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I will get a post up shortly with the Baltimore City tax sale results. If you would like to share your experiences in the tax sale click the title heading and leave a comment. Several of you have left comments already - thank you. I will respond when I get a chance, still lots of work to do this week.
Ned
→ 2 CommentsTags: tax liens
This blog is focused on real estate investing. I have written a lot about tax liens and the tax sale process from an investor’s point of view, however I have gotten several questions from homeowners and tenants that are wondering what they should do. So here is the tax sale process from a homeowner and tenant’s point of view.
If your property goes to tax auction, don’t panic. Depending on your state they may auction off a tax lien or a tax deed. In either case, there are usually options to save your house.
In tax lien states you still own the property. The auction is only for a lien against your property. The winner of the auction receives a tax sale certificate, which basically makes them the tax collector. They take over the position of the city or county and get to collect the taxes and interest.
In the states that auction off tax deeds, the winner of the property actually gets a deed to your property. You are no longer the owner. However most states that sell tax deeds offer a right of redemption, so that you can get your property back by paying the back taxes, penalties and interest. This is most often for six months but in some cases a year.
While you do not need to panic, if you delay in taking care of the taxes, interest and fees can add up to substantially more than the original tax bill. Some states charge as high as 25%. Ultimately you could lose your home.
The rest of this post is about the rules in Maryland, but the basic concepts will apply in many areas. The interest rate is for Baltimore City and that varies by county in Maryland.
The tax certificate holder can take over your property but must file for foreclosure in order to do so. They cannot even start the foreclosure process until after at least six months. (unless your property is listed as vacant and needing substantial repairs by the city, then they can start after two months)
Contact the county tax sale office, or in Baltimore city go down to the Abel Wolman Municipal Building, 200 Holiday St., Baltimore, Maryland 21202. Ask for the tax sale office. It’s on the first floor. The office is open from 8:30am - 4:30pm. They will give you a payoff amount and it will have to be paid in cash or certified funds.
Anyone who has an interest in the property may redeem the tax lien. So often a bank will pay off the taxes to protect their interest. However in this case you will then owe the bank the taxes.
Water bills are part of the taxes that are owed the city or county. Baltimore City offers two programs to help, the Low Income Water Assistance Program and Senior Citizen Water Discount Program. I have been told that the city will work with people who are struggling to pay their property taxes however I have not found contact information yet.
You still own the property. You still get to live there and do anything you would do with a property you own. You can choose to sell or rent it. If you choose to sell, the taxes will be paid out of the money you get for the property. You have the right to redeem (pay the taxes) the property right up to the day the judge orders the foreclosure final.
Foreclosure is a long process, typically at least 4-6 months but it can take years. Everyone who has an interest in the property, owners, heirs (in the case of a deceased owner), banks, etc., will be notified by certified mail and the sheriff will post a notice on your door. Avoiding the certified mail may not stop the foreclosure, but it will keep you in the dark about what is happening.
You cannot lose your home without a foreclosure. You should get a notice mailed to you 60 days before a foreclosure is filed. Paying now will save you the cost of the foreclosure. Once a foreclosure starts the legal fees will add up quickly.
You have the right to redeem (pay the taxes) up until the day a judge rules that the property now belongs to the tax certificate holder. Tax sale foreclosures do not end on a specific day. The case file sits on a judges desk in a pile. You don’t know when it will reach the top of his pile and become final. Sixty days after you get notice the case file can be sent to the judge and at any time you could lose your home so it is important to act when you get notice.
Upon request the tax lien holder must give you a redemption statement and cannot stop you from redeeming. If the tax certificate holder does not allow you to redeem you can go to the court and ask the court to set the amount of redemption. The legal fees are capped at $750, after 4 months but before the foreclosure is filed. After the foreclosure is filed the fees are capped at $1300 but other expenses can add up to over $2000. You should get an itemized statement listing all the fees separately.
The time line goes like this:
* In Baltimore City, the foreclosure on properties that are listed as vacant and in need of substantial repairs can start after 2 months
Most properties that are in the newspaper listing for the tax sale are paid off before the sale. Even if the property goes into the sale, you still have the right to stay there. Your lease is still valid until a foreclosure is final and that could be year or more later. However IF there is a foreclosure and it is final, the new owner does not have to honor your lease. You will be notified of the tax foreclosure, at least by a sheriff posting on the door. From the time of this notice it will likely be at least 4-6 months before the home is lost.
To protect your interest you can pay the taxes. I would go down to rent court and see if legal aid could help you in this situation. I suspect that you could have the court hold your rent in rent escrow until the landlord paid or let you pay the taxes apply it to the rent.
If the worst comes to pass and the tax sale foreclosure becomes final, the tax certificate holder has to pay you for the house based on his or her bid at the auction. This money will first go to pay any mortgages or other debt attached to the property and you will get any money left over. It might be a small consolation but you may actually get a payout for selling your home.
Disclaimer: I am not an attorney and the above is not intended as legal advice. The above is simply my laypersons understanding of Maryland law. Tax sale laws vary by state. The above may be totally inappropriate for states that sell tax deeds.
Good luck,
Ned
→ 5 CommentsTags: real estate · tax liens
Last night Baltimore’s Mayor Dixon hosted a town hall style meeting about vacant and abandoned house problem. Mayor Dixon, Housing Commissioner Paul Graziano, Deputy Commissioner Code Enforcement Michael Braverman and panel of city officials spoke about how the city is handling the vacant properties they own.
Listening to the panel I was impressed that the city has taken steps to correct some of the problems with acquiring city owned properties. Yet it seems they still don’t understand some of the problems. They spoke of three programs.
The rolling bid program is a little known program which you can find along with Scope properties and RFPs on the Baltimore Housing website. The last thing you could call the SCOPE program is efficient. Few investors bother because of the hoops you must jump through.
I am sorry I didn’t catch one of the panelist’s name but he said he has been very good at getting deals approved by the Board of Estimates. The city’s goal is to get these properties in the hands of someone who can get the job done. That is more important to them than getting top dollar. If you put in a proposal make sure you emphasis how qualified you are, particularly financially.
In addition to these existing programs they spoke about the Land Bank Authority they want to create. This has been approved on the state level and is now waiting for City Council approval. This will give the city more flexibility in acquiring & disposing of properties.
After the official presentation many attendees got up to make comments or ask questions. The small investor was well represented, as approximately 25 members of the Mid Atlantic Real Estate Investors Association (MAREIA) showed up. Government affairs Committee Chairman Babara Klaput, President Alan Chantker, and myself all gave our feedback to the panel.
The City has done a good job of acquiring vacant properties. They own approximately 10,000 of the estimated 17,000 vacant properties in the city. However they have done a very poor job of getting them in the hands of capable renovators. This meeting makes me believe that will change, but that change will be slow in coming.
Happy rehabbing,
Ned
→ 2 CommentsTags: Advanced tips · real estate
The Baltimore County tax sale will be held Wednesday June 3, 2009, at the County Council Chambers, 400 Washington Ave, Room 205, Towson, Maryland at 9 a.m. You must pre-register for the sale by May 29 at 4:30 p.m. Registration is free. More information and the property list are available a the Baltimore County website. There are about 3400 properties listed to go into the sale.
The Howard County tax sale will be held Wednesday May 13, 2009 at the Ten Oaks Ballroom, 5000 Signal Bell Lane, Clarksville, MD 21029. The sale will start at 10:00 am and the doors will open at 9 am. You can get a list of properties and more information at the Howard County website. There are currently about 1,000 properties listed for the sale.
In order to bid you must pre-register before May 8th. You can register at 8930 Stanford Blvd., Columbia, MD 21045. You must provide a $1,000 deposit in cash or certified funds to register.
Good luck and don’t bid to high.
Ned
→ Add a Comment HereTags: Advanced tips · real estate · tax liens
Something my friend Pete Gardini often says is to take massive action. You are not going to be successful by sitting around doing nothing. Goals are great, thinking and planing are important, research is necessary, and going to seminars and reading real estate books ( and my blog 
) are all valuable. However real success is about taking action. At some point you have to get out there and do something.
As a tax lien investor, this is a busy time for me getting ready for the Baltimore City tax sale. It is important, especially in Baltimore, to check out the properties before you bid on them. There are lots of decrepit buildings and vacant lots in the city. You need to know what you are bidding on. (see this post about a bidder who paid big $ for an empty lot. )
Today I inspected 70 properties. I had stopped at 67 and counted them up and figured that was enough for the day. I was beat. But I couldn’t resist checking a few more as I drove out of town and wound up with 70 total. That is my idea of massive action. What is yours?
A lot of readers come here to learn about tax lien investing. But that may not be the right strategy for you. Figure the right strategy for you and then take massive action. No you don’t have to inspect 70 properties in a day to be successful in real estate, but you do need to take action consistently.
You need to be marketing, talking to buyers and sellers. You need to be inspecting properties, and making offers. This business doesn’t just happen - you make it happen. If you make the effort you will be rewarded. If you keep doing what successful people do long enough and consistently enough, you too will be successful.
Steph is a regular on several online forums. I met her in person for the first time at a Steve Cook Seminar. Steph is one determined lady. If you want to see what it means to take action and what real persistence means I recommend you check out her blog Flip this Wholesaler. Read her blog and you’ll get a great idea about what I mean by taking action. Sometimes she wears her heart on her sleeve and you will see all the ups and downs of being an investor. But most importantly you will see what it takes to be successful.
Happy reading
Ned
→ 2 CommentsTags: Beginner · real estate · tax liens
Another new real estate investing club is coming to the Washington DC area.
The first meeting will be held this coming Thursday April 23 2009 from 7-10:00 pm
The location will be: the Hampton Inn, 5821 Richmond Highway, Alexandria, VA 22303
The Real Deal of VA will meet monthly every 3rd Thursday of the month.
Don’t forget about the Read Deal in MD. Their next meeting is Tuesday the 21st of April 6-9pm at The Meeting House ~ 5885 Robert Oliver Pl. ~ Columbia, MD 21045
I have really enjoyed the two meetings I went to in Columbia and expect the Virginia club to be just as good. One of the best ways to learn and succeed in investing is to go to your local real estate investing club. If you are near either of these two clubs you should check them out.
→ Add a Comment HereTags: real estate
I am fortunate to be a member of a high level mastermind group. I am continually impressed with the ideas, knowledge, and success level the members of my mastermind group generate. Two members of my group are putting on an exciting event later this month, The Exponential Wealth Conference. The conference will be Two days Friday April 24, & Sunday 26, 2009 with multiple speakers, and jam packed with info. Click here to see the complete schedule
I am not just telling you about this because it is put on by my friends but also because I know this will be a great event. I know my friend Pete Gauthier is both an excellent negotiator and great teacher of negotiating because I have heard him speak first hand. Pete Gauthier sat across from Warren Buffett at the negotiating table during his stint as as a lead negotiator for the Pilots Union.
All the other speakers; Dan Sprietzer - Business coach extraordinaire, Edwin Kelly - Investing in real estate with your IRA, Tom Zeeb - Automating your business are top notch. I have never heard the featured speaker Richard Flint, but my friend Dan assures me I will be impressed.
Business Foundations, Where Every GREAT Business Starts
I am a big fan of education. There is no better place to invest your money than in yourself. When Dan told me about this event I really wasn’t excited about spending another $2-3,000 for a multi-day event. I love these things and they have really helped me succeed to a high level but hey right now it’s just not in the budget. Then he tells me “It’s only $199.00!” Whoa, Big Change, it’s now only $49 ! ! !
Some of the Topics Covered Will be
The Exponential Wealth Conference: How to Make it, How to Grow it, How to Keep it!
→ 2 CommentsTags: Advanced tips · Beginner · business · real estate
Watch how calmly this guy negotiates a 1.5 million dollar home. Boy is he smooth.
Keep laughing,
Ned
→ 7 CommentsTags: Humor
Do you have an Apple iPod? How do you use it? I try to take a walk every day. It is modest exercise and it relaxes me. I also get some of my best ideas while walking. To help generate those ideas I listen to my iPod. I listen to motivation, sales, real estate and marketing recordings.
Many of us have a shelf full of programs from all kinds of real estate Gurus. Why not load them onto your iPod and actually listen instead of leaving them on your shelf. I have also recorded my goals so that I can listen to them daily. You can take this a step further and record a list of your strengths and successes. Motivational speakers regularly talk of our “Self Talk” and how it can help or hinder us depending on whether it is positive or negative. Record a positive self talk tape and listen daily. This guarantees you a daily dose of positive messages.
I Use a Nike+ for my iPod. This is a really cool tool. It has a little transmitter that goes in your shoe and it sends a signal to a receiver attached to your iPod. It keeps track of how far and how fast you run. When you sync your iPod it uploads your info to a Nike website which tracks your mileage. You can set goals and track by day, week, or month.
While I am out walking, the Nike+ is keeping track of how far, while the iPod give me something positive and motivating to listen to.
Well I had to replace my sensor as the battery had run out. I hooked it all up and it wouldn’t sync properly with the website. I checked the online FAQ - useless. So I sent a message to customer service. Most big companies like Nike have bad customer service. They want to rely on their horrible online instructions and FAQs. Much to my surprise I quickly I got a reply back with an answer that actually worked. It was a personalized message from someone who actually understood the question! I was very impressed and I think Nike deserves Kudos for providing such good service.
If you want to get an iPod or the Nike plus I’ve made it easy for you. Just click the links below. The Nike+ does not work with all iPods. So if you already have an iPod make sure you have the right one before you spend the money for the Nike+ kit. You need to get a Nano (1G, 2G, 3G or 4G) or an iPod Touch 1 G or 2G. To make it easy for you these links will send you to the right page.
Apple iPod nano 8 GB (4th Generation)
Apple iPod touch 8 GB (2nd Generation)
Apple Nike + iPod Sport Kit for iPod
→ 4 CommentsTags: Advanced tips · Beginner · Success & Wealth Building · business · real estate
This book by Dave Lindahl is about repositioning Apartment buildings. This is truly one of the better books on real estate investing that I have read. While its primary focus in multi-family buildings, it has tremendous value for single family home investors also. Dave Lindahl got his start renovating single family properties and doing small 3 unit multi-family properties.
For those unfamiliar with the commercial property business a repositioning would be the equivalent of rehabbing a single family home. Rehabbing a single family home is usually done on a vacant property. When the property is complete it is sold to a homeowner or landlord. Repositioning is generally a more complex process. It can often be done with tenants in place. Usually some renovation is required but it is more than just renovation It is often also about upgrading the tenants, management and the Position of the property in the marketplace. (By the way one of the best books on Marketing is called Positioning: The Battle for Your Mind
This book is full of tips. My copy is full of yellow highlighted pages. Many of these tips apply to rental properties of any size. One example would be his suggestion to offer tenants to paint an accent wall for an extra $20 a month. Or how about this tip
Replace faucets. Do not be cheap here! Inexpensive faucets are a maintenance headache, and end up costing you more overall. Get ones that are distinctive and elegant. Here’s my rule: If the tenant has to touch it regularly, make it special.
The book has advice on finding deals, working with contractors, smart renovation tips, financing your deals, negotiating and much more.
Dave invests in apartment buildings around the country. He started small. His first rental was a 3 unit building in a depressed area. He now has over 5,000 units, so he know what he is talking about.
Anyone who wants to invest in apartment buildings would find this to be a wonderful book. Yet there is value to single family home landlords, and rehabbers. As I said above this is one of the better books I have read on real estate investing. In addition to really solid information it is well written, easy to read and easy to understand. Just as importantly it is not full of irrelevant fluff like so many investing books. I recommend this book highly. You can buy it from Amazon at a great price here. Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits
Happy reading,
Ned
→ 6 CommentsTags: Advanced tips · Beginner · books · landlording · real estate
Are you wondering how to invest in this changing market? Have you seen your savings and investments decline? Are you paralyzed and unsure what to do with your investments even as you see them wither away to nothing? Crab Properties, LLC has arranged a free online webinar to answer these concerns.
Arkad Group, LLC will present why Commercial real estate, specifically apartment buildings, is the best investment for this market.
I know what you are thinking “I don’t have the kind of money it takes to buy an apartment building.” This is why the second part of the online webinar is about using your IRA. This little know technique allows you to use your IRA to invest in high return investments like commercial real estate.
Did you know you can invest in real estate with your IRA? After their home, retirement accounts represent the largest investment for most Americans. This is an untapped source of funds to invest in real estate that most never even realized was possible.
Satchie Carvounis, a representative for Security Trust Company, will give a presentation on how to super charge your retirement accounts by investing in creative strategies like real estate.
Don’t settle for stock market losses or measly 2% returns bank CDs or treasury bills. Sign up now.
Details
When - Wednesday March 25
Time - 8:00-9:00 pm eastern savings time
Where - Online, watch and listen in from home
Price - Zero, nada, nothing, just sign up.
Click Here to sign up
→ 1 CommentTags: Advanced tips · Success & Wealth Building · real estate
Do you want to learn how to invest in tax sales? Do you want to learn the best neighborhoods to invest in Baltimore City? Which neighborhoods are the good the bad and the ugly? Do you want personal mentoring and all you investing questions answered? If so contact us.
Crab Properties, LLC is looking for interns to help with the 2009 Baltimore City Tax Sale. If you would like to learn about the tax sale business from an experienced investor go to the Contact Us link above.
Candidates must have transportation and will be expected to travel to Baltimore to inspect properties for the upcoming tax sale. This often works best in pairs so don’t be shy about applying with a friend.
→ 3 CommentsTags: Advanced tips · Beginner · real estate · tax liens
I am a big fan of Warren Buffett. In fact I wrote about some of Warren Buffett’s quotes earlier. While reading another blog about investing, Invesmint.com, I saw the following video about Warren Buffet buying stocks.
A key quote from the video is:
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long term asset, one that pays virtually nothing and is certain to depreciate in value.
Yes if you are smart you have cash on the sidelines. However if you are really smart you have no intention of keeping it there. You should be shopping for value. Whether that value is in the stock market like Mr. Buffett or in real estate.
Another famous quote of Warren’s is also in the video:
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful
Many have cash on the sidelines because they are fearful. However this is the time to get aggressive with your finances. This is the time to “Be Greedy” and take advantage of the low prices. Of course “Being greedy” does not mean being stupid. You need to know how to find value, and how to assess it. If you don’t know how to do that you need to get an education and/or work with a professional you can trust.
As a reader of this blog, contact me and I’ll be glad to help and point you in the right direction. No one, not even Warren Buffett, can predict prices short run, but real estate is currently priced very well for long run. If you have money on the sidelines and want to get into real estate, send me a message via the contact us page and I’ll give you some ideas as to how to go about it.
Happy investing,
Ned
→ 7 CommentsTags: Success & Wealth Building · Uncategorized · business · landlording
The Real Deal Investment club will be meeting this Tuesday March 17
Date
Tuesday March 17
(Held every third Tuesday of the month)
Time
6:00 - 9:00 PM
Location
The Meeting House
5885 Robert Oliver Place
Columbia, MD 21045
Click here for Directions an Map
This is a new club I mentioned in this recent post about two new investment clubs. Tammy Phelps the organiser tells me she has a great speaker lined up. I really enjoyed their first meeting. It was a smaller more intimate club without all the rah rah sales pitches you often get at investment clubs. I hope to see you there.
→ Add a Comment HereTags: Beginner · real estate
Mark your calendars for Wednesday March 25. We will be having a webinar at 8:00 pm. Arkad Group, LLC will offer a presentation on investing in apartment buildings and a special guest will give a presentation on an unexpected source of funds to do that investing.
→ Add a Comment HereTags: Advanced tips · real estate
