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All Forum Posts by: Joe Donohue

Joe Donohue has started 5 posts and replied 45 times.

Post: Tax lien states - how do you bid?

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

Here's how it works in Indiana.

Indiana is a tax lien state, Big-up auction style, One year redemption period.  The main tax sale auctions are in the fall August-October.  Bidding starts at the property tax amount owed plus auction fee and various standard penalties.  The minimum bid earns 10% flat penalty return, which changes to 15% if redeems after six month mark.  The overbid amount (the amount bid over minimum) earns 5% interest per annum.  In the past bidding would generally go to 50-70% of market value of property, until lately its gone closer to full market value.  If the property redeems you get your money plus the interest from the county, you just turn in your certificate.  If the property does not redeem in one year you can petition for tax deed with the county.  Buyers should be aware, and add into your math for return, there are certain legal notices ($500-1000) that must be sent out during the redemption period and you will only be reimbursed that amount if there is a redemption.  

Besides the main tax lien sales in the fall, there is a secondary certificate sale called a Commissioners sale usually in the Spring.  This is for all items not sold in the main sale, and usually I just see a lot of junk going for crazy prices.  The commissioners sale has a three month redemption period and similar process as the main sale, the idea being those finish up around the same redemption expiration as liens in the main sale (in the fall).  There is also a tax deed sale in some counties, this is a direct ownership sale and usually is the bottom of the barrel properties imo.

There is still opportunity at these auctions but the lists themselves are diminishing in size each year and the bidding has become ridiculous.  Just because you are at an auction does not mean you are getting a deal (typically you are getting a problem to remedy).  

Anything related to Indiana tax sales feel free to ask as I have been attending tax lien sales in Indiana since 2007.

Best,
Joe D

Post: 60.6 tons of trash/debris taken off of a tax sale property!

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

Wow,
I have had similar experiences in the past.  There is always a good chance tax sale properties are owned by hoarders.  

Just recently had a squatter family leave one of my tax deed properties.  Last year they moved into the vacant home, turned on the utilities, and then never paid a bill.  The water company turned the water off for two weeks in March, but with Covid the governor ordered all utilities to stay on.  They had been living there with free utilities until a few weeks ago!

During this time I received dozens of city ordinance complaints as they trashed the yard and house.  I did report to the electric company that the electric panel was wide open and unsafe.  I think that forced them to shut the power off.  They moved out soon after.  The heat or no TV got to them!

Upon entering the home there was an EXTREME INFESTATION of roaches and fleas!  They had been using duck tape to seal cracks and holes where bugs were coming out of the walls and floor.  Apparently they were living with the bugs for a long time.  They also had only a washer.  The dryer had not been used in years.  Neighbors told me how poorly their kids lived - wearing the same clothes for weeks.  

I also have a lien on a property where the owner lived WITHOUT WATER for two years before moving out!  One room is completely full of Depend Diapers - to the ceiling!  Another room is completely full to the ceiling with empty water bottles!  Luckily it has been a few years since the owner moved and the house doesn't smell as bad as you would imagine it would.  Should be an interesting clean out!

Pointers...
Fact is you never know what you will find in these properties.  Equip your crew with gloves, masks, bug spray, etc.  Tell your crew to be mindful of drug needles and sharp objects.  Typically we start with outside and work our way in.  Depending on your dumpster company, you may be able to pre-purchase 10-20 dumpsters for the year to get a lower rate.  Also, we almost always order a 40yarder.  If you have the option for drop off & tonnage vs flat rate, the size of dumpster matters less, so get the biggest possible.  If you opt for tonnage rate, and the dumpster is exposed, try to call for pick up before it rains or after a few days of sun as water will weigh it down.   If you can combine cleanout and demo in the same operation, do it. 

The cleanout phase is certainly not the most appealing part of Real Estate, but it is important.  Cleaning out a property adds value to the property.  It also give you a better look at the utilities and structure of the house.  Typically you will score points with all the neighbors for attacking the eyesore in their community - use this time to introduce yourself.  Cleaning out the property also lessens the chance a previous owner returns to rummage through the property.  I think sometimes the cleanout phase is taken for granted (because some think its easy), but if you have a trained crew and efficient system in place before you arrive at the property, you will save time and money.   

Joe D


 


Post: Indiana SFH Rental Insurance

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

We use American Modern for most of our rentals.  PM for contact.

Post: Investing in New Castle indiana

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

Quiet slow town.  We have a rental there and have had properties there in the past.  City can be hard to work with at times.  Rents are very low along with values.  Southwestern side has some decent neighborhoods.  If you don't know the neighborhoods they go from good to bad quickly.  We have property all over that area of Indiana and New Castle is not a favorite.

Post: Fair Property Management Company in Indy

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

Hello,
Our company has several properties throughout Indiana.  Some are self-managed, others we use management companies.  I am shopping for a fair Indianapolis property management company that does not survive on random fees charged each month.

For example, 8 months into a lease with a property management company, I have only had one month where no Misc/Repair/Fees were charged.  One month out of Eight where we received the planned Net.  
This company holds a small balance out of rent for repairs or "preventative maintenance" (quarterly cleanings and inspections).  

I am trying to find a company that either include small repairs as part of the management fee. For example we pay 10% of gross rent management fees, but about another 30% in random repairs and preventative maintenance.

I would much rather pay 20% of gross rents to the company and they absorb any small repairs!

 Our other properties we plan for 10% management fee and about 10% in repairs to get our Net cashflow each month.  Our Net Net would be Net cashflow minus taxes, insurance and CapX.  

Are there any companies in Indianapolis that do not fee you to death ?

Thank you for any recommendations.

Joe D

Post: BRRRR with Tax Liens

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

Most lenders will want a quieted title. I have not done BRRRR on any of my tax deeds, but last time I looked into it they wanted either a quiet title done or some kind of title insurance. In general the more valuable the property the more you should do a quiet title.

Post: Which is better for cash flow B class properties ? Az, Indy, Ohio

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

For Indy:  We like the I-69 corridor going up from Indianapolis to Anderson.  We also like South and East Indianapolis outside of the 465 loop, although I hear a lot of growth is going in northwest, up 65 near Zionsville.

For OH- Cincinnati.    Stay just inside our outside of 275 loop.  If you can do KY, Florence is great area.  North of Cincinnati also great.

Post: Lake Co IN Tax Sale News Article

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34

A recent article on the results of the Lake Co Indiana Tax Sale

https://www.nwitimes.com/news/lake-county-rakes-in-million-in-tax-sale/article_2b4e9263-66f7-58bc-b0aa-eb3e0e8b888f.html


“I believe it’s so much higher this year because people were buying more properties and bidding the price up higher," she said. "It means Lake County is a good investment.”

This statement is a total joke.  Just because properties are bid up higher does NOT mean its a good investment.  We are seeing these kind of statements all over the country.  Another example of the bubble we are in!

IMO Lake County is a dangerous place to invest - for many reasons.  Working with the county is extremely difficult! 

Never trust an online tax sale! 

Joe

Post: Indiana Tax Sale Season

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34
Originally posted by @Daniel Guerra:

@Joe Donohue

I'll definitely be attending a few. I was looking at the Lake County tax lien sale but the final bid prices were ridiculous. Obviously, online isn't the way to go for better prices because it's available worldwide.

I haven't decided on a strategy yet. There's plenty of small populated counties but I'm leaning towards avoiding them. I might travel down to Marion County or head out east towards Allen County. I'll definitely be going to Porter County. I currently live in Orland Park, Illinois (20 minutes to the Lake County Indiana border).

Do you actually attend these smaller county sales (population 100K or less)?

What can I do for you?

Thanks!

 Yes I attend small sales and large sales (Marion Co).  

Recent article on Lake County



https://www.nwitimes.com/news/lake-county-rakes-in-million-in-tax-sale/article_2b4e9263-66f7-58bc-b0aa-eb3e0e8b888f.html



IMO Lake County is a JOKE!


Post: Indiana Tax Sale Season

Joe DonohuePosted
  • Property Manager
  • Indianapolis
  • Posts 46
  • Votes 34
Originally posted by @Matt Skog:

@Joe Donohue,

Do you get involved with Michigan at all? We're at almost 3 months out since they held theirs.

Are any counties there doing over-the-counter sales?

Nothing in Michigan although I often receive and review REO lists in the State.
There are secondary commissioners sales and properties that can be directly purchased from Land Bank (in larger counties)