JWmwilson,,,, No secret how to buy properties for 2k or less in the US..Virtually any Ghetto area of the mid west upper mid west and some east coast cities will have plently of homes priced like this. There is an area south and east of Chicago in Indiana were there are virtually hundreds of homes that go for next to nothing at Property tax sales. However in my humble opinion buying any of these homes as an arm chair investors is a waste of time and money.. The properties will never perform.. the only possible way to make a profit is to buy them and then flip them to the next newbie or next sucker.
Have a look at this Toddg before you consider Detroit. It is all too easy to get taken in by slick advertising and promises of high rents…the truth is rather different.
If anyone is looking to invest in the US, I would suggest purchasing property in San Diego. You can make a good profit from vacation rentals, corporate housing, and monthly rentals.
The above video link isn't working anymore but you'd have to have more money than brains to buy anything in Detroit…..now if they discover oil there…..you might have something then. Outside of that developing, you'd be pouring money down a rathole. It doesn't matter where you are investing anywhere in the world, if you aren't in your local market, only invest in markets that have lots of government jobs, universities, hospitals, transportation networks and decent infrastructure…certainly not in a bankrupt city! The west coast of the US has some good opportunities, parts of FL and Atlanta. There are others…I actually think there are good opportunities everywhere, you just have to be in the know and the now to get them!
Have a few questions about buying us properties
1) When buying a house with existing liens on does the owner allow to sell the house in full market value or the liens must be settle?
2) How to verify whether the existing loan on the house is allow to take over?
typically liens encumberance's mortgages etc are the reponsability of the seller to pay at settlement as you allude to. It would come out of the sellers proceeds.
To see if a loan is assumable or has an alienation clause ( due on Sale) you would have attorney or title co. pull the existing mortgage or trust deed from public records and reivew the language. Most institutional type Mortgages or Trust Deeds will have an Alienation Clause.. And many private mortages or Trust Deeds as well.
However there is nothing keeping you from buying a property SUBJECT TOO any of the above and its your closing attorney or Escrow company that should be advising you if these exisit.. If you are getting title insurance and 90% of the buyers do.. You will get what is called a Title Commitment or Preliminary title report, depending on where you are in the country different areas use different terminology. this report is prepared by the Title Insurance provider and will list all liens encumbrance's Mortgages Deeds of Trust back tax's excetra.. You simply read this document and ask for any all of it to be paid at settlement. Pretty basic stuff as long as your dealing with reputable people.
Now there is the model of buying property by simply changing ownership in an LLC.. which does not afford you the same protections. ONe should then order their own title policy and make sure title is in a condition that you approve before you take ownership of property via a sale of an LLC interest.
JLH
JLH thanks for the reply. Would not be too night when the escrow company or title insurance company provide the buyer the information about liens existing loan and other debt when the house has been purchased? For buyers who are interested in us properties arn't they going to order title search service from title insurance company EACH time they interested in a particular house? And if the search came with substantial amounts of owed amount buyer may have to discard the purchase and prior any purchase the search service cost would make your pocket hole. Would you elaborate abt llc and title policy? llc does not seems to protect buyer from these liens and debt or is wrong? Even buyer is protected it also does not give the house a full title when selling in the retail market in full market price
what happens in the US market is that if your buying from reputable people they will basically know the condition of the title prior to marketing and then you order the title work to check liens etc. you do not do that up front. AS all contracts in the US are subject to seller providing whats called marketable title.. Its the buyers option to kill the deal. the only cost you would be out would be the cost of the preliminary title report 200 bucks or so.
NO LLC does not protect buyer from Liens or encumberances.. Its simply a vesting method.. Like buying in your personal name.. a coperate name.. and LLC name. the only protection an LLC gives is for liablity from someone sueing because there is something wrong with the property. Or for privacy issues. or to cirumvent the title seasoning rules.
Is searching public record would be sufficient to prevent existing debt issues associate with the property? would those mechanic leins irs leins or any other liens turn out in the public record? There are some buyer buying bank owned or gov property. Would they alienate those liens and warrant a "sure" reselling title?
yes public record will disclose liens mortgages tax's etc.. however a title search by a title co. or title abstractor is the only 100% way that you can be sure your buying a property with clear and marketable title.
In addition each state has different level of information accessable by public record search's. Especailly what you can get on line… On line searchs by and large will not be adequate to protect one against unknown liens IRS etc etc… Just for instance in Oregon Seniors over 65 can defer their annual property tax's until thier death or the sale of their home it has to be their personal residence. And the only way you will know if there are deferred tax's is to call a special department at the county tax collector and get the info its not avalaible on line. I learned the hard way on this one I bought a court house step foreclosure only to find out about 10k of senior defferal… We still did fine on the property but it was a surprise
Does buyer has to qualify llc form in another state to buy RE in florida? Qualification rules include like the llc has a warehouse in florida and ship product from the warehouse to customer. But buying RE with llc does not have a selling or present presence in florida.
If require for qualification arn't owner has to pay double cost in term of filing cost, agent and other fees to maintain biz in florida?
Does llc has to apply for license for buying RE?
Huh?
when buyer successful brought a tax deed with many potential liens and loan on do they have to buy title insurance and would title company insure them?
would creditor going to collect money owe from the new owner or they would collect money only when u want to sell the house?
Hey how did you go? Did you end up proceeding with the investment. I am contemplating the same. But reading through the comments on this forum I am starting to think otherwise. Interested to know how you went. I have been recommended a company called Investinus Group. I am looking for feedback on these guys as well.
I have heard some bad stories on Detroit so I would be careful investing there.
Looking forward to learning more about US property investing.
there are two types of tax sales… You have tax certificate sale and Tax sales.. a Tax Sale is just like a property auction properties are sold fee simple at the tax sale and you take ownership. Some states have rights of redemption for the previous owner other states the sale is final on that day.
Then you have Tax Certiicates.. These are sold frequently and you buy the certificate 99% of the time one of two things will happen.. 1. you will get paid back the money you spent on the certificate plus some interest income ( varies from county to county) or no one will redeem the cert. and once you investigate the property you will find the property was worthless and youi just wasted your money… OR the tax's continue to not be paid and you can then file a claim with the court to perfect title and end up owning the property.
The tax sale will wipe out every lien except IRS and property tax's.. Any other bank lien or mechanics type lien is extinguished with the tax sale. This is why banks have tax reporting services that monitor all properties that they have loans on. If tax's are not paid the lenders have the right to pay the tax' and then foreclose the mortgage even if the payments are being made.
Hope that helps there is more to this but this is the gist of it… Florida and Arizona are huge tax cert. states with a lot of activity. Remember though any property with a lot of value will attract the attention of many investors and the investors will bid down the rate of return. Many times down to 3 to 5% annual return.
There are companies that spend 100% of their time working tax sales.
I am in the process of buying in Atlanta. Any Suggestions. I have found some Aussie guys called inprop USA. They seem to be very legit and do not sell turnkey. Instead they let you buy direct off the MLS (apparently a place where all properties are listed) and then they arrange renovation and rental along with closing, bank accounts ect. They are licensed relators to so to me they seem good. Has anyone got anything negative to say about these guys. They told me that I should only be investing in the North or Atlanta and with average incomes of 55k+. They say that houses out South may appear like they have higher returns for cheaper but the actual returns will be lower due to tenant issues ect.
Jay do you know Atlanta and what do you think about the above advice. They charge $5,000 for the service and say they make between 2 and 3% from Real Estate commission as well.
Thanks,
Jacob.
Totally agree with you
Those tax cert auction have companies with huge backing to suck up those cert at low interest.
When you say tax sales are you talking about those auction selling tax deed sales like in florida tax authority? So in florida those deed sales extinguishes those liens other than irs and they would have clear title when a buyer buys them? Read somewhere that deed tax would not have clear title maybe is in some other states. Another thing is there is this final judgement value listed in some houses against the owner. Would buyer be responsible for those judgement value after buying them?
Does the tax deed sale erase all other liens on the property?
No! There may still be other encumbrances (judgments, priority mortgages, taxes or liens) that survive the sale. The winning bidder takes title to the property subject to all defects, liens, encumbrances and matters of which he/she has or could obtain knowledge. It is the bidders responsibility to perform all research regarding the property, including the value, title defects, liens, mortgages or other encumbrances. The Clerk's Office does not guarantee a clear title and is not responsible for any encumbrances on the property purchased at auction.
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