All Forum Posts by: Roy Oliphant

If property that has been held with the Ag exemption is sold for development or non-ag use, Texas allows reclaiming the lost tax dollars at the sale.  This strategy MAY help the cash flow during holding but probably wont do much on a 5 year flip for the overall return.  Also, there is always a risk that the taxing entities will reject the ag designation, especially in a the multi-use scenario you describe (say if the rental income from the MH was higher than the horse boarding).  As this may happen at anytime, it could damage your ability to hold the property if you don't have the full tax amount available in your cash flow.  This is especially dangerous when you are holding property in the growth pattern as the entities really want to get at those tax revenues and the difference in valuations can be very substantial. 

It is an interesting idea but there are risks in the execution.

@Darryl Taylor

Congrats on a super 1st property!  Learn from the crowd but remember if you are following the crowd you are probably just eating dust.  Sounds like you have a strategy that works for you.  Review it regularly but change it infrequently.

Goals -> Strategy -> Plan -> Action -> Goals 

@Christina Jones

Welcome!  The Sherman area should be a great place to invest.  It should be a Dallas suburb in a short time.  And there are certainly a lot of fixer properties in the area.

How far away are you looking for opportunities?  Would Bonham be too far? 

@Johnny Khoury

As the saying goes, Texas is like a whole 'nuther country.  Austin is a very different market from El Paso and, even though they are in the same metro area, Dallas is very different from Fort Worth.  Market dynamics are different in each part of the state and it depends on your investing strategy as to which area is 'best'

Roadmap to Success:

Goals -> Strategy -> Plan -> Action -> Goals

@Michelle Oliveira

I will attempt to answer your questions in order:

1) Researching Tax Deed properties is much like researching any property; You need to do lien searches on the property and owner.  This is a career in itself and there are many folks much better to answer specifics.  If you are new to this, I suggest you find a good title insurance company and establish a relationship with them (you will need their services nearly every time you trade real estate).  They can do all the searches and prepare a document listing the defects to title.  Once you have been through this process enough to understand where these defects originate, and how to locate them, you might consider doing some of the research yourself.

2) It is like a second mortgagee foreclosing on a property that has a first mortgage on it.; a lower priority lien holder will foreclose when they believe that is the best option to protect their investment.  Taxing entities are legally required to attempt to collect the taxes.  The only method they have to enforce that is the tax sale process.  Very few liens have priority over the tax sale and none of them (in Texas, at least) can attach the proceeds of the sale up to the amount of taxes owed.  The purchaser of the property should still be concerned about these liens as those that survive the tax sale process may still make claims against the property.  BTW... the list of surviving liens (again in Texas) is quite small. 

3) This might be a great outcome for the investor!  If a creditor wants 'to keep the property' after the tax sale, they must Redeem it.  In Texas this means they must pay the purchaser the amount paid at the tax sale plus %25, plus some costs.  Our experience is a mortgage holder does this fairly soon after the tax sale as they do not want their right to redeem challenged.  This can lead to some great returns but it doesn't happen very often.

Hope this helps. 

@Valerie Watts

This sounds like a banking deal rather than a mortgage.  Check out some of the small builders in your area and ask them for banking recommendations.  Who knows, they may also be interested in participating or buying a lot once you have the development done.

Good luck and good hunting!

@Daniel B.

There are very few deals in this type of investing IF you are looking for immediate cash flow; other property types may be more attractive.  What types of properties are you interested in?  I have reviewed a good number of these and would be happy to discuss. 

It is very difficult to get title insurance in Texas for at least two years after the sale date (end of contestability period).  We have had some success when we can locate the owner but a lot of properties are listed in the name of a deceased person. 

Still, we have had almost nothing contested and no issues for our investors.

Good luck and good hunting!

@Marilyn Bayless

Welcome.  Texas law requires the tax sales to be held the first Tuesday of the month and that properties are advertised for sale at least 21 days before the auction.  Some properties take months to bring to the sale after judgment because the county must notify the owner of the sale.  Some counties make an extra effort to make that notice happen and it may take several tries before the reach an owner or decide the owner can not be reached.  It is important they get this right as owners have 2 years (regardless of the redemption period) to contest the validity of the sale.

Wichita county seems to be a good place to invest, especially since the drought has finally broken  There was real concern the area might run out of water. 

Let me know if I can help in any way.

@Nhrai Jordan

Congratulations!  Not sure I see where you bought but we think Texas Tax Deed properties are a great opportunity especially since you get the right to rent immediately!  We buy them all over Texas, rehab, rent and sell to investors.

Let me know if you have any specific questions about the Texas process.