Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 3:20 AM
Paging: NE (PA) (by Mike SWMO [MO]) Apr 13, 2018 3:35 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 3:52 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 3:53 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 3:54 AM
Paging: NE (PA) (by Smokowna [MD]) Apr 13, 2018 3:56 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 4:01 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 4:06 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 4:08 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 4:08 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 4:11 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 4:22 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 4:25 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 4:29 AM
Paging: NE (PA) (by Ken [NY]) Apr 13, 2018 4:50 AM
Paging: NE (PA) (by Ken [NY]) Apr 13, 2018 4:56 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 5:07 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 5:11 AM
Paging: NE (PA) (by Ken [NY]) Apr 13, 2018 5:16 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 5:22 AM
Paging: NE (PA) (by moby [IN]) Apr 13, 2018 5:23 AM
Paging: NE (PA) (by NE [PA]) Apr 13, 2018 5:34 AM
Paging: NE (PA) (by LindaJ [NY]) Apr 13, 2018 5:58 AM
Paging: NE (PA) (by GKARL [PA]) Apr 13, 2018 10:39 AM
Paging: NE (PA) (by Roy [AL]) Apr 13, 2018 10:50 AM
Paging: NE (PA) (by GKARL [PA]) Apr 13, 2018 12:09 PM
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 3:20 AM Message:
NE,
In your deadbeat investing post,..you made this statement,.."My tax deed house for example has a deadbeat in there who I know will need constant management. If she leaves, I will be seeking another manageable deadbeat for this unit"
I don't understand your rationale here. Why would anyone intentionally put a deadbeat in ANY house? Why not fix the house up and get a better tenant pool?
My definition of deadbeat is any tenant who is supposed to pay rent but does not. Why would you want to waste your time managing this type of worthless tenant?
--68.63.xxx.xx |
Paging: NE (PA) (by Mike SWMO [MO]) Posted on: Apr 13, 2018 3:35 AM Message:
Roy (AL)
I may be wrong but I thought NE(PA) said s/he had purchased the certificate of Purchase at tax sale so does not "own" the house at this time. NE is not sure if s/he will get complete ownership so just renting and getting what money can be gotten at this time.
I may be wrong but that is my take on the situation.
Tried to look up NE's post mto confirm but couldn't find the post. --71.29.x.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 3:52 AM Message:
The backstory on the tax deed house is that it has a mortgage still in place that I didn't find during my searches.
I will be putting a low end tenant in this unit because I am not putting any money into the property incase the bank forecloses. The reason I want a deadbeat/low end tenant is because it's going to be a junky unit.
Most of my units are in pretty decent shape as I also don't want deadbeat types. This building in particular NEEDS deadbeat types. --50.32.xxx.xxx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 3:53 AM Message:
Mike, I own it via Tax deed. No looking back now. --50.32.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 3:54 AM Message:
Mike SWMO,
If what you say is true,...NE is setting himself up for some serious liability issues with these deadbeat broken down 'house sitters'. No insurance company will write a policy for these junky houses especially when you don't even have a legitimate title to the house. In AL, these type of houses are preferred by people who cook their own Meth. The cops raid these houses all day long.
Again, why would any investor want to deal with this situation?
--68.63.xxx.xx |
Paging: NE (PA) (by Smokowna [MD]) Posted on: Apr 13, 2018 3:56 AM Message:
How did you miss the mortgage? Did you not look yourself or was it somehow well hidden?
Thanks for help here. --108.48.xx.xxx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 4:01 AM Message:
Roy, I have an insurance policy on the property and got the inherited tenant over to my lease. I've insured much worse.
How did I miss the mortgage? There was an upgrade to our 911 system here several years ago and all the addresses changed. The mortgage was recorded with the old address and when we looked up all the properties, did not see the new address listed on any of the mortgages. So it was a technicality, but also a priceless learning experience. --50.32.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 4:06 AM Message:
Smoke,
4 years ago I tried to buy a house that my RE attorney found a $16,000 'hidden mortgage' that was over 10 years old! My attorney's advice: Don't walk away from this deal,..run as fast you can now!" --68.63.xxx.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 4:08 AM Message:
Roy, no worries here like I originally had and am not against looking for more of these properties in the future. I set up a 3rd LLC to hold title for this after I found the mortgage, so I can keep it quarantined from my flock! :)
Honestly, I'm not worried if the cops kick in the door either.
Why would an investor want to deal with this type of tenant? I'm guessing cashflow. The deadbeats I've seen locally pay HIGH rents on garbage properties. I'm assuming it's because no one else will rent to them.
Again, not my target tenant. If I can make a junk house work like this again in the future, I absolutely will. I only have $4,300 in it and the tenant is paying $500 a month and I'm not fixing anything. --50.32.xxx.xxx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 4:08 AM Message:
Maybe your attorney gave you bad advice. --50.32.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 4:11 AM Message:
NE,
Your insurance company is probably Foremost,..they will insure anything if the price is right. Am I correct?
--68.63.xxx.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 4:22 AM Message:
State Farm. I have used foremost when needed and that is fine with me.
I'm hoping Ken-NY stops by this thread. He knows his stuff on this type of thing.
The three units that I bought last year for $3500 plus back taxes, had a 12-year-old open mortgage on it. For $76,000. That would've killed the deal.
My local closing attorney was worried about it so I called the really really good out of the area attorney that I use only in times like this and asked him how long a bank can come back on and open mortgage in the state of Pennsylvania. That attorney said that the bank has 40 years to come back on a mortgage to foreclose. That's in Pennsylvania. When I was talking to the seller of the three unit, she said "well that mortgage was paid off in August in 2006!"
I said OK, let's go down to the bank and talk to them. So we went down to the bank and they went through their old files and all they could find was a digital copy of a check made out to the mortgage company in the amount of the mortgage pay off in the memo line said mortgage payoff balance or something like that and the back of the check was endorsed. That is all I had. So in a split second decision I closed on the house and I am pursuing the satisfaction piece currently and should have that resolved shortly. If I didn't get that satisfaction piece from the bank that is out of business at this time, I would've at least had the canceled check for when I brought suit to quiet the title.
So the other twist for that three unit story is that the bank that has the mortgage is no longer even in business. This property is worth the fight though. --50.32.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 4:25 AM Message:
NE,
I am NOT trying to criticise you or even give you a hard time here,...I know people locally who buy junky houses at tax sales and then turn around and put a For Sale sign in the front yard on the same day! When they can't re-sell the house for a quick $5K,...they usually just rent it out to whomever has a $500.00 cash deposit.
Yes, serious money can be made doing this,...it is just not my way of doing things. --68.63.xxx.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 4:29 AM Message:
It's not my preferred method either. I'm also not against expanding into that niche. --50.32.xxx.xxx |
Paging: NE (PA) (by Ken [NY]) Posted on: Apr 13, 2018 4:50 AM Message:
Roy,I buy houses like this all the time,the taxing authority sold the house and NE bought it,he has a deed so he has the right to collect rent,there is a mortgage against the property in somebody elses name so the bank can foreclose but it wont attach to NE credit in any way.Lots of things can happen,the most likely is the bank will foreclose but if NE collects $10000-$15000 in rent I would consider it a win for NE.The bank may release the mortgage and leave the note intact,I have had that happen and sold the property and made $45000.The bank may take 3 years to start foreclosure,I have had that happen and collected $30000 in rent before they even started foreclosure with an expected $10000-$15000 to come before the foreclosure actually happens.The guy on the mortgage could file a bankruptcy and then the bank couldn't start the foreclosure for awhile.Regardless what happens NE will keep collecting rent till he no longer owns the property and he wont be paying a mortgage or taxes so it all cash in his pocket.If the building burns down he will put the proceeds in his pocket and not even pay the bank as long as he didn't put the bank on his insurance policy.Roy,there are lots of ways to make money in real estate beyond simply buy a house and collect rent and pay the mortgage and taxes and keep a small difference.I buy houses all the time where there is outstanding leins and judgments and wait for them to drop off after 10 years in my state.I ask my attorneys advice on certain matters but I make the final decision,just because your attorney says not to do something doesn't mean you shouldn't do it. --72.231.xxx.xxx |
Paging: NE (PA) (by Ken [NY]) Posted on: Apr 13, 2018 4:56 AM Message:
NE,I don't have a preferred method,i evaluate every deal that comes in front of me and decide what will work best for the situation. --72.231.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 5:07 AM Message:
Ken (NY)
I agree with you in principal. However, do you see ANY serious risk or liability associated with what NE is doing here? What is the worse thing that could happen to NE here?
Personally, I would not want the never-ending HASSLE of chasing a worthless deadbeat tenant every month in trying to collect rent from. If I was 20 years younger, maybe so, but at my age I do not have the patience it takes to chase some worthless SOB for rent every month. There are much easier and less stressful ways to make a good living in this business without dealing with deadbeats.
--68.63.xxx.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 5:11 AM Message:
Roy, I have well screened worthless SOB's also.
Ken, yes I understand that. You have to get the house to fit in however it can. --50.32.xxx.xxx |
Paging: NE (PA) (by Ken [NY]) Posted on: Apr 13, 2018 5:16 AM Message:
Roy,there is no more liability doing this than what we will call a normal rental.NE has insurance policy like any other rental,in my case there is no never ending hassle of chasing a tenant,they pay the rent or I simply give them an eviction notice and go to court,that is no big deal to me.The worst thing that could happen would be the bank forecloses the property before NE collects enough rent to get back to even or to make enough of a profit to have been worth it.Roy,what risk or liability do you see beyond a normal rental situation? --72.231.xxx.xxx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 5:22 AM Message:
NE,
What is your deadbeat rent here? And how much have you collected so far? How do you 'well screen' a worthless deadbeat?
We are going to have to continue this discussion at the Mr. LL convention. I am looking forward to it. Bring a photo of the house and the application your dead beat filled out. I want to see this. --68.63.xxx.xx |
Paging: NE (PA) (by moby [IN]) Posted on: Apr 13, 2018 5:23 AM Message:
Sounds like NE is making lemonade out of lemons. --68.60.xxx.xx |
Paging: NE (PA) (by NE [PA]) Posted on: Apr 13, 2018 5:34 AM Message:
The tenant is inherited. She is paying $500. No application. For a house/deadbeat deal like this, I probably wouldn't screen much more than paystubs and criminal. Credit is guaranteed shot, most likely civil court history. (That's why I posted the deadbeat Investing post. It doesn't fit in the normal parameters of what most of us here do.). All the ones reject have to go somewhere.
One thing you have to keep in mind is that I don't care what happens to the house.
I have found that she does have an eviction already and several judgements. I'm sure I'll evict her.
Certainly would be different screening criteria than my other units. Separate LLC's, separate criteria.
The old property owner told me the rent was $600. I originally sent her a bill for $700, knowing she would lie about it being $600 anyways, so I could hopefully get her to settle for the $600. She told me it was $500. Ya, ok.
I got her on my MTM lease and honored her claim of $500 and consider that a fair trade. I'd rather have her at $500 on my MTM lease than $600 and no lease and a more difficult time evicting her if needed.
Also no deposit on record and I told her I would honor any deposit she has if she can produce the old lease signed by the old owner. She won't, because most likely it will reflect a $600 rent, if there is even a lease at all. --50.32.xxx.xxx |
Paging: NE (PA) (by LindaJ [NY]) Posted on: Apr 13, 2018 5:58 AM Message:
I understand NE's issues. I just sold a mid 1800s farmhouse that was a 2 unit rental. It was the a very beat up house, heated with wood stoves, and a real mess. 20 years ago I gave it another 5 - 10 years of standing.
But the tenants I had paid the rent at one point or another. I pretty much knew it would cost a fortune to fix it up, and without doing that it would be difficult to rent. I let the tenants do what they wanted for a price I was pretty sure I could not get again. Yes, they paid weekly, they got behind, they got ahead. But the expenses were so minimal and the money was as good as my better houses because these people would have difficulty going somewhere else.
I sold the land not the house. The house was torn down, and a development is being built. That was where I thought the money was really going to be made and planned on that. In the end, one tenant beat me out of $1500 in rent (and that was due to the judge allowing it) But I more than made that up in a all the rents I collected, so I am still WAY ahead in the game. Certainly, I am glad I am done with that, and I don't want to do it again.
As I always say, we have to find what works in our area, with our properties, our tenant pool, our market. Yes, it takes more work on our part to manage these tenants, but we get paid for that. --96.236.xx.xx |
Paging: NE (PA) (by GKARL [PA]) Posted on: Apr 13, 2018 10:39 AM Message:
This is a fascinating discussion as is the other thread. Some folks might call this slumlording, but a niche is being filled just as I do with a rooming house. The evicted and downthroddened have to live somewhere and they'll often do so with little complaint. --172.58.xxx.xx |
Paging: NE (PA) (by Roy [AL]) Posted on: Apr 13, 2018 10:50 AM Message:
GKARL said, "The evicted and downthroddened have to live somewhere and they'll often do so with little complaint."
Just in my opinion,..there are only 3 places where deadbeats should be allowed to live.
1. Family/Friends
2. Government Housing Projects
3. County Jail
NE- I wish you the best of luck with this house. I hope you make some money off of it. --68.63.xxx.xx |
Paging: NE (PA) (by GKARL [PA]) Posted on: Apr 13, 2018 12:09 PM Message:
Roy, I understand the sentiment, particularly after having been burned on more than one occasion. However as a practical matter these folks often run out of places to live and they can't couch surf forever. To be honest, I don't even take them in my rooming house, so that's one less available avenue for them. I see what NE and others are doing as filling a niche. Is it one that I'd want to deal with? Perhaps not as I'm not setup for the level of babysitting that's required but if one has a system to deal with that, money can be made. I guess it gets down to how one chooses to make it. --64.121.xxx.xxx |
Reply:
|
|