All Forum Posts by: Terry Kavouras

Congrats!  Very inspiring.  One question: on the Albany Park 2 Unit, how was the down payment only $13,000?

Let me preface this by saying that I'm a small time investor with just six SFRs in the suburban Cleveland area.  I've only been at this a five years so I'm not the most experienced investor.  In fact, I just found this site a month ago, and until then I haven't had much exposure to other investors.  All this is my way of saying that I'm a noob and I don't know what sort of sophisticated investment strategies might be out there, or what other investors expect from their investments.  

But here's my inexperienced two cents anyway: I'm with the others who think that a $166 monthly profit is not worth the effort, energy or risk. Also, that a 10% CoC ROI is not good. Even if it is, so called, TK. So many things can go wrong and that modest cash flow will be gone in a minute. It's not like you're buying savings bonds here, things can and will go wrong. I think you need a great deal more cash flow and and higher CoC return to invest that kind of money.

Maybe it's just the suburban Cleveland market, but I've been able to average 26% CoC and $520 per house (If I take out one under-performing property that I rented to my nephew on the cheap, I'm averaging almost 27.6%). I don't know what other markets produce or what other investors are getting, but I'm trying my best to find places that will return a 25% or more and generate at least $500. It takes a while, but I've managed to find them without too much effort here. I've settled for a little less, but that's what I'm trying for.

So take this with a large grain of salt because I might not be a typical investor.  I might have been lucky and living in a optimal market.  In any case, good luck.

One last thing, I had a good experience talking to and working with the Summit County Fiscal Office.  I found them to be pretty helpful during the process.  So don't be afraid to reach out to them too.

I'm not certain anymore, but I seem to remember something about the lien holder getting deed to the property if they aren't paid within x period of time (a year I think).  Make sure you check into that too.

I bought a house in Akron with $7500 in back taxes.  The tax debt had just been sold by the county to a third party.  I spoke with the 3rd party tax lien holder to make sure that I knew what it would take to settle the debt and if there are any complications.  It was pretty straight forward. After I bought the property and title transferred, I contact the tax lien holder and paid the $7500.  They charge a finance charge of about 4% which added a little onto the settlement price.  But once paid, they released the lien.  So as long as you calculate the the $20K, plus financing charge, into the price of the property, there shouldn't be any problems.  One thing I'm sure you realize is that you will still have to pay the current county property taxes in addition to paying the $20K back taxes.  

As far as the deal goes, if I understand this right, you will be paying $25K for the property plus $20K for the back taxes. The total is only $45K all in. And the property is generating $2K/month. I don't know your costs, but I'd guess your monthly costs are about $600/mo. So I guess your net is about $1400 per month, or $12.8K annually. That's a pretty outstanding return on your $45K investment. That's a 28.4% CoC return. I'd buy that. Better yet, I'd pay him the $25K as he asked and assume the tax debt. Then my monthly costs go up to about $900 (the base $600 plus the $280 for the tax debt). I'd net $13.2K annually on $25K out of pocket. That's a 52.8% CoC return. Pretty awesome if you ask me.