GOV’T APPROVED: Tax Free Modifications and Short Sales

Mortgage Workouts Now Tax-Free

This will help homeowners whose mortgage debt was partly or entirely forgiven about a special tax relief provision. These homeowners may be eligible to exclude the amount forgiven from their taxable income. *********Read about who and what qualifies by downloading this brochure from the IRS.

Originally published in Blog on 7/8/2009

TGIF – NOT. Working on the upcoming Tax Deed Field Trip

Thanks to all of you that signed up for the upcoming Tax Deed Field Trip.

The 2 day trip has already got 16 people signed up…. I expected 10! Day 1 we talk about how to do the research, Day 2 we go to an Auction and then go through the courthouse records. It’s going to be a great event for those who attend. The last one we did was pretty good as well. That time we didn’t do a research day but listening to what you all tell me sounds like you need more help with the research. Anyway I just wanted to chat real quick, gotta go back to work.

As far as Day2 goes, I’ve split some people off into the 2nd auction which is Aug 26th. That day is filling up too! So I will be looking for another Auction to take the rest to. Any suggestions on any counties you all are interested in?

Originally published in Blog on 7/24/2009

Florida puts a CHERRY on the $8,000 First Time Home Buyer Tax Credit

New home buyers will not have to wait around for the $8,000 tax credit. Florida will give the new home owners the $8k upfront which they can then use towards the down payment. This is made possible thru the current administration’s Stimulus Package. The package allows first time home buyers to qualify for an $8k tax credit after the home is purchased. I believe it is only for those that have not owned a home in the last 3 years. In the most recent development, Florida will give the new buyer a short term loan of $8k now which payable when the IRS gives the homeowner the 8k federal tax credit. The state will obligate the new homeowner to repay the 8k in less than 2 years. Read more on it in the Orlando Sentinel.

Originally published in Blog on 7/15/2009

This is how rediculous buying property can be… but u gotta love this attorney’s answer!

(Kudos to Audrey for sending me this email. I’ve copied and pasted it here. Is the story True or False? You just don’t know with title companies these days. )

Louisiana Land Title

Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years.

With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership.

Here’s the story on one attorney on an issue with FHA (on behalf of a client):

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply):

“Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.”

Annoyed, the lawyer responded as follows:

(Actual response):

“Your letter regarding title in Case No..189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France, in 1803 the year of origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus’s expedition. Now the Pope, as I’m sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana .. God, therefore, would be the owner of origin and His origins date back, to before the beginning of time, the world as we know it and the FHA. I hope you find God’s original claim to be satisfactory.

Now, may we have our damn loan?”

The loan was approved.

Originally published in Blog on 7/15/2009

#3 Mistake Tax Deed & Tax Lien Investors Make

They Don’t Know How to Bid

Whether it is a Tax Lien or a Tax Deed auction, most municipalities require that you compete for the properties by bidding.  The problem many people have is their bids are too high. You know the story about David and Goliath.  Brains over Brawn (or cash in this case).  The way I bid is how I taught Christa to bid in her auctions.  The person willing to pay the most at the sale does not always win.  You have to learn how to step your game up.  Christa carefully timed her bids out based on the climate in the room and the fact that the clerk breezed through the sale only enhanced her chances.
Originally published in Blog on 7/10/2009

‘Real’ Words: How Well Do You Know the Real Estate Language?

How Well Do You Know the Real Estate Lingo?

I was reading somewhere that the Merriam-Webster’s dictionary is adding about 100 new words to the 2009 dictionary. Some of these words include: frenemy, waterboarding, staycation, and carbon footprint among other words. This got me to thinking, what are the real estate words every real estate investor should know or at least be aware of.

From time to time I will post a new ‘Real Word’ on this blog. It’s a great way to refresh our memories and for those of you new to the business, it’s a great way to learn new real estate words. Make your own comments on this word and any other words you think should be in our Real Estate Dictionary.

Bona Vacantia

That word means a property that belongs to no person, and which may be claimed by a finder. In some states, the government becomes owner of all bona vacantia property.

Don’t forget… Make your own comments on this word and any other words you think should be in our Real Estate Dictionary.
Originally published in Blog on 6/10/2009

School District Finds it’s Properties on the Tax Lien Certificate Sale

( I read this in the Fort Myers News-Press – a great paper and I know because I used to live in that area. Here is what the paper said:)

The Lee County school district also behind on its 2008 taxes, owing almost $40,000 on five properties it owns, according to the Lee County Tax Collector’s office. Investors have purchased tax certificates on all five properties. A tax certificate is a legal process that requires Lee schools to repay the tax, plus interest, within two years, or it could face a legal procedure resulting in a loss of those properties.

The Lee County School Board is a wholly tax-exempt government agency, meaning it pays no property taxes, called ad valorem taxes. However, the school district still is responsible for non-ad valorem taxes if independent taxing agencies, choose to levy taxes to all property owners regardless of their exemption status. Water Control says the school board is responsible for paying those non-ad valorem taxes, the school board says they are not.

Four of the delinquent properties are in Lehigh Acres. Three are vacant land; one is a school bus parking compound.
The fifth delinquent property is a vacant 13-acre site in Cape Coral.
Here is a list of those properties.

  • 2227 Trafalgar Parkway, Cape Coral: $34,368.32
  • 214 David Ave., Lehigh Acres: $2,060.39
  • No address, Lehigh Acres: $1,305.77
  • 301 Leonard Blvd., Lehigh Acres: $1,170.15
  • No address, Lehigh Acres: $524.20

Originally published in Blog on 7/10/2009

#2 Mistake Tax Deed / Tax Lien Investors Make

2.  They Don’t Do Their Homework

This is the other side of that ugly coin that has ‘Paralyses of Analysis’ on the opposite end.  I don’t know which is worse; In the long run you loose money with both.  As much as I ‘preach’ to investors to make sure you know what you are bidding on, I still come across people who jump in head first and bid on a piece of property without doing their homework.  One of them attended my class and this person was so excited about doing a deal that this investor neglected to do the proper tax deed due diligence and is now banned from bidding in 2 counties for not paying for the properties won at the auction.  When you don’t pay for your property after winning the bid most counties will bad you from bidding on future sales.  This investor was lucky and was only temporarily banned but this resulted in forfeiting $400 worth of auction deposits.  This is the same person who tried to buy tax deeds without the home study course.  I just haven’t had the heart to tell this investor, the home study course would have cost less than the $400 lost in auction deposits not to mention saved the investor the humiliation and anxiety those deals caused.
Originally published in Blog on 6/26/2009

#1 Mistake Tax Deed / Tax Lien Investors Make

1. Give Up Too Quickly.

I’ve already told you about Christa’s $10k house. What you don’t know was that this was not the first time she bid at the auction. About a month before this purchase, Christa lost bids on about 3 properties. She also had to overcome some obstacles involving the use of her self-directed IRA to buy at the courthouse. I worked with Christa over the phone for a couple of weeks after she bought my Tax Deed Home Study course so I knew exactly what she was experiencing and I advised her on what to do. She had spent the day with me in my all day training class on Tax Deeds. “I think what really helped me was the hands on work we did in the class. Being shown what to look for in the files gave me the confidence to do it on my own”, says Christa. She also used my forms to keep track of the information she needed to collect. And when the time was right… they say “Luck is when opportunity meets preparation.” So when the time was right, ‘she pulled the trigger.’

Stay tuned for More Mistakes Investors Make.

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Originally published in Blog on 6/24/2009