brewing since March 2016, how could I not have mentioned it? 

@Jeffrey H. This thread got a little long, but somewhere up there I mentioned that the seller had not received any escrow funds. Your answer to question B is exactly what my lawyer told me, in essence, you may be right, but don't do it, it's not worth it. Avoid court. 

Having had this informative consultation (thank you all very much)  I've told the attorney I'm reluctantly going to close with this weasel. But he has to pay the fine for the door. And, this is trivial, but I want a remote closing because I'm afraid I'll lose it if I meet face-to-face with the incompetent title company, whose decision not to insure cost me thousands of dollars and added not one ounce of protection to the buyer. My colleagues will be warned, in person, one-on-one (NOT social media).

Next sale , if there is one, will be conditional on settlement with title company of my choosing.  (@Tom Gimer are you listening?)