All Forum Posts by: Shera Gregory

I am an investor who has purchased several properties off the MLS through my real estate agent. I am now looking at some deals offered by a couple of wholesellers in our area. Since my agent will help to sell the property she is willing to get me comps and I am working with a contractor who can do the inspection with me for rehab costs. So I feel pretty confident about sorting out a real "deal" from a not-so-good deal. And I have a real estate lawyer who can do the closing.

My question is really about the process from the buyer side. So far what I've found on BP about the wholeselling process is from the sellers side and ends with getting the assignment contract signed. As a buyer is that it for me too? Another way to ask this is .. do I need to put together a purchase contract? If so, with whom? With an "as is" sale on the MLS to signal my strong interest I would submit an offer with an information only inspection clause. Is there an equivalent for buying from a wholeseller?

Thanks everyone!

Shera

There is good information at taxlieninvestingpro.com. This is a free site with quite a bit of "no bs" tips and experience. His recent posts indicate that the online tax lien sales have become so competitive that they are no longer a very good option for individual investors.

Another site that I have used is taxlienlady.com She has a paid subscription that gives you access to more info and monthly webinars. What I like about her site and information is that she is actually doing this, not just teaching it or recycling info from prior years before the online sales changed.

Good luck!

Shera

Also, I should have mentioned that a big factor in our decision was the underlying lathe & plaster walls. It can be difficult to get a smooth look to the wall if you have to fix the plaster (for example if you get chunks falling out from the lathe which can happen when you try to strip off the wallpaper). If you are just working with drywall and newer wallpaper then the $$ to get some guys to remove it is probably worthwhile.

I have not dealt with this on a flip property but I do have to speak up in defense of painting over wallpaper in some situations. It depends on the age of the property and the way in which the original wallpaper was stuck to the walls. My personal property was built in 1924 and had wallpaper on every surface including the ceilings. The ceiling paper came off in nice big sheets by just wetting it down. The paper on the walls however was put on with something much, much stronger and the paper itself was quite thick. Given this situation we decided to have the "mud guy" do a light coat of joint compound and cover the paper joins just like a drywall seam. Then that was primed with oil based primer. Then two good coats of nice flat Ben Moore deep color paint. Very lovely ten years later!

As someone who has been in the market for a good long term rental I can say that low-maintenance is a VERY big plus. For curb appeal and differentiation from the rest also consider a great front door. When all the brick houses look alike the front door is a big opportunity (IMHO).

@Bryan Thomas welcome!! I have been investing in real estate in Richmond for about 15 years now. That sounds more impressive than it is! Mostly just adding a SFH here and there .. up to six now. I highly recommend the Richmond RING and Richmnd REIA groups which you can find on meetup.com. Hope to see you there and/or on BP!!

Shera

I realize your posts were from a while back but I was looking for anything about PIP West. They do two things with the IL tax liens and market those as separate investment opportunities. The first is what you mentioned .. they collect money in advance, attend all the auctions and buy on behalf of their clients. I know it's not just vacant land because of the second part that I'll get to in a sec. They say they target a bid rate of 24 to 36% rate on the liens in the first year. Since IL has a three year redemption period their idea is to look at the full three year time period. They say that on average slightly less than 1/3 of the liens redeem each year. After you get past the first six months you are getting the 18% rate per six months. Their fees are now 8% up front and 3% after each six month period. So the first six months is really just to get things going and whatever does happen to redeem in that early time frame is close to a wash. But after that you are getting the 36% per year rate minus their 6% annual fees. It's $25,000 minimum for this.

When investors get close to the 3 year mark lots of them don't want to foreclose -- they were just in it for the return -- so they want to assign to someone else. This leads to the second part of what they offer which is a secondary market for tax liens that are at the 2 1/2 year mark. I did buy some of these earlier this year. You get a list to pick from with the addresses, unpaid back tax amount, etc. The cost is 12% of the lien (basically paying off the former investor) plus the lien amount plus about $2500 for the foreclosure (of which you pay $1250 at the beginning and the other $1250 after the start of the foreclosure). If it redeems then you get the 18% for that final six month period and you get back the non-postable fees. If it doesn't redeem then PIP West will do the foreclosure and you can wholesale, keep for rental, etc. They will handle the foreclosure and sale or property management as a rental. They do get 30% of the profits if you sell after foreclosing. They say that about 25% or so will foreclose. So as long as you choose liens with a high enough lien amount for the penalty to cover the other costs you are OK. The minimum for this is $5,000.

The list of liens that I selected from had many single family homes, some vacant land and some commerical property. Almost all of them had comments from the local people they hire to go take a look at the property. What I did was to buy five liens knowing that maybe only one would actually foreclose. If none, then I won't have lost anything except the opportunity cost of what else I could have been doing with the money (which up until now was losing money trading options). So I decided to find a less stressful way to at least break even and maybe clear a good bit of $ on the foreclosure.

Shera

I did a search for members in my area and found a total of 13. I wanted to send a colleague request to those folks. I was able to send two (or maybe three) but on the next attempt I was blocked for spamming. I understand, and appreciate!, the effort to keep the site free of spam. So my question is .. how do I network with people in my area if I can't send several individual colleague requests? Or do I just wait and do another batch of two or three over the next couple of days?

Michael Spindler Looks good! Keep us "posted" .. pun intended.

Hi Michael,
One thing that I learned from biggerpockets is that you always learn something from starting to engage with a real deal even if it doesn't wind up being something you buy. So this is a good step forward because it makes the whole process much more in the realm of reality vs theory. Just remember that you don't HAVE to buy anything if it's not right and/or you aren't ready.

I don't have much experience dealing with craigslist postings for property but it seems to me that you would want to get into an actual discussion fairly soon vs e-mail negotiations. So I would keep it very simple. Something like "My goal is to buy a property of this type. Can we discuss alternatives to a cash down payment?"