I’m 18 years old and my dad left me a house in Canton, Ohio that i’m trying to get rid of. I’d love to keep it and fix it up and rent it out or sell it but i have taxes due on it and it will be foreclosed upon soon. I owe about $1600 in taxes on it and no way to pay that. Okay I do, my grandpa, but I couldn’t ask him.
Can I sell it before I pay the taxes? With some sort of agreement possibly that they can take it out of the price? Do those websites claiming to buy houses actually do? I’ve filled out a few of those forms and haven’t heard much back, i’m sure they are looking for great great deals. ugh!
is the house paid for free and clear? Does it have a mortgage?
if the house is paid for free and clear, maybe you can refi and pull some cash out, not much, just a little. Then you would have a VERY small loan to pay back and you could rent it. With a small mortgage, you could probably afford to hire a property management company.
The other thing is, I do not think they will sell the house right away for unpaid taxes unless they are a couple years past due but dont quote me on that.
No mortgage, and yes I own it free and clear.
Getting a loan at 18 with no job or income is probably impossible. I was thinking about renting it out, but it needs a good deal of work done to it. Probably about 25k, but then again, I have NOTHING in it so far.
Best possible scenario, would it be a half okay idea to get a loan and fix it up and rent it out? They would be basically paying my loan…
do you know what the house would rent for? Do you know what its worth repaired ?
Depending on what the house is worth, you may find someone to lend on it if the LTV (loan to value) ratio is low enough. If the house is worth 100k, and you need 35k to pay taxes and repairs, you may find a lender, its worth looking.
and yes, investors and web sites advertising to buy houses are usually not going to give more than 70 % of its repaired value, then subtract the repairs needed.
You’re sitiing on a pretty good deal, my friend. If I was in Ohio this would be my offer to you:
How much do you want?
If your house is free and clear you can write a mortgage for a new investor or end-buyer. You get to be the bank in first position. Instead of selling for a lesser lump sum, you can get someone to pay full price if not more because you write the term and interest rate.
I would suggest you get to your local RE Investors Club or Association and find someone who does Subject To deals.
If you can share the specific numbers, I can tell you more, I make offers like yours a few times a week.
Although I like what you said, because it is pleasing news to my ears, I am confused on what you’re talking about!!!
Okay, specific numbers…First of all the home is not in a very good neighborhood which kills everything but then again the neighborhood is getting better. They just built a brand new district library and a day care center across the street. I guess their plan was to drop your kids off at the day care center and they can go to the library too! ;D
I wish I knew all the terms that are used to describe rehabs and the percentage values you guys use, I need to learn this stuff…
After renovations, considering the neighborhood and comps it could be sold from 58-68k retail, but that may be pushing it. After looking at rentals in the area I concluded with it fixed up it would be rented for about $600 a month. As of now I owe $1600 or so in back taxes. The house has a new exterior which my dad did, all new siding, windows and roof, and a new front porch. The interior needs plumbing, electrical and everythings pretty much gutted on the main floor. The upstairs is wired and drywalled. Plumbing and Electrical would cost a pretty penny, eh? My buddies dad is an Electrician so I might be able to score there, and I can definitely score cheap on a lot of the renovation process, things such as drywall, carpet and kitchen cabinets. My main concern is the plumbing and electrical and HVAC, although there is a new furnace in the basement.
I should really get a general contractor out to give me an estimate, eh?
Oh wait it just hit me what you are saying. You’re saying I can write a mortgage to someone to buy my house? No kidding?! What kind of contracts are involved in this and what else besides pen and paper? I really didn’t know ANYONE could write a mortgage, I thought it was only banks and whatnot. Thank you for opening up my eyes!!! :o
Anyway, where can I find out more info on writing someone a mortgage? How would I advertise this, catchy stuff, no money down?
are you needing someone to buy your home?
alexk1100, Have you sold yet?
What I was talking about was: Offer the house for sale through your local Real Estate investors Group. The deal would be 5% cash down, non refundable, monthly payments that are comfortable for you and the buyer, and a three to five year ballon payoff.
You’ll collect the money down to pay the taxes and keep some for youself. The buyer will pay the taxes after the he takes possesion and will have his own insurance. You just sit back and collect his monthly payments. If he defaults or if anything goes wrong you forclose on him, take the house back and do it all over again.
Establishing the value of the property is your next step. Consult a local realtor to get their evaluation of the fair market value “AS IS” and after it has been repaired. Keep in mind that anyone who buys your house as an investment needs to make a profit too. So don’t get greedy. if you want to make the big bucks you need to do all the work.
If you want to do all the work and try to make more money don’t go to a bank. Find another investor in your area who does rehab work and partner with him. You put up the house and he does the work and you both split the profits. He’ll have to pay the back taxes so it might not be a 50/50 split. Just remember don’t get greedy. If you do this right, you can do it again and again and again.
Try calling those We Buy Houses signs. According to this site, there are 7 investment groups in Ohio. See if you can find someone who specializes in “Subject To” deals. They will tend to pay more than a general rehabber.
Good luck and please keep us informed.
Thank you. If I got the taxes paid myself what about a local newspaper ad? Something like No Money Down Owner Financing Single Family Rehab number here? You’re probably likely to get someone who really doesn’t know a whole lot this way, eh?
If you get the back taxes paid you’ll be good as gold and it’ll give you some breathing room and buy you some time before your next round. That way you can at least educate yourself to some other possible options you’re not currently aware of you might have.
$1600 sure sounds like a small amount of money to lose a house to. You mentioned your Grandpa. Without really asking him if you could borrow some money, tell him your situation and maybe he’ll offer anyhow or at least suggest some alternative solutions possibly.
For example he could borrow you the money and put a lien on the house so that way when you do unload it he’ll be sure to get his money before the house closes.
If all else fails I know someone in Cincinnati area who is a major player and would be interested in your house and possibly give you some walking money in addition to paying your back taxes so you at least get something out of the deal versus losing it all together to the city and getting zilch.
Alexk1100, ads like that do work, investors do look for them. But if you are going to offer no money down, how will you pay your taxes? Try something like No Bank Qualifying, or Seller Finaced. Besides, ads cost money and you’ll have to deal with 100 tire kickers.
Seriously, save the money and time and check out these sites:
Thank you a lot. I’m really hoping to get the taxes paid so I can educate myself more and make the most out of this that I can. I feel really fortunate to have something to start out with, and hopefully this will allow me to become successful in the long run. Finishing up high school while trying to deal with this is a bit stressful. I can’t wait until I graduate this year and possibly invest full time.