All Forum Posts by: Shera Gregory

Hi @Jeffrey Goldman -- there are two really good meetup groups in the Richmond area. You may have come across these already, but check out REIA and RING. There are active wholesellers who attend and help to run both meetings. I am not a wholeseller but I have been part of many positive and supportive conversations between folks in all parts of the "supply chain" at these events. Best of luck to you!!

I mentioned in a separate post over a year ago that I had bought some tax liens through PIP East and was hopeful on the prospect of obtaining a property that way. My experience was an example of "be careful what you wish for". But I wanted to do a new post about working with this company. Bottom line was that they did provide the services they claimed they would do related to obtaining tax liens and, if not redeemed, going through the foreclosure process to obtain the deed. The entire process took longer than I expected. It took about 15 months from initial purchase to obtaining the deeds on two of the five liens I purchased. I also expected more help with selling the properties once I got the deeds. That's part of what they said they would do, but isn't the main focus of their business. I am most familiar with their work with liens in Illinois since that is what I purchased.

I am not sure of the current business model for PIP but at the time I started working with them in mid-2013 they had two sets of customers for the tax lien deals they put together. The first group were people who wanted to buy a lien and collect the proceeds from penalties and interest for the first 24 to 30 months (less the fees that PIP charges for obtaining the liens). The second group are people who want to buy those liens at about the 24 to 30 month mark in hopes of being able to foreclose once the property goes past the 36 month limit without being redeemed. I was part of the second group.

PIP provided a long list of properties that were ready to switch hands from group 1 to group 2. It was up to me to review all the properties and select what I wanted to purchase. They did provide photos and a few sentences about the condition of the property. There are entire books and courses devoted to doing due diligence on buying a tax lien for possible foreclosure. My own efforts were pretty much limited to google street view and some basic info on the local county or city property records. Because of the fees charged by PIP and the fact that group 2 is buying out group 1 you have to be sure that the remaining penalties will at least cover the cost of the lien. This favors higher priced liens to make the numbers work.

I wound up buying five liens on properties in Illinois. Three of these redeemed at 1, 3 and 6 months after purchase with returns of 24, 0 and -9%. In total those three returned 6%. Not bad considering the main plan was to at least break even on any that redeemed.

Two of the properties moved forward to foreclosure. What I didn't realize when I started down this path was that there would be at least one to two more years worth of taxes still to pay before all was said and done. For one property I had to come up with another $16k to pay the additional back taxes and foreclosure fees. That would have been the right time for me to bail, but since I had $8k into it already and the house (I thought) was worth about $100k I pushed ahead. I figured even if I sold at 50% I would still double my money. My main contact at PIP was looking at it the same way. So I was hearing what I wanted to hear. I don't think they were being dishonest. I think they just didn't have the full detail on every area or neighborhood given the volume of business they do. This is where some new google street view photos of not just this home but the surrounding area would have shown me the number of boarded up homes in the area and a bit more research would have shown the foreclosures being sold at $10k or so. The folks at PIP had a couple of potential outlets including selling to their investors and selling bundles of homes to larger firms. Every month or so I spoke with my contact there to find out if any leads were popping up that might be willing to pay enough to at least cover what I had in this deal. I had other projects going on closer to home so I let this ride for quite a while (i.e. almost a year) before I realized that I was going to have to take action myself to unload the property. Eventually I contacted local real estate agents who confirmed the $7 to $10k price points in the area. One of them sent the deal out to her investors but no bites. To not drag this out too far .. bottom line is that I sold this via a craigslist ad for $8000. By that point I felt fortunate to find anyone who wanted this property. So I lost about $18k on that deal.

On the other foreclosure things turned out a bit better but I still wound up doing more to coordinate the sale than I had expected. One thing I didn't realize about this home is that it was in a town of only about 4000 people. I took action a bit sooner on this one, also listing on craigslist. Amazingly there was someone trying to find out what was going on with that particular house who googled the address and found my ad. I wound up selling to her with owner financing (after reading up quite a bit on the Dodd-Frank implications of that). In order to make that happen I had to arrange to replace the furnace and all the plumbing. Fortunately I was able to connect with a good contractor who could take care of things at a reasonable cost. For both of these deals I had to find a lawyer in Illinois to work with on the contracts and, for this home, the financing agreement. On this deal I had a total of about $21k into it and sold it for $28k with seller financing at 8%. In a few years I plan to sell the note so the final tally won't be known til then. Between the two houses I'll lose some money but not enough to make a huge dent in my overall investing plan.

Would I do this again? Probably not, but mainly because I would prefer to focus on deals in my local area that I can go see. As you can tell from my post, most of what I wrote had to do with my own decisions and actions and not as much about what PIP did or didn't do. If you are interested in working with them just make sure you are clear about their fees, try to estimate the total cost from start to finish and plan on the whole process taking a year or so. Compare that to whatever else you could be doing with your money and do your due diligence.

The website is acebusinessfunding.com. That's from the link on the flipnerd website. I also listened to that podcast and would be interested in any experiences with this company.

You can make the agreement specific to certain price ranges, property types, MLS-only. etc. At one point I was working with two agents. One agreement was set up for properties on the MLS under $40,000 and any that were on the hudhomestore site (any price). Then with the other agent it was non-HUD homes or anything on MLS over $40k. What I would suggest is that you ask the agent up front what would happen if you found a house through a wholeseller that you wanted to buy. I was starting to work with an agent a while back who didn't want to have anything to do with me after he found out I was also working with a wholeseller. But another agent in the same office was fine with that and actually wound up listing a flip that we bought from a wholeseller.

As an owner occupant you can get first dibs on homes on the hudhomestore.com and homepath.com/state/va. Those ususally show up on the MLS but they don't always spell that out in the comments. And I have seen at least one house show up on homepath that wasn't on the MLS for several days. There will be a period of at least two weeks where only owner occupants can make an offer. You will need to work with a real estate agent to put in those offers. @Jon Deavers is a good contact for that.

Good luck!

I also like the idea of setting the rent at one rate (ie $900) and then have a discount if the rent is paid on-time or early (ie $50 discount for net rent of $850). This avoids the language about late fees entirely and the full $900 is in your lease as "rent" if you have to pursue an eviction. As always, check local laws to see if this is OK in your area.

Hi Morgan -- there are students who will go as far away as the property you are looking at, but that area is not considered "near VCU". It would require driving to the main campus area and parking there is pretty dreadful. Another thing though that would be even more of a concern to me is that the property is only about 1800 sq ft and is divided into four one bedroom apartments. So those individual units are going to be quite small. You would only be able to market to people who want their own small private space. That may not be the "hang out on the porch with your neighbors" crowd that you envision attracting. Finally, it doesn't look like anyone has lived there for several years. The current owners bought it in 2012, live in Texas, and obviously haven't been able to make a go of it.

Hope to see you at one of the meetings soon. Another site with similar restricted periods for owner-occupants is www.homepath.com. That's the Fannie Mae site. If you work with someone like @Jon Deavers they can give you tips on the values in various parts of Richmond. As with most medium size cities it's a diverse market. And you can also get some insights from folks at the REIA/RING meetings.

Welcome! Since you are looking at buying a home in the Richmond area you have opportunity as an owner-occupant that the investors don't have. The homes on hudhomestore.com are also on the MLS, but for the first couple of weeks that homes are listed for sale by HUD they are only available to people who will live in them. I've seen some really nice deals come through that are HUD homes. Best of luck! If you are in the area on Thursday evenings check out the meetup site for the real estate related meetup groups such as REIA and RING. Both happen to meet on a Thursday night each month.

We use the intuit payment network. The fee is $0.50 per deposit. I use that to collect the application fee so the tenant is already set up there when they need to start paying rent. They have to set up their payments so it is a push method but I can send a request for payment from within IPN too. They can set up for recurring or do this monthly. Another one I use is erentpayment.com. The fee is $3 per month but they will accept debit cards which is great if your tenant doesn't have a checking account but does get their paycheck on a debit card.