Well technically my business partner did, at a "free and clear" tax sale. I put up all the money cand he finds, fixes up the properties for an equity stake determined by ROI (total cost/rent income) So far we have 3 properties up and running and I've invested about 45k which is earning me 18%.

THIS situation however is gonna be a little hairy. It's gonna cost me about 12k-14k in deed recording fees and then an unknown amount in fixup costs (though we expect about 60k)

I only have about 16k left on my HELOC and am in the process og borrowing 50k against my TSP retirement account.

My wife was sooo happy when we got word of all the property we acquired but I know the tricky part is about to begin. It seems it's gonna be TIGHT for a while. We're gonna race to get the easiest to fixup properties running first to stop the bleeding of carrying costs.

I just wanted to post this very quickly. I know details are scant but if anyone is interested I'll keep updating the progress and/or take advice.

Please keep us updated. I'm a builder, landlord and real estate investor and know the feeling of being cash poor. It'll be worth it in the long run. Where are you located?

Pennsylvania

12k in deed recording fees is astronomical compared to typical deals in Texas, wow. Why so high?

I'll look into that and answer you tomorrow.

Ok I have an answer. The fees are based on the actual assessed value of the properties,not the price paid at auction, which is normally 1% to state 1% to county and are adjusted upwards yearly as time passes from the last assessment. This year it is 1.24%

Interesting, I'm looking at a HUD* from a cash sale here in Texas for a $310,000 single family house (tax assessment value is similar) and the deed recording fee is $24.00 and even the total closing costs** all inclusive are under $500 for the transaction.

However we have fairly brutal property taxes here which mitigate a lot of those savings.

This thread has great potential! I would be interested to know the inner workings of how you found out about this buying opportunity and how it was executed. Thanks and good luck!

I can't speak to Pennsylvania, but in my state there are real estate transfer taxes (stamps) that are in the range of cost described by the OP. Deed recording fees are additional and aren't very much at all.

The gov't always finds a way to **** us.

thread title confuses me:

"Bought 11 properties last Wednesday for 42k" - but now you say, you bought 3 and expect it to cost 60k total?


other than that - gl with your project!

Eagerly awaiting updates. GL, did your partner do all the due diligence on the properties prior to purchase?

Tax sales here in Arkansas if you are buying something for $1,000 at tax sale auctions, it's likely worth $1,000. Like an old mobile home on land that needs to be tore down and moved, which will cost about 5k. And then you can move another mobile home on the land and get a good return, (about 7-10k in costs).

So that 1k property cost you 20k, which is about what a lot of land and a mobile home costs without all the work.

If it's a vacant piece of property it's usually just the shell in a terrible neighborhood, or an inaccessible piece of land in a rural area.

How are you guys finding these properties?

No, we currently have 3. We bought 2 in April 2009 and 1 last year.

Each year the Tax Claim Bureau publishes a list of properties going to auction. You then just drive around the county evaluating them. It's really a lot of work and thankfully my business partner has the knowledge and sparetime to get this done in the limited time ypou have from publication to the actual auction.

Yes, there are a ton of bad properties here too,but happily this year there was a HUGE amount of good properties. We heard the tax bureau got a new director who cleaned out backlogged properties that should have been listed in prior years.

This flooded market with no appreciable increase in buyers or cash allowed us to clean house.